OGDC’s production registers decrease in FY10
KARACHI:
Investors are advising that investors should take advantage of OGDC’s current price levels and sell. Analysts estimate that 52 to 60 per cent of the company free float is held by foreign investors.
OGDC stock’s rally was driven mostly due to aggressive foreign buying and the company’s fundamentals have failed to keep pace with the price performance and are overvalued at their current levels, according to BMA Capital analysts. Consequently, the stock is overvalued.
“A significant amount of OGDC is owned by foreign players,” said CEO, Shehzad Chamdia Securtities, Ahsan Mehanti. He added that accumulation from foreign investors was a major factor in OGDC’s market performance.
OGDC stock outperformed the KSE-100 by 55 per cent from July 2009 till June 2010; the fiscal year 2010, according to BMA Capital analysts. They estimate that it was responsible for contributing 1,125 points to the index during the period.
Lazard Asset Management and Templeton Asset management own more than 52 per cent of OGDC’s free float, said market sources. They went on to elaborate that out of 250 million of OGDC’s outstanding shares were owned by Mark Mobius; a global investor and emerging markets fund manager who is considered to be one of the leaders in the industry.
Company’s real value
OGDC’s oil production is expected to be down seven per cent and its gas production is expected to be down two per cent this year end as compared with last year, according to BMA Capital’s analyst, Hamad Aslam.
Modest recovery is expected due to the recently initiated production flows from Nashpa, the expected installation of the compression facility at Qadirpur and the enhanced production flows from TAL.
OGDC affected most in the E&P sector by circular debt
Current estimates put the net amount of circular debt at Rs135 billion in the system. While oil marketing companies and power sector are the worst hit from the crisis. The two state owned Energy and Production companies; OGDC and PPL, are in no less trouble. As of March 10, OGDC had Rs63 billion overdue outstanding from oil refineries and gas companies, the settlement of which may have to wait till the liquidity situation eases off in the system.
Nonetheless, the company has been responding to the problem by withholding royalty payments to the government. As of March 10, for instance, OGDC owed royalties of Rs15.8 billion to the government; up 3.7 times during the nine months of the fiscal year 2010. Their cash and other financial assets have surged to Rs18.1 billion as a result, up from a dismal low of Rs9.1bn at the start of the fiscal year.
Published in The Express Tribune, July 21st, 2010.
Investors are advising that investors should take advantage of OGDC’s current price levels and sell. Analysts estimate that 52 to 60 per cent of the company free float is held by foreign investors.
OGDC stock’s rally was driven mostly due to aggressive foreign buying and the company’s fundamentals have failed to keep pace with the price performance and are overvalued at their current levels, according to BMA Capital analysts. Consequently, the stock is overvalued.
“A significant amount of OGDC is owned by foreign players,” said CEO, Shehzad Chamdia Securtities, Ahsan Mehanti. He added that accumulation from foreign investors was a major factor in OGDC’s market performance.
OGDC stock outperformed the KSE-100 by 55 per cent from July 2009 till June 2010; the fiscal year 2010, according to BMA Capital analysts. They estimate that it was responsible for contributing 1,125 points to the index during the period.
Lazard Asset Management and Templeton Asset management own more than 52 per cent of OGDC’s free float, said market sources. They went on to elaborate that out of 250 million of OGDC’s outstanding shares were owned by Mark Mobius; a global investor and emerging markets fund manager who is considered to be one of the leaders in the industry.
Company’s real value
OGDC’s oil production is expected to be down seven per cent and its gas production is expected to be down two per cent this year end as compared with last year, according to BMA Capital’s analyst, Hamad Aslam.
Modest recovery is expected due to the recently initiated production flows from Nashpa, the expected installation of the compression facility at Qadirpur and the enhanced production flows from TAL.
OGDC affected most in the E&P sector by circular debt
Current estimates put the net amount of circular debt at Rs135 billion in the system. While oil marketing companies and power sector are the worst hit from the crisis. The two state owned Energy and Production companies; OGDC and PPL, are in no less trouble. As of March 10, OGDC had Rs63 billion overdue outstanding from oil refineries and gas companies, the settlement of which may have to wait till the liquidity situation eases off in the system.
Nonetheless, the company has been responding to the problem by withholding royalty payments to the government. As of March 10, for instance, OGDC owed royalties of Rs15.8 billion to the government; up 3.7 times during the nine months of the fiscal year 2010. Their cash and other financial assets have surged to Rs18.1 billion as a result, up from a dismal low of Rs9.1bn at the start of the fiscal year.
Published in The Express Tribune, July 21st, 2010.