POL_FY23 Analyst Briefing takeaways (AKD Off the Analyst's Desk Nov 07, 2023)
AKD, Off the Analyst's Desk
POL_FY23 Analyst Briefing takeaways
Pakistan Oil Fields (POL) held its analyst briefing today to brief investors about FY23 financial results and shed light on the future outlook:
- To note, company posted record NPAT during FY23, standing at PkR36.4bn (EPS: PkR128.4), up 60%YoY. With regards to volumes, crude oil/natural gas production stood at 5,010bpd/65MMCFD during the year, down 9.3%/8.1%YoY.
- Company plans to spud 6 development wells namely Balkassar Deep-A1, Pindori-9, Makori East-5, Tolanj West-2, Adhi South 8 & 9 and Ratana 5A. With regards to exploration wells, Jhandial-3, Razgir and Gurgalot X-1 are in the works.
- With regards to Mamikhel South, company is obligated to pay 40% windfall levy on gas price differential between PP-12 and the stipulated sale price to the third party. As per management, price billed to third party is PP-12 price plus US$0.6/MMBTU
- With regards to falling oil production during FY23, management has attributed it primarily to the natural decline in production. However, the inclusion of Mamikhel South in the production profile has somewhat mitigated the impact. Company plans moving forward involves ongoing exploration and development of new blocks to ensure the sustainability of the company.
- Mamikhel South’s current oil production is ~2.6k bpd. As per management, its optimal production is around 4k bpd.
- With regards to unrepatriated dividend of PkR17bn present in the company’s books, management stated that the process is ongoing, and partial amount has already been remitted outward.
- Management expects company to incur CAPEX of ~PkR18bn in FY24.
- With regards to downward revision in reserves of Jhandial field, it's worth noting that another well, Jhandial-3, is currently in the drilling process. Importantly, the downward revision of these wells had no financial impact on the company's D&P asset base.
- Regarding crude oil discount, it varies from field to field. Company is receiving full price of Saudi Aramco platts (including yield differential) from production in Tal Block, as specified in the PCA (Petroleum Concession Agreement).
AKD Research
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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