reports
- Team AKD Research
OGDC_FY22 Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Nov ...
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 w...
- Wajid Rizvi
Pakistan E&Ps: Unwarranted valuations despite cash-flow constraints
We raise our E&P estimates on higher assumed oil prices, which we now forecast at USD80/70LT per barrel for FY23/24f, as against USD60/60LT earlier. Our earnings estimates have increased by 10-20% on average for these years and we reiterate our Overweight stance on E&Ps. We believe that government’s efforts to resolve the accumulation of circular debt has been underappreciated where stocks have underperformed oil price by 16% in the last 1 year. More positives have risen from currency devalua...
- Wajid Rizvi
Oil & Gas Development: 1QFY23 Result Review
OIL PRICES AND PKR DEVALUATION HELP OGDC HIT ALL-TIME HIGH QUARTERLY PROFITS OGDC has kicked off FY23 with the highest ever quarterly earnings outcome of PKR53.3bn (EPS:PKR 12.39). Earnings are 1.5x higher from the previous quarter owing to lower super tax applicable in the quarter. Higher oil prices and PKR devaluation during the quarter kept oil and gas revenues at the higher end. The company also announced an interim payout of PKR1.75/share. Key highlights * Net sales hit an all-time high...
- Wajid Rizvi
Oil & Gas Development: 4Q sees heavy opex and exploration cost; more t...
OGDC announced earnings of PKR 134bn (EPS: PKR 31.11), higher by 46% YoY, where higher oil prices and other income compensated for the spike in operating expenses, exploration cost and one-off high super-tax charge. Earnings for 4Q clocked in at PKR21.7bn (EPS: PKR 5.05) against our estimate of PKR 27.6bn (EPS:PKR 6.44). A higher final payout of PKR 2.50/share (IMS expectation: PKR1.00/share) was also declared. We also present key takeaways from management call that was held later during the ...
- Wajid Rizvi
Pakistan Petroleum: FY22 Review: Abysmally low 4Q earning from excessi...
PPL announced FY22 PAT of PKR 53.5bn (EPS: PKR 19.68) which puts 4Q earnings at PKR 1.2bn (EPS: PKR 0.45). Abysmally lower-than-expected 4Q earnings (IMS expectation of PKR4.12/share) is a result of exceptionally high exploration costs and super tax. This has also dented the expected payout as company announced PKR0.5/share as final dividend, taking FY22 DPS to PKR2.00/share. This is the lowest payout ever made by PPL for any quarter. KEY HIGHLIGHTS: * Net sales clocked in at PKR61.77bn for ...
- Wajid Rizvi
Pakistan E&Ps – 4Q22 Previews – Tax & TCC fine to trim payout; POL wil...
* The super tax is expected to reduce earning of E&P Universe by 34% QoQ to PKR46bn despite topline rejoicing from higher oil prices and PKR devaluation during the period. * Both OGDC's and PPL's payout will be impacted by the tax as well as the fine of USD187.5mn each to TCC as the long-standing dispute of Reko Diq was reconstituted. However, POL will likely emerge with a hefty payout of PKR 50.00/share where Fx gains will overcome super tax impact. * We remain positive on the imp...
Pakistan Oil& Gas_Projections incorporating macro-developments, (AKD D...
AKD Daily Pakistan Oil& Gas: Projections incorporating macro-developments We have revised our oil price and PkR/US$ estimates to build in current macro outlook in our models. Consequently, we have revised our oil assumptions for FY23 and FY24 to US$95/bbl and US$90/bbl while we have also revised our estimates for PkR/US$ exchange parity to 198/US$ for FY23 and 210/US$ in FY24. We have assumed an annualized depreciation of 6% thereon. At the same time we have also increased the RF rate to 15...
- Team AKD Research
Stock Smart Weekly
StockSmart Weekly Review After the surge which the market experienced last week based on positive sentiment about the new Government formed by the coalition parties, we have now seen a downward correction. The KSE-100 index has lost 1,049pts this week, down 2.25%WoW to close at 45,553pts. Moreover, the Rupee has depreciated by 2.86%WoW, due to the growing Current Account deficit. Due to uncertainty regarding new economic policies, the ma...
