Pakistan Petroleum profit soars 70% to Rs16.6 billion

Half year results break market expectations


Express January 24, 2011

KARACHI: Pakistan Petroleum Limited’s (PPL) profit jumped 70 per cent to Rs16.6 billion in the first half of fiscal 2010-11 mainly due to higher wellhead prices and improved oil and gas production.

The company also declared an interim cash dividend of Rs5 per share, according to a notice sent to the Karachi Stock Exchange on Monday.

The results beat market expectations by 2.4 per cent as analysts had estimated a net profit of Rs16.2 billion. A lower effective tax rate of 23 per cent for the quarter ended December 31 compared with the previous 33 per cent is a major factor behind the better-than-expected earnings, commented IGI Securities analyst Umair Siddique.

Production on the rise

The company’s average oil production soared 55 per cent to 6,500 barrels per day on a yearly basis while gas production also went up by four per cent to 970 million cubic feet per day (mmcfd).

Higher oil flows from Hala and Manzalai fields contributed to the growth in oil production. Decline in key gas assets – Sui by three per cent and Adhi by 9.3 per cent – was offset by increased production from Kandhkot (2.8 per cent), Manzalai (106 per cent) and Sawan (10 per cent).

Revenue up 47 per cent

PPL’s net revenue rose 47 per cent to Rs37 billion on the back of higher wellhead gas prices. Wellhead gas prices of Sui, Kandhkot, Sawan and Miano fields is set to register an increase of 26 to 32 per cent, according to BMA Capital.

PPL’s other income improved to Rs1.9 billion from Rs1.3 billion on higher cash balances.

Field expenses rose 29 per cent to Rs9.98 billion from Rs7.72 billion a year ago on the back of accelerated exploration activities.

Published in The Express Tribune, January 25th, 2011.

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