AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 131.00 Increased By ▲ 1.47 (1.13%)
BOP 6.92 Increased By ▲ 0.24 (3.59%)
CNERGY 4.62 Decreased By ▼ -0.01 (-0.22%)
DCL 8.92 Decreased By ▼ -0.02 (-0.22%)
DFML 42.91 Increased By ▲ 1.22 (2.93%)
DGKC 84.25 Increased By ▲ 0.48 (0.57%)
FCCL 32.80 Increased By ▲ 0.03 (0.09%)
FFBL 78.00 Increased By ▲ 2.53 (3.35%)
FFL 12.20 Increased By ▲ 0.73 (6.36%)
HUBC 110.19 Decreased By ▼ -0.36 (-0.33%)
HUMNL 14.42 Decreased By ▼ -0.14 (-0.96%)
KEL 5.66 Increased By ▲ 0.27 (5.01%)
KOSM 8.39 Decreased By ▼ -0.01 (-0.12%)
MLCF 39.50 Decreased By ▼ -0.29 (-0.73%)
NBP 63.85 Increased By ▲ 3.56 (5.9%)
OGDC 201.50 Increased By ▲ 1.84 (0.92%)
PAEL 26.48 Decreased By ▼ -0.17 (-0.64%)
PIBTL 7.77 Increased By ▲ 0.11 (1.44%)
PPL 161.05 Increased By ▲ 3.13 (1.98%)
PRL 26.61 Decreased By ▼ -0.12 (-0.45%)
PTC 18.59 Increased By ▲ 0.13 (0.7%)
SEARL 82.80 Increased By ▲ 0.36 (0.44%)
TELE 8.20 Decreased By ▼ -0.11 (-1.32%)
TOMCL 34.37 Decreased By ▼ -0.14 (-0.41%)
TPLP 9.01 Decreased By ▼ -0.05 (-0.55%)
TREET 16.98 Decreased By ▼ -0.49 (-2.8%)
TRG 60.44 Decreased By ▼ -0.88 (-1.44%)
UNITY 27.61 Increased By ▲ 0.18 (0.66%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 10,722 Increased By 314.8 (3.03%)
BR30 32,041 Increased By 327.6 (1.03%)
KSE100 99,453 Increased By 2124.6 (2.18%)
KSE30 31,036 Increased By 843.8 (2.79%)

The exploration and production sectors performance in FY20 was scarred by a weak 4QFY20 where the impact of COVID-19 and the ensuing lockdown and restrictions curtailed demand for oil and gas in the country- as a result of which the exploration and drilling activity remained soft and production numbers muted. Also, the crude oil price contraction played a key role in reduced revenues for the E&P players. Expectations for 1QFY21 have been mixed; while the revival of activity was anticipated to bring growth to earrings sequentially for the sector, the year-on-year was still expected to be lower.

Pakistan Oilfields Limited (PSX: POL) recently announced its financial performance into 1QFY21, following what the market was expecting. Compared to 1QFY20, the E&P company’s profitability remained lower due to oil prices as well as weaker economic activity amid the ongoing global pandemic, whereas the quarter-on-quarter performance showed noticeable growth in revenues and earnings.

POL reported a nine percent decline in its topline due to weaker production volumes (two percent year-on-year decline each for oil and gas) and around 24 percent plunge in average realized oil prices. But on quarterly basis, POL’s revenues were up by 54 percent due to rebounding oil prices as well as an increase in production of oil and gas.

On the expense side, higher operational cost during 1QFY21 resulted in lower gross profits year-on-year. Exploration cost, however, saw a significant decline during the quarter year-on-year (80 percent) as well as quarter-on-quarter (70 percent) which supported the bottomline. The decline in exploration and prospecting expenditure came from absence of dry wells as well as slow exploration and drilling activity during the period under review. Decline in other income due to absence of exchange gains was offset by decline in finance cost.

Despite the decline in exploration expenses, the 1QFY21 earning were lower by 9 percent year-on-year particularly due to weaknesses from the top. However, the sequential growth in earnings of around 49 percent shows that the coming quarters might bring growth to the earnings.

Comments

Comments are closed.