Cumulative earnings of the Exploration & Production (E&P) companies (OGDC, PPL & POL) witnessed a decline by 25% to Rs 75.31 billion during 1HFY15 as against Rs 100.63 billion same period last year. Host of factor responsible for decline in earnings remain 1) lower oil prices which plunge by 17% YoY on average, 2) slight reduction in well head gas prices, 3) hike in exploration cost on account of dry well, 4) impairment of assets and 5) decline in other income by 12% YoY due to lower return from investments & lower exchange gain relatively.
Revenue down despite higher oil production
Sales revenue of three listed companies decline by 4% YoY to Rs 194.37 billion from Rs 202.48 billion over the same period last year mainly due to plunge in oil prices by 17% YoY to $88/barrel versus $106.50/barrel in 1HFY14. However higher oil and gas production restricts from big decline. Cumulative oil production increase by 9% to 62.7kbpd as against 57.6kbpd same period last year mainly due to higher production from Nim, Nashpa, Rajian and Lashari fields. However, gas production marginally increases by 0.4% to 2.01bcfd owing to increase in production form Uch, Naspha, Maru-Reti whereas natural decline of Sui and Qadirpur field restricts gas growth.