Islamabad, February 22, 2019 FOR IMMEDIATE RELEASE Annex - III OGDCL Un-Audited Financial Results for the Half Year Ended 31 December 2018 Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announces its financial results for the Half Year ended December 2018. Financial Statements have been prepared in accordance with International Financial Reporting Standards. Highlights of the Half Year include: OGDCL s net sales registered Rs 126.898 billion compared to Rs 95.960 billion in the corresponding period last year Net profit before taxation registered Rs 84.739 billion compared to Rs 52.029 billion in the corresponding period last year Net Profit after Taxation came to Rs 56.756 billion as against Rs 36.672 billion in the preceding period translating into Earnings per Share of Rs 13.20 The Board of Directors declared second interim cash dividend of Rs 3 per share Both the operating profit margin and net profit margin were 56% & 45%, respectively. Average net realized price of crude oil sold was US$ 62.22/ bbl as against US$ 48.69/ bbl during corresponding period last year Average net realized price for natural gas sold was Rs 317.33/Mcf as against Rs 253.83/Mcf during corresponding period last year 584 Line Kms of 2D and 394 Sq. Kms of 3D seismic acquisition completed Six (6) new wells including three (3) exploratory/appraisal wells and three (3) development wells were spud during the half year ended December 31, 2018. Company s exploratory efforts yielded two (2) new oil and gas discoveries, namely Chanda-1 and Mela-5. Net crude oil production of 40,846 barrels per day, net gas production of 990 MMcf per day and net LPG production of 798 Metric Tons per day was witnessed during the period under review. 1
MD & CEO s Statement Mr. Zahid Mir, MD/CEO OGDCL, commenting on the financial results of OGDCL s first half FY2018-19, said: I am pleased to report another period of improved performance and successful results for the Company. This is evident from the fact that the Company registered Sales Revenue and Profit before Tax of Rs 126.898 billion (1H 2017-18: Rs 95.960 billion) and Rs 84.739 billion (1H 2017-18: Rs 52.029 billion) showing an impressive growth of 32% and 63%, respectively. The Company recorded Profit after Tax of Rs 56.756 billion (1H 2017-18: Rs 36.672 billion) which translated into Earnings per Share of Rs 13.20. Furthermore, OGDCL s exploratory efforts to locate new hydrocarbon reserves yielded two (2) oil and gas discoveries during the period under review, namely Chanda-1 and Mela-5, both in district Kohat, KPK province. In line with its exploration-led growth strategy to enhance production, I am pleased to inform that the Company during the six months period contributed around 46% and 29% of the Country s total oil and natural gas production, respectively. OGDCL, on gross basis, produced 19.4 MMBOEs (1H 2017-18: 19.0 MMBOEs) showing a 2% increase in production during the period under review. Last but not the least, I must acknowledge and thank Company s dedicated work force without whom it will not be possible to achieve the challenging goals that the Company has set for itself. I truly believe that OGDCL is all set on a path of steady growth and continuous progress which bodes well for our future and for all our stakeholders. 2
For further information: Investor Relations Contacts: Usman M. Bajwa Investor Relations Officer Telephone: +92 51 924 4102 Fax: +92 51 924 4104 Email: usman_bajwa@ogdcl.com Notes to Editors OGDCL, the largest petroleum Exploration and Production (E&P) Company in Pakistan, is a listed Company on Pakistan Stock Exchange and its Global Depository Shares (GDS) were issued on London Stock Exchange in December 2006. It holds the largest portfolio of recoverable hydrocarbon reserves of Pakistan, at 32% of gas and 55% of oil, respectively, as at June 30, 2018. It contributed 29% of the country s total natural gas production and 46% of its total oil production from July 2018 to December 2018. With a portfolio of 46 exploration licences, the Company has the largest exploration acreage in Pakistan, covering 26% of the total awarded acreage as of December 31, 2018. Currently, all production volumes are being realized from onshore areas of Pakistan, however, the Company also has working interests in Pakistan s offshore exploration blocks. OGDCL had a net Profit after Tax of Rs 78.736 billion for the year ended June 30, 2018. 3
SUMMARY RESULTS Financial Results OGDCL continues to deliver robust financial results for the half year ended 31 December 2018 as its Sales Revenue and Profit before Tax climbed to Rs 126.898 billion (1H 2017-18: Rs 95.960 billion) and Rs 84.739 billion (1H 2017-18: Rs 52.029 billion) showing growth of 32% and 63% respectively. These financials are primarily supported by increase in average basket price of crude oil which during the six months stood at US$ 72.34/barrel against US$ 54.29/barrel in the comparative period leading to higher average realized price of US$ 62.22/barrel against US$ 48.69/barrel in the relative period. In addition to the above, OGDCL recorded increase in the realized price for gas and LPG averaging Rs 317.33/Mcf and Rs 69,295/ton compared with Rs 253.83/Mcf and Rs 53,591/ton, respectively in the comparative period. Moreover, financial results were leveraged by higher LPG production