POL to benefit the most from Tal block production

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KARACHI: Pakistan Oilfields Limited (POL) will be the chief beneficiary by dint of its low equity and production base as it has a 21 percent stake in the Tal block production.
The production from Tal is expected to reach 8,600 BOPD of oil and 367 MMCFD of gas by December 2011 as compared to 3,700 BOPD and 190 MMCFD recorded in the financial year 2010.
Oil and gas production of the company is expected to boost at a five-year compound annual growth rate of 9.4 percent from financial year 2010 to financial year 2015 from 5.2 million BOE to 7.3million BOE, primarily due to production flows from Tal block.
The financial year 2011 would be an exceptional year and would mark a turnaround for the company as oil and gas production is expected to record an annual surge of 34 percent and 38 percent respectively. The MOL recently announced a major discovery of oil and gas from its exploratory well in Makori East-1 at Tal block, which is located in Khyber Pakhtunkhwa and some areas of FATA.
It covers area of Kohat, Karak,Hangu, Bannu, North Waziristan and Orakzai agencies. This is a fifth major discovery in Tal block, which includes Manzalai, Makori, Mamikhel and Maramzai. According to company’s notice, the initial test revealed that the well has produced 3,209BBLS of oil and 10.7MMCFD of gas each day.
Currently, the well has reached 84 percent of its target depth and the full extent of the discovery will be evaluated after reaching target depth of 4,169 metres which is expected in the next three months. It is anticipated that the production flows from the field will commence from financial year 2012.
The OGDC and the PPL each hold a 27.8 percent stake in Tal block, while the share held by the POL is at 21.1 percent. Based on initial flows, the POL is expected to be the major beneficiary of this discovery due to its low equity and production base with an after-tax impact of Rs 3.70 per share. The impact on the OGDC and the PPL’s bottom-line is expected to be around Rs 1.17 per share and Rs 0.27 per share respectively.
After touching a low of 74 BOPD in April 2009, production from Pindori has augmented to a respectable level of 1,750 BOPD. However, the biggest question after this sudden rise is of sustainability as the total production from Pindori contributes approximately 12 percent to the POL’s revenues.
POL is one of the few fortunate companies in the energy chain which have not been affected by the ongoing circular debt crisis, as a vast majority of the POL’s oil is supplied to Attock Refinery, said Shahbaz Ashraf of Arif Habib Ltd.