Pakistan Oilfields finds new deposits of oil, gas in K-P

Production from well expected to start from February 2018

KARACHI: Pakistan Oilfields Limited (POL) announced on Tuesday the discovery of additional deposits of oil and gas in a developing well located in the province of Khyber-Pakhtunkhwa (K-P).

"As per information received from MOL, the operator of TAL Block, hydrocarbons have been encountered in a development well in Makori East-06, which has been drilled and is currently under testing phase," POL Company Secretary Syed Khalid Nafees said in a notification to the Pakistan Stock Exchange (PSX).

As a result of drill stem test (DST) conducted at the well to test the potential of Hungu and Lumshiwal formations, the well has tested 1,817 barrels per day of condensate [oil] and 4.63 MMscf (million standard cubic feet) of gas per day," he said.



Production from the well is expected to start from February 2018, he added, with the pre-commerciality working interest of POL being 25%.

POL's share price increased 1.14%, or Rs7.21, to Rs638.76 with a volume of 638,100 shares on Tuesday.

The share price-hike may partially be linked with an uptrend in oil prices at world markets amid ongoing political turbulence in Saudi Arabia.

IGI Securities said in a commentary that "gas production from the well will be priced under Petroleum Policy 2012 (PP12) as Tal block has been converted to PP12."



It added that Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company Limited (OGDC) hold 27.8% stake each, whereas MOL being the operator holds 8.4% in Tal Block.

PPL's share price surged 0.88%, or Rs1.73, to Rs199.09 with a volume of 1.49 million shares. OGDC's share price rose 0.35%, or Rs0.57, to Rs162.49 with a volume of 2.42 million shares.

"Based on our estimate, we expect annualised earnings impact of Rs0.09 per share (0.5% of FY18 earnings) for OGDC, Rs1.47 per share (2.4% of FY18 earnings) for POL and Rs0.20 per share (1.0% of FY18 earnings) for PPL, based on oil price assumption of %55 per barrel," it said.