OGDCL has plans to increase its investments in both offshore and onshore exploration and drilling segments, saying that this capital expenditure program would range from $500 million in 2006-07, $750 in 2007-08 to $640 million in 2008-09, a company statement sent to Karachi Stock Exchange (KSE) said on Wednesday.
The Oil & Gas Development Company Limited (OGDCL) said that as a result of the development of existing fields and the management's positive view on new exploration opportunities, the company expects that its oil and gas production growth would accelerate in the medium term. Based on certain assumptions, the company currently expects to achieve a compound annual growth rate (CAGR) of 13 percent in overall net production by financial year 2008-09 and this capital expenditure programme has been announced to sustain this production.
Regarding Dividend Policy of the company it stated that Dividends paid should strike a balance between sufficient capital availability to enable the company achieve its long-term strategic objectives and providing shareholders with attractive return on investment in near term.
Before making any recommendation for dividends to be paid, the Board of Directors will take into account factors including, but not limited to, the future prospects of the company, future capital and operating expenditure plans of the company, the company's financial results, interests of all shareholders, the company's capital structure and debt ratings and the cost of raising funds from alternative sources.
To bring OGDCL in line with international best practices, it has commissioned a full independent audit of its reserve base by international reserve engineering consultants, DeGolyer & MacNaughton (D&M) for ease of comparison. OGDCL currently reports its reserves on a 'gross operated only' basis, which includes 100 percent of all reserves where the company has control and manages day-to-day operations. From next year, the company will also report on reserves that are 'net to OGDCL', which include deducting its partners' share in its operated fields and adding its share in the non-operated fields.
While Pakistani reserve accounting is fundamentally driven by technically recoverable reserves, D&M's approach is to measure reserves also from an "economic" perspective.
The company wishes to stress that these are methodological differences that have no bearing on its resources in the ground. The company will provide a further release to the market once the 2006 Pakistan Energy Year Book is released and DeGolyer and McNaughton has signed its final report.
Comments
Comments are closed.