1HFY17 was a period of turnaround in volumes and prices for the oil and gas exploration and production companies in the country, and now with the first 9MFY17 E&P result announced yesterday, its seems that the streak of positivity is likely to continue for FY17. The key underlying factor in the improvement of hydrocarbon flows by the E&P companies has been the rebound in oil prices, and Pakistan Oilfields Limited (PSX: POL) has been the first to show the improvement in 9MFY17.
The E&P giant announced its financial performance for the first nine months of FY17 yesterday at the bourse with top line up by 10 percent year-on-year, and bottom line up by 28 percent year-on-year.
E&P companies have seen their top line receded in FY15 and FY16 on account of lower crude oil prices as well as low production. Domestic crude oil production was down 8.5 percent year-on-year, whereas domestic natural gas production remained almost flat. POL‘s production in FY16 was down by around three percent along with decline in crude oil prices. However, in 9MFY17, the increase in top line came from better hydrocarbon flows. While 9MFY17 data isn’t available yet, 1HFY17 witnessed increase in crude oil and LPG production by 7.6 percent and 11.89 percent year-on-year, respectively.
Apart from better volumetric and price growth, the firm’s bottom line benefited from lower amortization and operating costs. However, higher exploration and production expenses in 3QFY17 offset some gains.
Overall, FY17 better has prospects for the firm as oil prices take a U-turn. Firm specific triggers for POL include primarily the anticipation of additional production from TAL block.
Comments
Comments are closed for this article.