AGL 31.35 Increased By ▲ 0.15 (0.48%)
AIRLINK 143.00 Increased By ▲ 0.30 (0.21%)
BOP 5.12 Increased By ▲ 0.04 (0.79%)
CNERGY 4.11 Increased By ▲ 0.07 (1.73%)
DCL 9.49 Decreased By ▼ -0.21 (-2.16%)
DFML 49.51 Decreased By ▼ -0.69 (-1.37%)
DGKC 79.10 Decreased By ▼ -0.40 (-0.5%)
FCCL 22.75 Decreased By ▼ -0.30 (-1.3%)
FFBL 46.78 Increased By ▲ 0.68 (1.48%)
FFL 9.57 Increased By ▲ 0.52 (5.75%)
HUBC 153.49 Decreased By ▼ -0.01 (-0.01%)
HUMNL 11.29 Decreased By ▼ -0.18 (-1.57%)
KEL 4.17 Increased By ▲ 0.03 (0.72%)
KOSM 9.26 Decreased By ▼ -1.01 (-9.83%)
MLCF 33.30 Decreased By ▼ -0.30 (-0.89%)
NBP 58.70 Increased By ▲ 1.85 (3.25%)
OGDC 136.75 Decreased By ▼ -0.50 (-0.36%)
PAEL 25.88 Increased By ▲ 1.43 (5.85%)
PIBTL 6.05 Increased By ▲ 0.08 (1.34%)
PPL 112.35 Decreased By ▼ -0.65 (-0.58%)
PRL 24.38 Increased By ▲ 0.03 (0.12%)
PTC 11.88 Decreased By ▼ -0.07 (-0.59%)
SEARL 57.40 Decreased By ▼ -0.36 (-0.62%)
TELE 7.77 Increased By ▲ 0.17 (2.24%)
TOMCL 41.99 Increased By ▲ 0.11 (0.26%)
TPLP 8.49 Decreased By ▼ -0.16 (-1.85%)
TREET 15.23 Increased By ▲ 0.13 (0.86%)
TRG 51.50 Decreased By ▼ -0.95 (-1.81%)
UNITY 28.00 Increased By ▲ 0.14 (0.5%)
WTL 1.42 Increased By ▲ 0.08 (5.97%)
BR100 8,340 Decreased By -5.8 (-0.07%)
BR30 26,956 Increased By 47.9 (0.18%)
KSE100 78,898 Increased By 34.4 (0.04%)
KSE30 25,008 Decreased By -18.2 (-0.07%)

The profitability of the Oil and Gas Development Company Limited (PSX: OGDC) slipped by eight percent year-on-year during the recently announced 1QFY24 financial performance. The oil and gas exploration company were witnessed a decline in the bottomline primarily due to the inflationary pressures despite the growth incurred in the topline. OGDC’s revenues grew by 13 percent year-on-year on the back of higher gas prices and favorable exchange rates. These were partially offset by weaker oil prices during the quarter as well as weaker production of hydrocarbons. The average realized price of gas was up by gas prices were up by a 26 percent, while the average exchange rate recorded was Rs291.58 per USD in 1QFY24 versus Rs224.57 per USD in 1QFY23. The crude oil net realized prices were down by 17 percent year-on-year during the quarter. Oil and gas production was also lower during the quarter by around two and one percent year-on-year, respectively.

The growth in OGDC’s topline during 1QFY24 resulted in 3.7 percent growth in the gross profits; however, gross margins tumbled from 71 percent in 1QFY23 to 65 percent in 1QFY24 due to higher than proportionate increase in operating expense. The rise in operating expenses was due to higher rent, fee and taxes on renewal of leases combined with salaries, wages and benefits and amortization of development and production assets.

The company also witnessed a 70 percent rise in exploration and prospecting expenditure during the quarter. Higher E&P expense coupled with decline in finance and other income due to lower exchange gains during the period impacted the company’s earning for 1QFY24.

The E&P sector has been facing falling volumes due to the natural decline in the fields. Moreover, the torrential rains and floods also affected the production volumes during FY23. OGDC’s topline benefitted from higher gas prices, which would further support the financials in the coming quarters due to the recent increase announced. The company has set CAPEX of around $80-100 million for FY24, largely spurring from projects in pipeline. It is also currently preparing for rigs and contracts for its offshore Block-5 (Adnoc) where the commencement of drilling is expected by the beginning of FY26.

Comments

Comments are closed.