Oil&gas Regs Regulatory News (OGDC)

27 Feb 2008 07:48

Oil and Gas Development Company Ltd27 February 2008 Islamabad 27 February 2008 HIGHLIGHTS "OGDCL ONLY" UNAUDITED FINANCIAL RESULTS FOR THE 1H FY2008 ENDED 31 DECEMBER, 2007-------------------------------------------------------------------------------- Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announcesits financial results for the Half Year ended 31 December, 2007. FinancialStatements have been prepared in accordance with International FinancialReporting Standards. Highlights of 1H FY2008 include: • OGDCL's net sales increased by 14.2% to Rs 56,568 million from Rs.49,526 million for the comparable period last year, • Net profit before tax increased by 9.7% to Rs 34,738 million from Rs.31,659 million for the comparable period last year • Net profit after tax stood at Rs 24,002 million resulting in earningsper share of Rs 5.58 as against Rs 23,113 million and earning per share of Rs5.37 respectively during the comparable period last year. • Operating profit margin and net profit margin for the period under reviewwas 59% and 42% respectively. • Payable second interim dividend of Rs 2.00 per share. • Net crude oil production of 44,085 barrels per day, net gas productionwas 943 MMcf per day, net LPG production 382 tons per day and net sulphurproduction was 68 tons per day. • Average net realized price for natural gas sold was Rs 137.50 / Mcf,compared to Rs 147.68 / Mcf during 1H FY2007. • Average net realized price of crude oil sold was US$ 60.97 / bbl asagainst US$ 55.19 / bbl during 1H FY2007. • The Company spudded 7 wells and made one discovery during 1H FY2008,Moolan -1, 1Q FY2007 1Q FY2008 1H FY2007 1H FY2008 % Pkr in Millions Pkr in Millions Pkr in Millions Pkr in Millions ChangeNet sales 25,296 27,769 49,526 56,568 14.2Profit before tax 17,461 17,195 31,659 34,738 9.7Profit after tax 12,328 12,337 23,113 24,002 3.8Earnings per share 2.87 2.87 5.37 5.58 3.8Net cash from operating 12,513 13,153 12,777 23,225 81.8activities OGDCL CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE 1H FY2008 ENDED 31 DECEMBER, 2007-------------------------------------------------------------------------------- Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announcesits financial results for the Half Year ended 31 December, 2007. FinancialStatements have been prepared in accordance with International FinancialReporting Standards. Highlights of the year include: • OGDCL's net sales increased by 14.4% to Rs 56,822 million from Rs.49,676 million for the comparable period last year, • Net profit before tax increased by 10.7% to Rs 34,888 million from Rs.31,510 million for the comparable period last year • Net profit after tax stood at Rs 24,093 million resulting in earningsper share of Rs 5.60 as against Rs 22,925 million and earnings per share of Rs5.33 respectively during the comparable period last year. • Operating profit margin and net profit margin for the period under reviewwas 59% and 42% respectively. • Payable second interim dividend of Rs 2.00 per share. • Net crude oil production of 44,085 barrels per day, net gas productionwas 963 MMcf per day, net LPG production 382 tons per day and net sulphurproduction was 68 tons per day. • Average net realized price for natural gas sold was Rs 136.15 / Mcf,compared to Rs 146.68 / Mcf during 1H FY2007. • Average net realized price of crude oil sold was US$ 60.97 / bbl asagainst US$ 55.19 / bbl during 1H FY2007. • The Company spudded 7 wells and made one discovery during 1H FY2008,Moolan -1, 1Q FY2007 1Q FY2008 1H FY2007 1H FY2008 % Pkr in Millions Pkr in Millions Pkr in Millions Pkr in Millions ChangeNet sales 25,322 27,927 49,676 56,822 14.4Profit before tax 17,214 17,286 31,510 34,887 10.7Profit after tax 12,037 12,399 22,925 24,093 5.1Earnings per share 2.80 2.88 5.33 5.6 5.1Net cash from operating 10,983 13,291 12,922 23,181 79.4activities Chairman's statement Commenting on OGDCL's 1H FY2008 results, the Chairman and CEO of OGDCL, Mr.Arshad Nasar, said: "I am excited to report on another very successful period for the Group. Theperiod under review was characterized by a substantial 14.4% growth in sales anda decent growth in oil and gas production. In line with our aggressiveexploration program to enhance reserves, the Group continue to incur highercosts related to exploration and prospecting activities, which were expected." "During the period under review, the Group saw an increase of 11% in oilproduction and 8% in gas production which compares favourably with the industryin general and is in line with market guidance of our double-digit productiongrowth target of 10-11% on CAGR basis." "In light of the prevailing industry cost pressures, the Group is continuouslyworking towards ensuring that our operating and general and administrativeexpenses are restricted to the optimal required levels for efficient operations." "I am happy to report that the progress we have made to date and that which wehave aligned ourselves to achieve bodes well for the future of the Group and forall our stakeholders. I am confident we will continue this pattern of growthtogether." "Last but not the least, I express my sincere appreciation to the management andemployees of the Group who have individually and collectively, through excellentteamwork, contributed towards the results achieved during the first half ofcurrent financial year and look forward for their continued dedication and hardwork for further