- Muhammad Saad Ali
Pakistan: OGDC and PPL venture into the promising Reko Diq mining proj...
A RECONSTITUTED PROJECT… Oil & Gas Development Co. (OGDC) and Pakistan Petroleum Ltd (PPL) have entered into a non-binding agreement with the Government of Pakistan (GoP), Government of Baluchistan (GoB) and Barrick Gold Corporation to participate in the reconstituted Reko Diq project. As per the arrangement, Barrick Gold will have 50% stake in the project – along with being the operator and manager of the mining field. The remaining 50% stake will be divided among the GoB – 10% as free-carry...
- Muhammad Saad Ali
Pakistan Oil & Gas: Big changes for OGDC fields and a key upgrade at T...
As per latest PPIS data, overall 2P Gas reserves in Pakistan have declined c.5% to 19.9tcf as of December 2021, down from c.20.95tcf by June 2021. Total 2P Oil reserves have declined c.10% to c.222.9mmbbl, from c.249.0mmbbl as of June 2021. KEY HIGHLIGHTS OF THE CHANGES IN HYDROCARBON RESERVES: * Substantial changes in Oil reserves of OGDC: Total Oil reserves of the fields operated by OGDC have fallen 23% to 82.8mmbbl as of December 2021. Among the large assets, oil reserves of Nashpa, Kunna...
- Muhammad Saad Ali
Pakistan Petroleum: 2QFY22 review – Misses expectation on one-time cha...
Pakistan Petroleum Ltd (PPL) has posted net profits of PKR14.3bn (EPS: PKR5.25) for 2QFY22, down 15% qoq but up 21% yoy; which misses our EPS estimate of PKR6.80 due to higher exploration expenses and share of loss from PIOL (without which 2Q EPS would have been PKR6.74/sh). The result takes 1HFY22 net profits to PKR31.1bn (EPS: PKR11.44), up 19% yoy. PPL also announced an interim payout of PKR1.5/sh, in line with expectations; it will be the first interim payout since 2018. KEY HIGHLIGHTS FO...
- Muhammad Saad Ali
Oil & Gas Development: 2QFY22 review – beats expectations on higher ex...
Oil & Gas Development Co. Ltd (OGDC) has posted net profits of PKR35.3bn (EPS PKR8.20) for 2QFY22, up 5% qoq but nearly doubling yoy; which beats our EPS estimate of PKR7.58 majorly due to higher exchange gains. The result takes 1HFY22 net profits to PKR68.9bn (EPS: PKR16.02), up 63% yoy. The payout of PKR2.0/sh (1H DPS PKR3.75) is lower than our expectations but higher than the average payout in the previous four quarters (of PKR1.66/sh). KEY HIGHLIGHTS FOR 2QFY22: * Net Sales have clocked ...
- Muhammad Saad Ali
Pakistan E&Ps: 2QFY22 result previews
HIGHER OIL PRICES TO KEEP EARNINGS ELEVATED * We estimate our E&P cluster to post near-record combined net profits of c.PKR57bn, up 69% yoy (flat qoq), thanks mostly to multiyear high crude oil prices and continuous PKR devaluation. The results should be accompanied by good payouts from all companies. * Compared with the previous quarter, gas production was mostly flat (but up 4% for OGDC), while oil production fell 5% qoq on average due to depletion at major assets across our coverage....
- Muhammad Saad Ali
Oil & Gas Development: Wali discovery – Promising to be a material add...
In July 2021, Oil & Gas Development Co. (OGDC) notified a discovery in the exploratory well, Wali-1 (KPK). The well initially flowed about 1,000bpd of oil and 12mmcfd of gas – from one of three formations (Kawagarh, Hangu and Lockhart). Note that the well is located in close proximity to two of Pakistan’s largest oil assets – Nashpa and Tal block – both of which produced over 20,000bpd of oil at peak. OGDC has 100% stake in Wali block. FLOWS HAVE IMPROVED SIGNIFICANTLY A recent news report in...
