In our today’s morning report we would discuss the performance of E&P sector during the 9MFY15 as we have taken three liquid listed companies in consideration which constitutes 95% of the market capitalization of the sector.
Bottom-line shrinks 24% YoY in 9MFY15
Overall profitability of the Exploration & Production (E&P) companies witnessed a decline by 24.3% to Rs 105.32 billion during 9MFY15 against Rs 139.12 billion same period last year. This is primarily due to lower oil prices which plunge by 22% YoY on average, decline in well head gas prices, surge in exploration cost owing to dry well, impairment of assets and drop in other income.
QoQ earnings rise by 3%
Some respite were seen in 3QFY15 on QoQ basis, as earnings surge by 3% QoQ to Rs 30.01 billion versus Rs 29.15 billion due to higher other income and lack of impairment of assets in 3QFY15. However higher operating expenses and lower crude oil prices restricts large increase in earnings growth.
Revenue fall by 12%
Top-line of three listed companies decrease by 12.4% YoY to Rs 267.68 billion from Rs 305.47 billion over the same period last year mainly due to plunge in oil prices by average 22% YoY to $75/barrel versus $106/barrel in 9MFY14. Cumulative oil production increase by 7% to 62.5kbpd as against 58.6kbpd same period last year mainly due to higher production from Nim, Nashpa, Rajian and Lashari fields. However, gas production decreases by 4% to 1.93bcfd owing to natural decline of Sui and Qadirpur field.

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Crude free-fall dents E&P earning