success of the Group." - Ends - For further information:Investor Relations ContactUsman Bajwa Investor Relations OfficerTelephone: +92 51 920 9888Fax: +92 51 920 9858Email: usman_bajwa@ogdcl.com Notes to Editors OGDCL is the largest petroleum exploration and production (E&P) Group in thePakistan oil and gas sector, with a primary focus on gas. It holds the largestportfolio of the recoverable hydrocarbon reserves of Pakistan, at 34% of gas and45% of oil, respectively, as at 30th June 2007. It contributed 25% of thecountry's total natural gas production and 61.5% of its oil production inDecember 2007 on net basis. With a portfolio of 44 exploration licences, the Group has the largestexploration acreage in Pakistan, covering 33.5% of the total awarded acreage asof December 2007. While its focus to date has been on onshore exploration, theGroup has also recently begun conducting offshore exploration activities; anarea which has significant untapped potential. OGDCL had a net profit after tax of Rs 45.25 billion for the year ended June30th, 2007 and Rs 24 billion for the six months ended December 31, 2007. Summary Results The first half of 2007-08 has been a period of sustained progress for theCompany. Its crude oil, gas and LPG production witnessed 11%, 8% and 4% growthover first half of 2006-07 and with continuing high realized prices of crude oiland LPG, the Company registered significant increase in its revenue andprofitability which grew by14% and 4% respectively. Our exploration anddevelopment program continued during the period and to date in 2007-08 yieldedtwo gas / condensate discoveries at Moolan-1 and Pasakhi East-1 in Hyderabaddistrict of Sindh province. Moolan-1 was discovered in November 2007 and PasakhiEast-1 in January 2008. OGDCL also enhanced its exploration portfolio throughacquisition of two exploration licenses namely Eastern Offshore Indus-A andShaan covering an area of 4,989.8 Kms. We also feel immense pleasure in disclosing that our compliance to the bestpractices of corporate governance has enabled our Company to be placed amongstthe "Top Twenty Five (25) Companies" on the Karachi Stock Exchange (KSE) for thethird consecutive year. KSE announced the names of Top 25 companies for year2006 on January 22, 2008 and OGDCL has been ranked as 4th in the list of Top 25companies. OGDCL continued to deliver strong operating performance and completed the firsthalf in a healthy position, with improved figures of revenue and profitability.Higher sales volume of crude oil, gas and LPG combined with high realized pricesof crude oil, LPG and Sulphur resulted into 14% increase in sales revenue to Rs56.568 billion compared to Rs 49.526 billion during corresponding period lastyear. Higher sales volume and realized prices contributed Rs 4.735 billion andRs 2.304 billion respectively towards increased sales revenue. During theperiod, net realized prices of crude oil and gas averaged at US$ 60.97 / BBL andRs 137.50 / Mcf respectively compared to US$ 55.19 / BBL and Rs 147.68 / Mcfduring corresponding period last year. Financial Results Profit before taxation for the period was Rs 34.738 billion compared to Rs31.660 billion during first half of 2006-07 depicting 9.7% improvement andcontinuing the upward trend in the Company's earnings performance. Profit aftertax was Rs 24.002 billion compared to Rs 23.113 billion during first half of2006-07. First half earnings per share rose to Rs 5.58 compared to Rs 5.37 pershare during first half of last year. During first half of the year, net cash from operating activities after workingcapital changes and payment of Income Tax of Rs 6.693 billion was Rs 23.225billion, an increase of Rs 10.448 billion over the same period last year. Netcash used in investing activities increased by Rs 1.751 billion to Rs 5.359billion against Rs 3.608 billion during first half of 2006-07 mainly due toincrease of Rs 496 million in fixed capital expenditure and decrease of Rs 1.199billion on interest and dividend income. Net cash used in payment of dividendwas Rs 17.121 billion as against Rs 16.602 billion paid in first half of 2006-07resulting in net increase of Rs 519 million in cash used in financingactivities. Increase in cash flow from operating activities, and net cashutilized in investing and financing activities resulted in net cash increase ofRs 745 million to ending cash balance of Rs 18.740 billion. Dividend Directors of the Company are pleased to declare an interim dividend of Rs 2.00per share (20 %). This is in addition to first interim dividend of Rs 1.75 pershare (17.50%) totalling to Rs 3.75 per share (37.5 %) for the year ending June30, 2008. Discoveries During the first half, OGDCL discovered gas and condensate at its MoolanExploratory Well-1 located in district Hyderabad of Sindh province. Shortduration initial testing of zone 1 and 2 shows production capacity of the wellas 10.46 MMcfd of gas and 229 BPD of condensate. Another gas / condensatediscovery has been made by the Company in January 2008 at its Pasakhi East - 1Exploratory well also located in district Hyderabad of Sindh province. Thediscovered well has been tested to produce 10.7 MMcfd of gas and 155 BPD ofcondensate. Production During the first half, crude oil production increased by 4,507 barrels per daycompared to first half of 2006-07. Crude oil production from OGDCL's own fieldsand share in operated joint venture fields increased by 17% mainly due to startof production from Mela-1, Chanda-2 