OGDC gallops on high prices and production
The countrys largest E&P Company-OGDC posted praiseworthy financial performance contrary to the bleak situation of the energy sector of the country. The earnings have improved by more than 55 percent for 3QFY12 over the same period of last year, while for the longer period 9MFY12 the earnings augmented by more than 40 percent versus 9MFY11.
Total revenue of Oil and Gas Development Company improved at a robust growth rate particularly during 3QFY12 as sales spurred to Rs.53.36 billion by 30 percent YoY and 21 percent QoQ.
The top line build up was based on the overall higher realised prices as well as production from Kunnar Pasakhi and Nashpa during the quarter ending March 31, FY12.
The analysts at Global Securities estimate Companys gas production during 3QFY12 to have treaded up by 5 percent QoQ and 4 percent YoY, while oil production during the aforementioned period climbed by approximately 4 percent QoQ and remained stagnant on YoY basis.
According to Global Securities, realised prices for oil during 3QFY12 have soared by 16 percent QoQ and 36 percent YoY to reach $92 per barrel. On the other hand, the gas prices edged up by approximately 10 percent on both QoQ and YoY basis to Rs.275 per mcf. These higher realised prices especially that of oil, stemmed from the escalated crude prices and Rupee attrition.
Besides top line, the bottom line received a major thrust from the cash rich position of the Company. Other income surged by more than three folds during 9MFY12 to Rs.6.78 billion versus Rs.1.5 billion for 9MFY11. As an upshot, net margins registered impressive improvement.
On the expense side, the exploration and prospecting expenditure took a dip of 38 percent during 9MFY12 versus corresponding period of last year much due to muted E&P activity during 1HFY12. However, 3QFY12 experienced a healthy production and development activity where the exploration and prospecting charges inflated by 21 percent.
The Company announced the third interim cash dividend of Rs.1.5 per share in addition to the already paid interim cash dividend of Rs.3 per share making the total cash dividend Rs.4.5 per share or 45 percent.
That said, the unfavorable situation in some of the Companys operating areas and the lingering circular debt has kept OGDCs receivables to edge up sequentially. For a timely discharge of responsibility and smooth running of the Companys E&P activity as well as the liquidity position calls for a hastened resolution of the spiralling inter-corporate debt.