Ismail Iqbal Securities - Oil Gas Development Co. Ltd. (OGDC) Oil Giant Eyes Business Expansion

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Ismail Iqbal Securities

Oil Giant Eyes Business Expansion

We have updated our valuation for Oil & Gas Development Company (OGDC) after incorporating the company’s 2QFY18 performance, PPIS’ latest reserve data, revised assumption on Arab Light prices and PKR/USD exchange rate forecasts. Our new target price for December 2018, clocks in at 189.20/share, providing an upside of 7% from last closing price, thus we are maintaining a Neutral stance on the scrip. Impact of major revisions in PPIS’ reserve estimates on OGDC was diluted owing to the company’s broad portfolio of hydrocarbon assets. Regarding the TAL block re-pricing issue we have followed the management’s guidance by reverting our gas price assumption for the block to Petroleum Policy 1997 (PP97). The management is considering different business diversification opportunities, including moving towards the downstream segment and gaining exposure to international hydrocarbon assets, which we believe will add value to the company.

03/04/2018 5 EN

Underlying

Oil & Gas Development Co. Ltd.

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.

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PK0080201012 Pakistan Stock Exchange Pakistan

Provider

Ismail Iqbal Securities

Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.

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Oil Giant Eyes Business Expansion

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

Pakistan E&Ps: Unwarranted valuations despite cash-flow constraints

Oil & Gas Development: 1QFY23 Result Review

Â Oil prices up owing to production outages in the U.S Gulf of Mexico

Oil prices closed marginally up during the out going week

PSMC outperforms during March with sales up +23% YoY

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