Like 1QFY13, production glitches smeared the second quarter of FY13 for the countrys third largest exploration and production company, resulting in a dreary picturing for the first six months of FY13.
After posting dismal 1QFY13 production statistics; 2QFY13 did not come through any better for the Company. Largely, Pakistan Oilfields Limited (POL) has been facing subdued oil and gas production flows since the beginning of FY13 from the Companys own operating fields like Pariwali, Pindori, Domial and Meyal.
Despite the support from Tal block, a drop in both the oil and gas production flows scarred the top line during 1HFY13, which was five percent below what it was in 1HFY12. Also, the average prices of Arab light crude oil during 1QFY13 remained flattish at around 109 dollars per barrel with no significant rise in the gas well head price of Tal block.
The gross profit of the E&P Company turned red as sales revenue could not absorb the entire cost of production. The bottom line contracted by eight percent year-on-year during the first half of FY13 on account of not just the production flows, but also very high exploration expenses and lower other income.
The dividend income and depreciation of rupee were hoped to save the profits from falling. However, the depreciation of around nine percent and lower other income together could not provide the wanted cushion. Exploration expenditure increased more than five times on account of higher seismic activity and no dry wells declared.
Despite the production hiccups and higher expenses, the hope for the rest of FY13 for Pakistan Oilfields Limited lies in the flows from Makori East which will revitalise production. And with international oil prices rising once again, sales revenue has greater chances for an up tick in coming months.
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Pakistan Oilfields Limited
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Rs (mn) 1HFY13 1HFY12 chg 2QFY13 2QFY12 chg
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Net sales 13,744 14,522 -5% 7,098 7,194 -1%
Gross profit 7,948 8,968 -11% 4,108 4,065 1%
Exploration cost 719 132 445% 518 58 795%
Other op. income 1,363 1,560 -13% 970 1,130 -14%
PAT 5,663 6,169 -8% 3,098 2,714 14%
Gross margin 58% 62% 58% 57%
Net margin 41% 42% 44% 38%
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Source: KSE Announcement
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