- Muhammad Saad Ali
Pakistan E&Ps: Another circular debt settlement
As per channel checks, the government is presently in discussions with the state owned E&Ps – majorly OGDC and PPL – to settle their outstanding circular debt dues (related to the indigenous gas sales only). We understand that this will include a combination of the below measures: * Issue of some government security (PIBs or Sukuk) against the receivables of the two E&Ps, * Increase in consumer gas tariff, and * Elimination of outstanding tax payments to the government (GDS, GIDC, ...
- Muhammad Saad Ali
Oil & Gas Development: 1QFY22 review – Earnings beat expectations but ...
Oil & Gas Development Co. (OGDC) has posted net profits of PKR33.6bn (EPS PKR7.82) for 1QFY22, up 34% qoq and 44% yoy; which is slightly higher than our EPS estimate of PKR7.55, where the variance emanates from lower Opex and exploration expenses than expected. OGDC announced an interim dividend of PKR1.75/sh (lower than PKR2.5/sh, that we expected). KEY HIGHLIGHTS FOR 1QFY22: * Net Sales have clocked in at PKR71.5bn, up 14% qoq and 27% yoy, where (similar to peers) production was flat qoq -...
- Muhammad Saad Ali
Pakistan Petroleum: 1QFY22 review – misses estimate on higher Opex & e...
Pakistan Petroleum Ltd (PPL) has posted a consolidated net profit of PKR16.9bn (EPS PKR6.20) for 1QFY22, up 19% qoq and 18% yoy, which is lower than our EPS estimate of PKR7.03. The key deviations from our estimates are higher Opex and exploration expenses. KEY HIGHLIGHTS FOR 1QFY22: * Net Sales have clocked in at PKR43.6bn, up 19% qoq (up 11% yoy), where gas production was higher by 4% qoq to c.639mmcfd but oil production fell sharply by 10% qoq to c.12,660bpd. Revenues are majorly lifted b...
- Muhammad Saad Ali
Pakistan E&Ps: 1QFY22 results preview
PKR WEAKNESS AND HIGHER OIL PRICES TO ELEVATE EARNINGS * Despite flattish to mildly lower production, our E&P Universe is expected to post cumulative net profits of PKR56.4bn for 1QFY22, up 31% qoq and 36% yoy – thanks to higher oil and gas prices and sharp PKR devaluation. Notably, the incremental earnings emanated largely from PKR weakness. * As per PPIS data, gas production for all three companies in our coverage rose about 3% qoq, even though some large assets depicted sharp decline...
- Shahrukh Saleem
Pakistan Oil & Gas_Crack spreads reacting to energy crunch, (AKD Daily...
AKD Daily Pakistan Oil & Gas: Crack spreads reacting to energy crunch, Refining margins continue to tread on the same path with spreads for HSD/MOGAS remaining at USD2.4/3.6/bbl for first fifteen days of Sep’21 where HSD spreads rebound sharply from USD0.54/bbl for last fifteen days of Aug’21 Even though export of MOGAS from China and India has declined, the cracks continue to trade in the range of USD4-6/bbl as demand of the product is facing a slower recovery compared to HSD which is main...
OGDC_Best placed amid oil price upsurge , (AKD Daily, Sep 10, 2021)
AKD Daily OGDC: Best placed amid oil price upsurge OGDC continues to trade at undemanding valuations even as crude oil prices witness a 45% CYTD increase. Going forward, the oil demand outstripping production in 2022 is expected to be contained by strengthening US$. We therefore, incorporate oil prices for FY22/23 at US$68/60 per bbl and USD PkR exchange rate of 163/171 in our projections. OGDC stands out in the E&P sector with a diversified production base, where c. 70% of oil and gas prod...
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