Mari Petroleum Company Limited - Exploring New Horizons (Detailed Report)
- We re-initiate coverage on Mari with our DCF based Dec-17 PT of PKR2,009/sh, offering an upside of 27% from last closing. Our liking for the stock emanates from i) a robust 3 years earnings CAGR of 58%, ii) recent 62% upgrade of Mari's reserves, iii) ~4x higher prices on new finds & iv) aggressive exploration targets where the company is looking to drill 9wells/annum over next 3 years, looking to add reserves of ~679bcf (~87% RRR).
- The stock is trading at a PEG of 0.29x relative to ~1.0x in the broader Elixir universe & an EV/Reserves of 2.6x (USD/mmboe) relative to 5.5x on average for its peers.
- Upside to our estimates include; i) higher than estimated flows from Mari, ii) higher than estimated oil prices & iii) further exploratory success.
Mari Petroleum Company Limited is a Pakistan-based exploration and production company. The Company is engaged in managing and operating Pakistan's gas reservoir at Mari Field, District Ghotki, Sindh. Its segments include Exploration and Production; Mari Seismic Unit, and Mari Drilling Unit. The Exploration and Production segment includes various upstream business activities. The Mari Seismic Unit segment includes two-dimensional (2D)/three-dimensional (3D) seismic data acquisition. The Mari Drilling Unit segment includes onshore drilling services. In addition to Mari Gas Field, it holds development and production leases over Zarghun South and Sujawal Gas Fields, and has operatorship of eight exploration blocks (Ziarat, Harnai, Sukkur, Sujawal, Karak, Ghauri, Peshawar East and Khetwaro). Its other products include crude oil, condensate and liquefied petroleum gas (LPG). Its exploration and production assets are spread across Pakistan in all four provinces.
Elixir Securities Pakistan is a Corporate Member of the Pakistan Stock Exchange & Pakistan Mercantile Exchange and is one of the leading securities brokerage & investment banking firms in Pakistan, established since 1994. Our principal business activities include all aspects of Pakistan’s Capital Markets covering Securities Brokerage (Equities, Fixed Income and Commodities), Corporate Finance & Capital Markets Advisory (M&A, ECM, DCM) and Investment Research (Economics & Securities). We are one of the most active & aggressive Broker-Dealers in Pakistan executing trades for most of the Top 20 Global Brokers with unmatched corporate access credentials and have successfully advised and closed on some landmark ECM transactions in the history of Pakistan including the largest deal in frontier Asia (USD 1.02 billion). Our Clients include foreign and domestic financial institutions (Banks, Asset Managers, Insurance Companies, Pension Funds) corporates, HNWI’s and retail investors. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media.
Elixir Securities Pakistan is the proud recipient of many awards & recognitions including AsiaMoney’s Brokers Poll 2017, FinanceAsia’s Pakistan Best Investment Bank and Best Broker 2017, The Asset’s Best Brokerage House in Pakistan 2016, Asiamoney’s “Best Domestic Equity House 2015 in Pakistan”, The Asset Triple A Country Awards 2015 - Pakistan “Deal of the Year” and “Deal of the Year-Highly Commended”, CFA Society of Pakistan Awards for Year 2015 “Best Research Analyst (1st Rank), CFA Society of Pakistan Awards for Year 2014 “Best Research Analyst (1st Rank)”, “Best Trader” 2nd Runner-up (3rd Rank), The Asset Triple A Country Awards 2014’s “Best Deal in Pakistan” and Capital Finance International’s nomination for “Best Equity Research in Pakistan 2010”.
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