KARACHI – The exploration cost of Pakistan Oilfields (POL) contracted by 63 percent since the same time last year in the second quarter of FY11 as no established well was declared dry amidst passive drilling activity, while other incomes of the company rose by 35 percent annually during the period owing to healthy dividend income from associated undertakings including NRL and APL.
POL posted a Profit after Tax (PAT) of Rs 2.968 billion (EPS of Rs 12.55) for the second quarter of FY11 against PAT of Rs 1.893 billion (EPS of Rs 8.00) for the corresponding period in the previous year. There was a 57 percent annual jump in earnings for the quarter which translates into first half of FY11 PAT of Rs 5.201 billion (EPS of Rs 21.99). Furthermore POL announced an interim dividend of Rs 10 per share.
The revenue stream showed a surge of 40 percent for second quarter of FY11 owing to rise in realised wellhead price of oil and gas and a spike in production of both oil and gas by 15 percent and 55 percent annually in the period. Commencement of production from BELA, inflows from ADHI and a boost in term of inflows from Manzalai have bolstered overall volumes, hence affecting the topline of the company.
It is also expected that the latter half to outdo the preceding half primarily driven by topline growth, said Salman Vidhani at HMFS, adding that since revenue from crude oil sales constitutes 45 percent of the pie, estimated 19 percent rise in international crude oil price for the second half is to bolster the bottomline.
Additionally Mamikhel has been connected with Manazlai CPF, incremental flows along with full impact of production from BELA are expected to strengthen the topline growth even further. Furthermore realized wellhead gas prices are likely to witness meager jump as international crude oil prices were up 3.5 percent ($78 per barrel) during the preceding half.
Maramzai was connected to Manzalai CPF in early January 2011 with the flow of 1,600 BPD and 40 MMCFD of oil and gas respectively. Subsequently, production from Manzalai CPF peaked at 7,546 BPD and 323 MMCFD of gas during the second week of January 2011; however, field operations have been suspended by MOL due to security concerns.
Makori East in which POL has a stake of 21.05 percent has been tested in open hold DST with initial flows of 3,209 BPD of oil and 10.7 MMCFD of gas. Further drilling is underway as deeper reservoirs are expected to yield better flows. Tolanj has also tested positive with an initial flow of 16.3 MMCFD of gas. Total production from TAL now drives more than a third of the topline as production from the block now already constitutes 38 percent of oil and 55 percent of gas production of the company.
MOL is an operator in both Margala and Margala North blocks near Islamabad where POL has 30 percent stake as the only joint venture (JV) partner. Both the blocks are located near highly potential Potwar basin. Keeping in view of the track record of MOL at finding hydrocarbon, it is believed that the Margala block is another potential prospect which may turn out to be beneficial, he added. Drilling at exploratory well MG 1 in the block is currently in progress.
