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...
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 ...
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...
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...
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, ...
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...
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...
Pakistan Petroleum Ltd (PPL) has posted a consolidated net profit of PKR14.2bn (EPS PKR5.21) for 4QFY21, up 18% qoq and 31% yoy, higher than our EPS estimate of PKR4.60. This takes FY21 net profits to PKR52.3bn (PKR19.21/sh), up 6% yoy. PPL also announced a final cash dividend of PKR2.0/sh (full year PKR3.5/sh), higher than our expectation of PKR1.5/sh. Major deviations from our 4Q estimate are lower Opex and effective tax rate, but these are partly offset by much higher exploration expenses....
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
We estimate cumulative profits of our E&P Universe to rise by c.12% qoq to PKR43.7bn for 4QFY21, where revenues are expected to grow by c.4% qoq only. The expected earnings growth is majorly driven by the lack of exchange losses and lower exploration expenses. Production growth for the three E&Ps we cover remained divergent during 4Q. OGDC maintained its oil and gas production levels; while PPL and POL saw nearly 5% qoq decline, because of a turnaround at Gambat South and continued depletion ...
Pakistan Petroleum Ltd (PPL) has posted an unconsolidated net profit of PKR12.0bn (EPS PKR4.42) for 3QFY21, up 2% qoq but down 15% yoy, below our EPS estimate of PKR5.05. This takes the 9MFY21 net profits to PKR38.1bn (PKR14.01/sh), flat yoy. Deviations from our estimate emanated from (i) lower-than-expected revenues, and (ii) higher exchange losses, but these are partly offset by (iii) lower Opex. Key Highlights for 3QFY21: Net Sales have clocked in at PKR37bn, flat qoq but down 10% yoy, aga...
We estimate cumulative profits of our E&P Universe to rise by c.20% qoq to PKR40.5bn for 3QFY21, majorly led by c.35% qoq higher average oil prices and normalization of production in some major fields (flat otherwise). Production trends for the three E&Ps were varied; where OGDC saw a 9% qoq recovery in gas output, while both oil and gas production of PPL and POL were moderately lower qoq due to natural depletion. Barring OGDC, exploration expenses will continue to nosedive yoy. Despite a sta...
PPIS recently updated the 2P reserves of oil and gas in Pakistan. Overall Gas reserves, by December 2020, have risen 1.2% to c.21.2tcf – compared to the previous revision for June 2020. Oil reserves, however, have declined c.1.5% to c.266mmbbl, from c.270mmbbl in June 2020 (based on corrected data by PPIS). KEY HIGHLIGHTS OF THE CHANGES IN HYDROCARBON RESERVES: * Increase at Gambat South (Operator, PPL): Increase at Gambat South (Operator, PPL): The oil reserves of a cluster of fields in Gam...
We raise estimates for our E&P Universe, on the back of higher oil prices, which we now assume at US$50/60/60 per barrel for FY21/22/23f. Our EPS estimates have thus risen by 7-8% on average for these years. We reiterate our Overweight stance on E&Ps. In our view, the market has underappreciated the sector, since the rally in oil prices began in Nov’20, where stock prices have underperformed oil prices by nearly 20%. Other positives such as recent developments in the Energy chain have also be...
We expect our E&P Universe to post cumulative profits of c.PKR36.0bn, down 13% qoq and 11% yoy, because of (i) lower gas production, (ii) flat oil prices qoq, and (iii) c.4% PKR appreciation (Fx losses). POL may be the only E&P with sequentially higher profits. Key drag to production came from lower gas output in November 2020, when most large fields were undergoing annual turnaround. Lower off-take by oil refineries would have also reduced gas production from associated fields. LPG productio...
Pakistan Petroleum Ltd (PPL) posted an unconsolidated NPAT of PKR50.3bn (EPS PKR18.47) compared to PKR61.6bn (EPS PKR22.65) in FY19, where the 17% yoy decline was due to (i) c.23% yoy lower oil prices, (ii) lower production due to Covid-19 induced disruptions, and (iii) lower exchange gains. PPL also announced an annual payout of PKR1.0/sh. Production guidance * PPL guided total production of about 900mmcfd equivalent in FY21, about same as in FY20. * In Sui, PPL has been able to conta...
PPL has a take or pay agreement with GENCOs on 72.5% of the 200mmcfd (or 145mmcfd) gas flows from Kandhkot field. Currently there is no offtake from Kandkhot field since the last 20 days and the company can not sell gas from this field to any other party. The take or pay agreement is also not being implemented. The management is trying to revise the terms of the contract so that the unsold gas can be sold to other parties. The overdue receivables of the company have increased to Rs305bn as of...
Pakistan Petroleum Ltd (PPL) has posted a consolidated NPAT of PKR14.3bn (EPS PKR5.26) for 1QFY21, up 32% qoq but flat yoy, beating our estimate of PKR4.60/sh. Major deviation from our estimate arose from higher revenues (most likely gas revenues, explained below). Key highlights for 1QFY21: * Net Sales are up 25% qoq to PKR39.3bn, partly on the back of 13/10% qoq higher gas/oil production to c.709mmcfd/14,400bpd, which normalized after the lockdowns. Additionally, and against consensus expe...
Pakistan Petroleum Limited (PPL) reported profit after tax of Rs14.4bn (EPS: Rs5.27), significantly higher than industry consensus and our expectation of Rs4.5/ share. Deviation from our expectations stems from higher Net Sales, which recorded a decline of 6% YoY (vs. our expectation of -11%). Hydrocarbon production of the company during 1QFY21 fell by 1.7% QoQ. Similarly, Arab Light crude oil prices declined by 32% YoY to US$43/barrel in 1QFY21. Operating expenses clocked in at US$4.5/barr...
After the worst quarter (4QFY20) since the oil price collapse of 2014-16, E&Ps’ profitability is expected to improve meaningfully in 1QFY21, thanks to normalized production levels and recovery in international oil prices. However, profits will remain below last year’s level. Lifting of lockdown in Pakistan enabled major oil fields to increase output by up to 50% qoq. International crude oil prices recovered to a steady range of US$40-45/bbl. Exploratory activity is noticeably declining sector...
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.