Mari Petroleum Company Limited 1HFY15

The oil and gas Exploration and production sector has sagged to multi-year low crude oil prices. And the sector’s performance hinges directly on a rebound in the oil prices. The E&P players in the country have been affected similarly. All three major E&P firms (OGDC, PPL POL) have registered a decline in oil revenues due to oil prices.
However, the impact of the international crude oil prices seems negligible on the financial performance of Mari Petroleum Company Limited (MPCL) as it is a gas heavy company, and well-head gas prices are fixed for six months or a year. The gas is the largest source of revenue for the company representing a 97-98 percent share in its gross sales. As a result, a growth of around 29 percent year-on-year can be seen in the firm’s revenues.
MPCL’s profits from operation also witnessed a 40 percent-year-on-year, rise with operating margins improving from 39 percent in 1HFY14 to 42.6 percent in 1HFY15. This was partially due to lower prospecting and exploration expenditure in 1HFY15 and 2QFY15.
E&P firm’s bottom line was accentuated by 58 percent year-on-year in 1HFY15, while the growth in 2QFY15 alone was almost ten times that of 2QFY14. Along with growth in earnings, the firm has been active on the drilling front as well. During FY14, MPCL discovered Ghauri X-1 well in Punjab, which is the first hydrocarbons discovery in Ghauri Block in the Potowar Plateau after years of disappointments.

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Rs (mn)                    1HFY15    1HFY14     YoY    2QFY15    2QFY14      YoY

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Net Sales                   8,842     6,844     29%     4,451     3,021      47%

Royalty                     1,169       890     31%       598       395      52%

Operating Expenditure       2,783     1,779     56%     1,559       906      72%

Exploration and

Prospecting Expenditure     1,105     1,500    -26%       673       990     -32%

Other charges                 215       185     16%        51        31      66%

Other operating income        198       179     11%        86        11     706%

Operating Profit            3,770     2,669     41%     1,655       710     133%

Finance income                335       330      2%       122       160     -24%

Finance Cost                1,185       583    103%     1,082       547      98%

PAT                         2,619     1,661     58%       813        84     873%

EPS (Rs/share)              23.76     15.07     58%      7.38      0.76     871%

Operating margin           42.63%    39.00%            37.18%    23.50%

Net margin                 29.62%    24.27%            18.28%     2.77%

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