and Pasakhi North East-1 in addition toincrease in production from existing fields like Kunnar, Bobi, Tando Alam andDakhni. Share of production from non-operated joint venture fields decreased by12% resulting in net increase in crude oil production by 11% over same periodlast year. Company's gas production from own fields and its share in operated jointventure fields including production from subsidiary company increased by 13%.This increase is mainly driven by enhanced production from Dakhni, Uch, Qadirpurfields, restoration of production from Loti and Pirkoh fields and start of gasproduction from Mela-1 and Chanda-2. Share of gas production from non-operatedJV fields decreased by 9% resulting in net increase in gas production of 8% oversame period last year. LPG net production also increased by 4% during the periodcompared to same period last year. During the first half, Company's average daily net production including itsshare in operated and non-operated joint venture fields was as follows: July - December July - December PRODUCTS 2006 2007Crude oil Barrels 39,578 44,085Gas MMcf 894 963LPG M.Tons 366 382Sulphur M.Tons 61 68 - Daily production has been worked out at 365 days / year. - Gas production during July-Dec 2007 includes subsidiary Company production of 20 MMcfd (July-Dec2006: 11 MMcfd) Exploration and Development Activities In order to maintain persistently proactive approach in exploration activities,OGDCL is continuously working to acquire new exploration blocks. In this regard,two new blocks were added to the inventory i.e. Eastern Offshore Indus - A wasgranted on July 05, 2007 covering an area of 2,500 Sq. Kms. The work commitmententails 271.52 work units and it lays on the platform area of Indus Off-shoreBasin. Shaan Exploration License (Block No. 3069-4) was granted to OGDCL on July12, 2007. This area is located in Qila Saifullah, Zhob and Musa Khel Bazar ofBalochistan Province and OGDCL is committed to shoot and process 200 L.Kms 2Dseismic, geological field work of 350 L.Kms and drilling of one optionalexploratory well up to 2,000 M or top of Jurrasic formation. OGDCL's Geological Party is currently working in Kalchas area where basic fieldmapping, sampling and section measurement is in progress. To abreast therecommended needs of geological surveys, five seismic crews acquired data inDakhni, Dhudial, Chakral, Khiranwala, Rachna, Multan South, Pakhiwala andKhewari blocks. OGDCL achieved 915 Line Kms of 2-D and 362 Sq. Kms of 3-D seismic survey duringthe period under review and carried out drilling operations on number ofexploratory, appraisal and development wells. Twenty one locations were markedon ground, out of which seven new exploratory and development wells namely SaraWest-2, Sono Deep -1, Qadirpur-30, Kunnar Deep-5, Sara West-3, Pakhro-1 andKal-3 were spudded during July-December 2007. Three more exploratory wellsnamely Reti-1, Kunnar South-1 and Moolan N-1 were spudded in January 2008. During the first half, OGDCL completed drilling of fourteen exploratory anddevelopment wells. Out of seven exploratory wells completed, six were declaredas dry and Moolan-1 was declared as gas/condensate discovery. Seven developmentwells were completed and Thora-6, Tando Alam 17, 19 & 20, Qadirpur-29 werebrought into production during first half of current financial year. Productionfrom Qadirpur-30 started in January 2008. Annual Turn Around (ATA) was completedat Qadirpur, Uch and Dhodak as part of scheduled annual maintenance. In thesecond half of current financial year, we anticipate to bring three moredevelopment wells namely Chak-66 North East, Chanda-3 and Mela-2 on production.OGDCL also anticipates completion of on going Qadirpur Additional Gas CapacityEnhancement Project in later part of 2008 with an expected enhancement of 100MMcfd of gas in the next financial year. On the international front, OGDCL is pursuing various exploration opportunitiesfocused in North Africa, South East Asia and Central Asian States. Workingtowards that end, the Company participated in 4th bidding round of Libya held inDecember 2007 and also intends to participate in forthcoming bidding round inAngola for which OGDCL has already been pre-qualified. Outlook During the first half of the year, OGDCL benefited from enhanced crude oilproduction and high realized prices resulting in improved operating results andcash flow. Based on production growth trend and current exploration anddevelopment activities, we anticipate Company's overall performance in line withexpectations during the current financial year and we look forward to achievethe operational and financial targets set in the business plan. The second half of the year will be a period of high exploration and developmentactivities which includes extensive seismic acquisition and drilling ofexploratory/appraisal and development wells. Successful development drillingwill further improve oil and gas production and operating cash flow which willfacilitate the Company to enhance its business canvas by availing the E&Popportunities within and outside Pakistan. Company's high impact exploration and development plan backed by strongfinancial position will contribute in creating significant asset value per shareby delivering growth in oil and gas reserves, production and earnings. We areconfident that the pace of growth will continue in the times to come. This information is provided by RNS The company news service from the London Stock Exchange