The oil exploration and production (E&P) firms listed at the country’s stocks market posted what the analyst said a phenomenal earning growth in 9MFY12. Recovery in the country’s hydrocarbon production along with elevated oil prices were the key factors cited by the analysts. During the period under review, the sector depicted an earning growth of 36 percent to Rs 113 billion as against Rs 83 billion in the same period last year. Due support also came from other income and restricted growth in operating expense. Contrary to last few years, OGDC, amongst the individual companies, led the way with 41 percent growth in the bottomline, followed by 33 percent growth in PPL’s profitability. POL depicted a bottomline growth of 19 percent. “With pricing scenario continue to be in favor of the sector with key productions triggers still to be realized,” said Nauman Khan of Topline Research. The analyst said firm international crude oil prices on the back of heightened geopolitical situation had reflected positively on the listed E&Ps, while better hydrocarbon production also played its due role. Thus, benefiting from positive price as well as volume variance, listed sector topline grew by 19 percent to Rs 241 billion in 9MFY12 as against Rs 203 billion recorded in the same period last year. Gas production primarily on account of commissioning of KPD project was up 4 percent, while enhanced production from Tal and Naspha block diluted the impact of decline production from other fields in oil front. In addition, 124 percent jump in sector’s other income to Rs 14.6 billion has also supported the profitability growth, with heads contribution to PBT improving from 5.2 percent last year to 9.1 percent this year. On the cost front, operating expense witness a restricted growth of 11 percent primarily. Effect of higher lifting cost and dollar deprecating was diluted by decline in exploration expense due to muted E&D activities and no major dry-well.
