Pakistan E&Ps: Triggers in the making, (AKD Daily, Sep 29, 2017)
Arab Lite has recently hit US$55/bbl mark bringing the index heavy Oil and Gas exploration sector back into limelight (outperformed KSE-100 index by 3.8%CYTD). Fueled by geo-political tensions and hopes of a market rebalance, intl. oil prices are firming up and the domestic E&P sector remains a major beneficiary where companies in our universe derive ~43% of the FY18E revenue through oil. Moreover, taking advantage of low cost Oil Field Services around the globe post FY14, the companies embarked on multiple exploration programs including geological surveys, seismic data acquisition (total 2D/3D seismic data acquisition reached its peak in FY16 with 7632kms/6585 sq. kms) and drilling of wells in lesser explored areas of Balochistan and KPK. A sneak peek at the ongoing E&P activities reveals that post- security clearance, seismic activities are underway in blocks of Balochistan and KPK by OGDC and PPL. Workovers in Adhi, Sui, Kandhkot and various other fields, appraisal and tie-in of newer discoveries in TAL block (Tolanj West, Makori Deep etc), and plans to spud 100 wells in FY18 shall act as major volumetric triggers in times to come. In this backdrop, PPL remains our top-pick with a TP of PkR205/sh, providing a potential upside of 17.2% from last close.
Oil and Gas Development Company is a petroleum exploration and production (E&P) company in the Pakistan oil and gas sector. Co.'s principal activity is to explore, develop, produce and sell oil and gas resources and related activities. Co. also manufactures Gas, Liquefied Petroleum Gas, Crude Oil, and Sulphur. Co.'s major fields contributing in the aforesaid production of crude oil include Nashpa, Kunnar/KPD, Pasakhi, Sinjhoro and Rajian and for gas include Qadirpur, Uch, KPD, Nashpa and Dakhni. Co. carries out exploration and development activities on its own as well as in joint ventures with other oil companies.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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