KARACHI: Pakistan Oilfields Limited (POL) has found significant deposits of oil and gas in Punjab which are estimated to take up the company’s hydrocarbon production by about 25%.
“POL has made a significant oil and gas discovery in its Ikhlas block,” Company Secretary Khalid Nafees announced in a notification sent to the Pakistan Stock Exchange (PSX) on Wednesday.
Tests at exploration well Jhandial-1 in the block have shown a flow of 2,520 barrels of oil per day and 21 million standard cubic feet of gas per day (mmcfd).
POL holds 80% stake in the block and Attock Oil Company has the remaining stake. The well would be connected to the production line within two weeks and gradually it would reach its full potential, he said.
POL’s stock price improved 0.74%, or Rs3.91, to Rs525.78 with a volume of 1.92 million shares in an otherwise bearish trading session at the PSX.
“It (hydrocarbon discovery) will lift POL’s oil production by up to 26% and gas production by up to 23%,” said Topline Securities in its report.
Although the company is currently evaluating sustainable levels of oil and gas flow, “our channel checks suggest it will be 1,600-1,800 barrels per day of oil and 16-18 mmcfd of gas”, Topline said.
“At this level, we estimate annualised earnings per share impact of Rs7.5-8.5 (15-17% of FY18 earnings) with POL’s 80% holding in the Ikhlas block.”
Ikhlas block is located in northern Potwar, about 83 kilometres southwest of Islamabad in Attock district.
“The block is prospective but geologically it is a very complex area surrounded by a number of major oil discoveries,” the company secretary said in the notification.
Drilling of the deep exploratory well, Jhandial-1, was proposed after interpretation of recently acquired 3D seismic data. Hydrocarbons were encountered at a depth of 18,497 feet.
POL earned a consolidated profit of Rs11.90 billion (earnings per share Rs50.23) in the financial year ended June 30, 2017, which was 18% higher than Rs10.12 billion (earnings per share Rs42.65) in the previous year.
Published in The Express Tribune, October 5th, 2017.