Karachi, November 25, 2022 (PPI-OT): OGDC: Analyst Briefing Takeaways

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 were: company entered into a framework agreement with the GoP, Government of Balochistan, GHPL, PPL and Barrick Gold Corporation for extraction of gold and copper reserves from Reko Diq.

As per company presentation, OGDCL holds 87.3k square km of exploration coverage with total of 57/111 exploration/development licenses, respectively. Province wise concession shares were as follows: KPK 19%, Sindh 21%, Punjab 21%, 39% Baluchistan.

Seismic survey acquisition during the last six fiscal years was 15,380 Line km of 2D and 3,766 sq. km of 3D portraying. OGDCL’s share in total industry stood at 80%/31% for 2D surveys/3D surveys, respectively. Finally, OGDCL’s share in gross production stood at 23%, with industry’s total production standing at 73.4k bbd as at June’22.

According to management, average natural decline rate of major oil fields stands at 16% (5-yr average). Although, the said decline rate has been arrested to 6-8% more recently with the help of workovers and development wells etc.

Industry’s net gas production stood at 3,390mmcfd (29% OGDCL’s share) during FY22. Natural depletion rate stands at 8% for major fields (Mela, Nashpa, Kunnar Pasakhi Deep etc.), but has been arrested at 5% by the company through workovers and development wells etc.

Management stated that Reko diq project is a stepping stone for the diversification strategy company is trying to achieve. Company is also trying to move into power and other energy projects as well.