While production volumes were down for Oil and Gas Development Company Limited (PSX: OGDCL) in FY18 on a year-on-year basis, gas volumes depicted an up tick in 1QFY19. The company’s overall production stood at 4 percent higher, year-on-year. Despite natural decline in mature fields, OGDCL’s average daily net gas production portrayed an increase of 6 percent in comparison to the preceding period, which came primarily from high gas production from Uch-II, KPD-TAY and Sinjhoro fields coupled with start-up of production at Chutto field, as highlighted by the company accounts.
Similarly, the company witnessed a huge 31 percent surge in LPG production coming from the new Nashpa field along with increase in production from existing fields. On the other hand, OGDCL’s average daily net crude production in 1QFY19 fell by 4 percent, year-on-year largely on account of natural decline at key fields.
Along with increase in gas volumes, higher crude oil prices and depreciating rupee contributed significantly to higher sales revenue for 1QFY19. Where the top-line was up by 41 percent, year-on-year, the average net realized price of crude oil and natural gas sold were up by 42 percent and 13 percent, year-on-year, respectively.
Higher top-line along with higher other income increased the bottom-line for OGDC by 57 percent, year-on-year. Increase in other income came from exchange gains from rupee depreciation. The company’s earnings were slightly affected by increase in operating expenditures mainly on account of joint operations expenses coupled with higher cost of dry and abandoned wells in the quarter, which can be seen in higher exploration and prospecting expenses. Nonetheless, the company made 2 oil and gas discoveries in KPK province. In 1QFY19, the Board of Directors also announced interim cash dividend of Rs2.75 per share.
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