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OGDC_FY22 Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Nov 25, 2022)

Oil and Gas Development Company Limited (OGDCL) held its analyst briefing earlier yesterday, wherein the following was discussed:

• To recall, the company posted the highest quarterly PAT PkR53.3bn (EPS: PkR12.4) for 1QFY23, higher by 145%/58.5% on a QoQ/YoY basis.
• Major projects during the year were as follows: Discovery of Wali block with cumulative potential of 219bcf/13mn bbls oil and exploration and appraisal activities at Abu-Dhabi offshore block 5.
• Other developments during the year were: company entered into a framework agreement with the GoP, Government of Balochistan, GHPL, PPL and Barrick Gold Corporation for extraction of gold and copper reserves from Reko Diq.
• As per company presentation, OGDCL holds 87.3k square km of exploration coverage with total of 57/111 exploration/development licenses, respectively. Province wise concession shares were as follows: KPK 19%, Sindh 21%, Punjab 21%, 39% Baluchistan.
• Seismic survey acquisition during the last six fiscal years was 15,380 Line km of 2D and 3,766 sq. km of 3D portraying. OGDCL’s share in total industry stood at 80%/31% for 2D surveys/3D surveys, respectively. Finally, OGDCL’s share in gross production stood at 23%, with industry’s total production standing at 73.4k bbd as at June’22.
• According to management, average natural decline rate of major oil fields stands at 16% (5-yr average). Although, the said decline rate has been arrested to 6-8% more recently with the help of workovers and development wells etc.
• Industry’s net gas production stood at 3,390mmcfd (29% OGDCL’s share) during FY22. Natural depletion rate stands at 8% for major fields (Mela, Nashpa, Kunnar Pasakhi Deep etc.), but has been arrested at 5% by the company through workovers and development wells etc.
• Management stated that Reko diq project is a stepping stone for the diversification strategy company is trying to achieve. Company is also trying to move into power and other energy projects as well.