$234m is the net profit the company reported in 2014, 50% more than the previous year. STOCK IMAGE
On the back of better price and aggressive drilling, United Energy Pakistan (UEP) has ramped up petroleum production to 59,737 barrels of oil equivalent a day (boed) in the first quarter 2015, a 65% rise over the same period of last year, said the company on Monday.
This is a significant boost even over the average production of 47,091 boed for the entire 2014 and adds to the already handsome gains the company has been recording in its net profit for the past five years.
UEP is owned by Hong-Kong based United Energy Group (UEG), which had bought the gas fields of British Petroleum in 2010 for $775 million – at the time considered to be an ‘outrageous’ offer.
“Well, now we know why Chinese investors bought overpriced assets of BP. They had actually incorporated the cost of excellent human resource that petroleum giant was leaving behind in Pakistan,” said a senior official of a state-run petroleum company.
UEP operates the Mirpurkhas Khipro (MKK) and Badin leases in Sindh. Most of the first quarter rise in production came from MKK block, the company said in a stock filing in Hong Kong where it is listed.
It also announced making eight oil and gas discoveries with the highest initial output of 3,880 boed coming from Rajani-2 well in the MKK lease
UEG also has other investments like an oilfield support services business but it drives almost the entire revenue from Pakistani assets.
In 2014, the company reported a net profit of around $234 million, 50% more than the previous year. UEG has already recovered the investment it made to acquire BP’s Pakistani fields.
Last year, the government had revised the average price for gas coming out of the fields in MKK to $5.03 per Mcf from $3.98.
Around 31% of UEG revenue comes from oil, the company also started exporting oil and condensate with 2014 seeing shipments of 1.56 million boe.
As of December 31, 2014, it had proven oil and gas reserves of approximately 84.1 million boed.
Its average production was 33,809 boed in 2013, UEP also has offshore blocks.
Published in The Express Tribune, May 19th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