Oil & Gas Development Company (14112008)

The E&P giant holds the largest portfolio of recoverable hydrocarbon reserves of the country having 46 percent share in total recoverable oil and 34 percent share in recoverable gas. The company is also on the front foot from production point of view as it contribute 25 percent of total gas and more than 62 percent of total oil production of the country. Having 32 percent share in total acreage of exploration area of Pakistan, OGDC contribute critically to E&P activities in the country.
Exploration Activities & Drilling Targets
Company is maintaining aggressive exploration stance to achieve annual growth of 9-10% in both oil and gas for the next three years. The company had added two more exploration blocks last year, carrying the total numbers of exploration block to 44. Furthermore, the drilling target for FY09 is 32 wells with 20 more additional wells if the security situation allows the company. However, OGDC is not planning to drill any offshore well during the year but seismic survey will be conducted in FY09.
Healthy Dividend payouts
OGDC is one of the most attractive in the region from dividend payout perspective, currently maintaining dividend yield of 12.8 & 16 percent on FY09E and FY10E payouts respectively.
Production Enhancement
During the current year from the production enhancement projects, we expect company will able to inject 100mmscfd from Qadirpur plant and 250mmscfd, 3,200bpd of condensate from recently discovered fields Kunnar and Pasakhi Deep. Furthermore, production enhancement projects from Mela, Uch and Manzalai fields are also underway.
Revision in prices for Qadirpur gas expected
We expect during the first half of FY09, well head gas prices formula of Qadirpur will be resolve which will have annualized earning per share impact of Rs0.45. We expect price of the field will increase by 20 percent from current levels. Govt. is planning sell off 37 percent stake of Qadirpur gas field. If 37 percent of stake Qadirpur gas sold to private investor then our expected earning and target prices will decline by 7.4 and 5.9 percent respectively from FY10 onwards. However, from the sell off one time payout is also expected.