Lahore, December 23, 2021 (PPI-OT):Zaver Petroleum Corporation (Pvt) Limited (ZPCL or the Company) is part of a group including Orient Petroleum Inc. (OPI) and Orient Petroleum Pty Ltd. (OPPL). Zaver Petroleum Corporation (Pvt) Limited is engaged in the exploration, development and production of oil and natural gas reserves in Pakistan. ZPCL operates one exploration block i.e., Sari South whereas it is a non-operational partner in four exploratory blocks i.e., Sakhi Sarwar, Marwat and Harnai South operated by Orient Petroleum Inc. and Bannu West operated by Mari Petroleum Company Limited.
ZPCL also holds non-operated working interests in Chanda D and PL under Shakardara Concession operated by Oil and Gas Development Company limited and Mehar and Sofiya D and PLs under Mehar Concession operated by UEP Alpha limited. The topline for FY21 observed growth of 21.1% on a YoY basis, with crude oil being the key growth contributor at PKR 1.2bln converging towards gross revenue of PKR 1.5bln. Stability in margins of ZPCL have been observed as the Company progressed towards expansionary operations, along-with exchange rate variations in favour of the Company.
In addition, the recent discoveries of Mehar-4 and Sofiya-3 in Mehar concession is expected to further enhance the Company’s production and operational capacity. Expansion in production volumes shall be supported through an in-house financing and debt capital mix. Low leveraging is observed on the balance sheet, however, capital investments can instigate a change in the Company’s leveraging structure. The equity base stands at PKR 5.8bln as of Jun-21. Improvement in the working capital structure remains imperative.
The ratings remain dependent on the relative positioning of the company in oil and gas industry, while sustaining the topline profitability and low leveraged capital structure. Volatility in operating margins remain key area of consideration. Financial discipline is considered core to the ratings, with enduring emphasis on maintaining relevant coverages.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com