Islamabad: Pakistan Oil Fields (POL) held its analyst briefing today to update investors on the FY24 financial results and discuss future plans. The company reported an all-time high Net Profit After Tax (NPAT) of PkR39.2 billion, translating to an Earnings Per Share (EPS) of PkR137.9, marking a 7% year-on-year increase. However, the year saw a 5% decline in crude oil and natural gas production, with outputs of 4,740 barrels per day and 62 million cubic feet per day, respectively.
According to AKD Securities Limited, a key highlight of the briefing was the drilling of Jhandial-3 in October 2023, where POL holds an 80% stake. The well is currently yielding over 700 barrels per day of oil and 7 million cubic feet per day of gas. Additionally, a fourth well is under evaluation, which could lead to a reassessment of the field's reserves. Another significant development is the Razgir well, in which POL has a 27.76% stake, operated by MOL. The pipeline installation is underway, and production is expected to start by April 2025.
The management addressed the ongoing legal proceedings related to the windfall levy on enhanced gas pricing in the Tal Block. The case, involving Sui Northern Gas Pipelines Limited (SNGPL), is currently in the high court, with a hearing anticipated this month. Security measures in the northern fields have been enhanced, with the presence of Frontier Corps (FC) ensuring safety in the area.
Over the past year, POL invested PkR12 billion in development and exploration activities, with PkR7 billion allocated to a dry well in the Balkassar block. Looking ahead to FY25, the company plans to drill exploratory wells in the Tal Block and Jhandial, and conduct seismic surveys in the Pindori field. The firm aims to capitalize on lower tax rates through strategic cash investments in funds, especially in foreign currency. This follows a dividend payout, which resulted in a 50% reduction in rupee-based investments.
The company also highlighted challenges within the SNGPL network, citing difficulty in pinpointing exact causes due to various factors and seasonal changes. Despite these issues, SNGPL is meeting 100% of the company's invoices. POL is actively engaging in bidding rounds and has recently acquired interests in several exploration blocks, including Chahbali, Nareli, Surana West, and Multanai. The target price for POL by June 2025 is set at PkR600 per share, with a dividend yield of 15.5% projected for FY25.