All that investment in seismic surveys during the last two years and a record high $750 million capex plan for FY10 has finally started to pay dividends for OGDC. The country's largest energy E&P firm has had a great start so far this year, with the latest good news being the testing of the upper zone of the recently discovered Napsha-1 well and the discovery in the development well of Dakni.
The upper Lockhart zone was tested at 4200 bpd of oil and 17.1/mmcfd of gas - which takes OGDC's total oil production to 7,345 bpd, making it around one-tenth of Pakistan's current oil production. This is one of the largest discoveries ever in Pakistan and the largest in NWFP.
OGDC has a post-discovery stake of 56 percent in the field, with the second biggest stakeholder being PPL which has 26 percent. Although, the firm has yet to announce the recoverable reserves of the field, the heartening fact about this discovery is that its initial pressure and well flow indicators seem quite encouraging. If history is any guide, looking at recoverable reserves of larger fields such as Makori and Mela, it can be safely assumed that Napsha-1 recoverable reserves could touch 40 to 45 millions barrels of oil, given the strong early indicators.
Being a new field, it has a potential of an increased productivity going forward as new wells are drilled. If three new wells in the field are discovered as planned, it could add up to 13,000 bpd from this block alone - of course, provided the reserves are sufficient enough. The discovery, which will take around 9 to 12 months before optimal commercial production begins, is expected to boost the earnings by Rs 1/share.
OGDC's future lies with more discoveries and enhanced production - and the efforts taken in this regard make a good case for the firm's healthy future. Although, many wells in the fields spudded so far are yet to be tested, the firm is currently working on 7 to 8 fields across the country and more discoveries, albeit not this large, may just be around the corner.
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