During the first three months of FY06 (July-September 2005), cumulative earnings of the three listed E&P companies, grew by 30 percent, reached Rs 13.1 billion versus Rs 10.1 billion during the same period last year.
The group reported higher earnings primarily ensued from 36 percent growth in the top line with combined net sales recorded at Rs 30.5 billion in 1QFY06.
Higher global oil prices, increased oil and gas production and gradual increase in Sui and Kandhkot fields' wellhead prices under 2002 GPA were the main propellers of top-line growth. The earning before taxation (EBT) of the sector showed an increase of 38 percent to Rs 19.5 billion during the period under review.
OGDCL's 1QFY06 net income at Rs 9 billion depicted 21 percent increase over the corresponding quarter profits of Rs 7.5 billion. This translates into EPS of Rs 2.10 for 1QFY06 versus Rs 1.74 previously. The company announced an interim cash dividend of Rs 1.25 per share in 1QFY06.
Net sales during 1QFY06 were recorded at Rs 20 billion, higher by Rs 4.8 billion or 31 percent in comparison with net sales of the corresponding quarter. This mammoth growth in sales revenue mainly derived from the occurrence of higher international oil prices coupled with the volumetric growth witnessed in company's oil and gas production.
Average net realised price of crude oil was $49 per barrel in 1QFY06 as against $33.4 per barrel previously. Average daily production of crude oil and gas during 1QFY06 was higher by 7 percent each to 37,418 barrels and 833 mmcf, respectively. The oil production increase was due to additional production from Chanda & Bobi and also enhanced production from Dakhni, Pasakhi and Sono fields. The increase in gas production was due to optimum production from Qadirpur field.
POL was the star performer amongst the three E&P companies with over 100 percent growth in profitability. In specific terms, POL's earnings during 1QFY06 showed an increase of 118 percent from Rs 660 million (EPS Rs 5.02) in 1QFY05 to Rs 1.4 billion (EPS Rs 10.96) in 1QFY06. The growth in earnings primarily comes from topline growth as company's net sales increased by 94 percent to Rs 3.5 billion during 1QFY06.
In this regard, a respective 43 percent and 73 percent increase in POL's crude oil and gas production coupled with better oil, gas and LPG prices were primary factors behind this growth.
Additional supply from Pariwali-5 well and Manzalai enable the company to increase its oil and gas production during 1QFY06. Due to its highest exposure to oil amongst the three E&P companies, POL was the greatest beneficiary of higher international oil prices in 1QFY06.
PPL posted a net income of Rs 2.7 billion (EPS Rs3.9) in 1QFY06 - a growth of 34 percent over 1QFY05 earnings. Net sales were 31 percent higher on the back of higher production and increased product prices.
Company's two major fields Sui and Khandkot operates under GPA 2002 which allows wellhead gas prices to increase to 50 percent of applicable prices for other fields' wellhead price by January 2007. During 1QFY06, PPL's gas production was 3.3 percent higher.