KARACHI: Oil and Gas Development Company’s (OGDC) profit rose 16% to Rs17 billion in the quarter ended September 2017 primarily due to higher sales and lower exploration and prospecting cost.
The oil and gas exploration and production company had registered a profit of Rs14.63 billion in the same quarter of previous year, according to the profit and loss account of OGDC sent to the Pakistan Stock Exchange (PSX).
Earnings per share of the company rose to Rs3.95 from Rs3.40. It also declared its first interim cash dividend at Rs1.75 per share. The entitlement will be paid to the shareholders whose names will appear in the register of members on December 12, 2017.
OGDC’s stock price dropped 0.93%, or Rs1.40, to Rs149.11 with a volume of 774,600 shares at the PSX on Thursday.
Net sales increased 11% to Rs43.96 billion in Jul-Sep 2017 from Rs39.56 billion in the same quarter of last year. The surge came in the wake of “17% increase in Arab Light oil prices year-on-year and 5% growth in oil production”, Topline Securities said in post-result comments. Despite the growth in oil output, the overall hydrocarbon production of the company stayed almost flat following 1.6% decline in gas production.
During the quarter under review, oil volumes settled at an average of 43,000 barrels per day (bpd), up 2,000 bpd or 5% year-on-year “thanks to additional flows from Kunnar Pasakhi Deep (KPD) and Nashpa fields which cumulatively added about 4,700 bpd”.
Gas production eased 38 million cubic feet per day (mmcfd), or 1.6%, to settle at an average of 1,086 mmcfd in the Jul-Sep 2017 quarter. This was mainly because of lower production from the Qadirpur field, which accounts for 22% of OGDC’s gas production, down 8% and the Uch field, which comprised 28% of OGDC’s total gas production, down 5%, the brokerage house added.
Exploration and prospecting expenditure fell significantly by 88% to Rs1.52 billion from Rs4.32 billion in the previous year. The brokerage house added “exploration charges were down as these expenses were significantly higher last year owing to the cost of two dry wells and higher expenditure on seismic data acquisition.”
Finance cost stood almost flat at Rs418.43 million in the Jul-Sep quarter. Income from other than core business dropped 39% to Rs3.11 billion from Rs5.06 billion.
“This was due to maturity of the Pakistan Investment Bonds (PIBs) worth Rs53.4 billion on July 19, 2017, which carried interest rate of 11.5% and were issued on July 19, 2012,” it said. Share of profit in associates (net of taxation) came down to Rs457 million from Rs553 million. “We flag long-term volatility in international oil prices, delay in key projects, significant exploration and development cost and unexpected field shutdown as key risks for OGDC,” Topline said.
Published in The Express Tribune, October 27th, 2017.
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Source: Tribune News | Corporate result: Higher sales, lower cost take OGDC’s profit to Rs17 billion