KARACHI: Pakistan Petroleum Limited (PPL) has planned to spud 20 wells during fiscal year 2019/2020 out of which half of wells are exploratory and remaining are developmental.
The management of PPL recent held a Corporate Briefing to discuss FY19’s financial performance and future outlook, analysts at Arif Habib Limited said on Tuesday.
In Adhi field, first Nodal compressor is being commissioned and is expected to come online in 2HFY20.
Due to structural problems at Dhok Sultan, the company had to side track which led to delay in production. The production has commenced from this well of 550 bopd and 0.7 mmcfd.
The company plans to drill more from this well and expects higher production.
The company expects gas production from Benari to commence in July 2020.
The company has commenced oil production from Adhi South between 700-800 bopd.
For Bolan, Mining and Zinc Project a Mineral Deposit Retention License has been has been issued by authorities. Application for Mineral License and EPCC contract is on the cards.
Other than this, the company is also embarking upon other mineral mining projects since the company has expertise in mining business.
Aiming for big discoveries, the company is concentrating on frontier areas, where three wells were spud.
To recall, the company posted a profit after tax of Rs61,632 million (EPS: Rs27.18) in FY19 against Rs45,688 million (EPS: Rs20.15) in FY18, up by 35 percent YoY.
As of Jun 30, 2019, the company’s portfolio consists of 18 producing fields (7 from operated and 11 from partner operated) and 47 exploratory blocks (28 from operated and 19 from partner operated).
Operated exploratory blocks include Block-8 in Iraq. While partner operated blocks consist of 3 offshore blocks in Pakistan and one onshore block in Yemen.
During FY19, the company witnessed discoveries of 11 exploratory wells.
PPL became the first Pakistani E&P Company to drill a well outside the country, spudding Madain-1, Block-8 in Iraq in FY19.
The company won 2 exploratory blocks in bid round in 2018 (Musakhel & Sorah). In July 2019, the company was provisionally granted Punjab Block.
Furthermore, Pezu Block operated by OGDC was farm-in by the company. Keeping view of risks and higher costs, the company farmed-out Bela West partially.
In Gambat South, GPF-IV plant phase I was successfully completed which started producing 25mmcfd of gas. At present, phase II of GPF-IV plant is being commissioned, which upon completion in a few months’ time will increase production to 45 mmcfd.
The company in FY19 witnessed record mining of 228,000 baryte. The company sees mining business of the company a stepping stone for diversification.
In order to deal with natural decline, the company undertook drilling of 7 developmental wells in its operated areas during FY19.
In FY19, the company produced 16,077 bop of oil and 870 mmcfd of gas. In oil production, major contribution came from TAL block contributing 37 percent, followed by Nashpa Block 35 percent and Adhi 22 percent.
In gas production, Sui was the major contributor adding 44 percent to total gas production, tagged with 24 percent from Kandhkot and 23 percent from partner operated and others.
The company has been hit hard by the mounting circular debt. Due to this, company’s future plans for development and dividend were affected.
In FY19, company’s trade debt reached a historic high level of PKR 227 billion. accordingly, the company anticipates preferential allocation of funds from the government for settlement of this issue.
For FY20, the company is targeting production of around 1 BCFDe.