and rise in average exchange rate to Rs 129.92/US$ from Rs 106.08/US$ in the comparative period accompanied with increase in interest income and share of profit in associate. Furthermore, decline in exploration & prospecting expenditures and G&A expenses also contributed towards improved financial performance. During the period under review, OGDCL s profitability was partially impacted by increase in operating expenses mainly on account of workover charges and amortization of D&P assets combined with higher taxation for the current period. Nonetheless, the Company recorded Profit after Tax of Rs 56.756 billion (1H 2017-18: Rs 36.672 billion) translating into Earnings per Share of Rs 13.20 (1H 2017-18: Rs 8.53). Dividend The Board has announced second interim cash dividend of Rs 3 per share (30%) for the year ending 30 June 2019. This is in addition to the first interim cash dividend of Rs 2.75 per share (27.5%) already declared during this fiscal year. Exploration and Development Activities Being the market leader in E&P sector of Pakistan, OGDCL possesses the largest exploration acreage which as of 31 December 2018 stood at 82,835 sq. kms representing 26% of the Country s total area under exploration. Its current exploration portfolio comprises 4
forty six (46) owned and operated JV exploration licenses in addition to holding working interest in five (5) exploration blocks operated by other E&P companies. In line with its exploration-led growth strategy to replenish reserves and enhance production, OGDCL during the period acquired 584 Line kms of 2D (1H 2017-18: 690 Line kms) and 394 sq. kms of 3D (1H 2017-18: 305 sq. kms) seismic data. Aforementioned, 2D and 3D seismic data acquisition represents 50% and 52% of total seismic data acquired in the Country, respectively. Moreover, 4,109 Line kms of 2D seismic data has been processed/reprocessed using in-house resources. In addition to the above, OGDCL during the reporting period spud six (6) wells comprising three (3) exploratory wells namely Siab-1, Qadirpur Deep X-1 and Garhi X-2 and three (3) development wells namely Qadirpur-60, Pasakhi NE-2 and Chanda-5. Furthermore, drilling and testing of five (5) wells pertaining to previous fiscal year have also been completed. Discoveries OGDCL s exploratory efforts to locate new hydrocarbon reserves during the period under review yielded two (2) oil and gas discoveries namely Chanda-1 and Mela-5 in district Kohat, KPK province. Expected cumulative daily production potential is 795 barrels of oil and 2.45 MMcf of gas. Preliminary reserves estimate is 89.80 billion cubic feet of gas and 9.33 million barrels of oil; combined 25.62 MMBOE. Development Projects During the reporting period development work continued on Nashpa compression project whereby technical and financial evaluation for hiring of EPCC contractor through press tendering has been completed and project is expected to be completed in March 2020. Under Dhok Hussain development project, installation work with respect to gas processing facilities has been completed and supply of gas will be started after laying of gas pipeline by SNGPL. Likewise, up-gradation of plant facilities at Mela field and laying of gas pipeline to Nashpa plant for LPG and NGL extraction are underway and Mela development project is anticipated to be completed in June 2019. 5
Production OGDCL being the national flagship of the Country s E&P sector is making all out efforts to maintain and enhance energy security of Pakistan. In this respect, the Company during six months period contributed around 46% and 29% of the Country s total oil and natural gas production, respectively. Moreover, seven (7) new operated wells; Khirun-1, Nandpur-1, Kunnar-12, Qadirpur-59, Nim-1, Loti-5 and Pasakhi NE-2 were injected in the production gathering system which cumulatively yielded gross crude oil and gas production of 116,417 barrels and 2,251 MMcf respectively. During the period under review, OGDCL on gross basis produced 19.4 MMBOEs (1H 2017-18: 19.0 MMBOEs) showing an increase of 2%. Despite natural decline and short lifting of crude oil by refineries at Kunnar, KPD-TAY, Nashpa and TOC fields owing to pile-up of furnace oil stock, Company s average net saleable crude oil production remained stable at 40,846 barrels per day owing to increase in production from Pasakhi, Chanda, Mela and nonoperated joint venture (NJV) fields coupled with start-up of production at Chutto-1. However, average net saleable gas production in comparison to the corresponding period last year is slightly lower by 2% primarily on account of natural decline and less gas intake at Uch-I field due to extended ATA of UPL-I with effect from 16 October 2018 to 8 December 2018. Moreover, tripping of turbines at LPL, Engro Power and FKPCL along with decline in NJV production impacted gas output. Regarding LPG production, OGDCL witnessed 24% surge mainly due to production commencement from Nashpa field in conjunction with increase in production from Sinjhoro and KPD fields. Average daily net saleable production including share in NJV fields during the period under review is as follows: Products Unit of Measurement 1H 2018-19 1H 2017-18 Crude oil Barrels per day 40,846 41,310 Gas MMcf per day 990 1,009 LPG Tons per day 798 642 Sulphur Tons per day 61 52 BOEs MMBOE 19.4 19.0 6