POL - Pakistan Oilfields Limited

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  • جو شخص بہانہ بنانے میں بہت اچھا ہو ، وہ کسی اور کام میں اچھا نہیں ہو سکتا
  • پیسہ بدترین آقا ہے، مگر بہترین غلام بھی ہے
  • کسی فرد یا قوم کو برباد کرنا ہے تو اس کی امید کو مار ڈالیے اور اگر اسے تعمیر کرنا ہے اس کی امید کا دیا روشن کیجئے
  • کامیابی سوچ سے ملتی ہے
  • زندگی کی دوڑ میں دوسروں سے آگے نکلنے کیلئے تیز چلنا ضروری نہیں، بلکہ ہر رکاوٹ کے باوجود چلتے رہنا اور مسلسل چلتے رہنا ضروری ہے
  • جب باتیں آمنے سامنے ہوتی ہیں تو جھوٹ اور غلط فہممی کا خاتمہ ہو جاتا ھے
  • بہت اونچے پہاڑ پر چڑھنے کے لئیے قدم آہستہ آہستہ اٹھانا پڑتے ہیں
  • تین چیزیں نیکی کی بنیاد ہیں، تواضع بے توقع, سخاوت بے منت اور خدمت بے طلبِ مکافات
  • غربت اور افلاس کی وجہ پیداوار کی کمی نہیں، بلکہ اسکی غلط تقسیم ہے
  • دولت ہونے سے آدمی اپنے آپ کو بھول جاتا ہے اور دولت نہ ہونے سے لوگ اس کو بھول جاتے ہیں
  • مصروف زندگی نماز کو مشکل بنا دیتی ہے , لیکن نماز مصروف زندگی کو بھی آسان بنا دیتی ہے
  • گناہ کو پھیلانے کا ذریعہ بھی مت بنو, کیونکہ ہوسکتا ہے آپ تو توبہ کرلو, لیکن جس کو آپ نے گناہ پر لگایا ہے وہ آپ کی آخرت کی تباہی کا سبب بن جائے
  • اپنی زندگی میں ہر کسی کو اہمیت دو, جو اچھا ہوگا وہ خوشی دے گا اور جو برا ہوگا وہ سبق دے گا
  • درخت جتنا اونچا ہو گا اس کا سایہ اتنا ہی چھوٹا ہو گا, اس لیے اونچا بننے کی بجائے بڑا بننے کی کوشش کرو
  • جو شخص کوشش اور عمل میں کوتاہی کرتا ہے, پیچھے رہنا اس کا مقدر ہے
  • جو لوگ میانہ روی اختیار کرتے ہیں, کسی کے محتاج نہیں ہوتے
  • حقیقی بڑا تو وہ ہے جو اپنے ہر چھوٹے کو پہچانتا ہوں اور اس کی ضروریات کا خیال رکھتا ہو

Apr 11, 2017

Pakistan Oilfields Limited (POL): Higher revenues to fuel bottom-line growth in 9MFY18

13 April 2018
Pearl Securities Limited

  • The board meeting of Pakistan Oilfields Limited (POL) is scheduled on April 16th, 2018 to unveil its 9MFY18 financial results.
  • Net earnings of the company are expected to clock in at PKR8.36bn (EPS PKR35.33) in 9MFY18 as compared to PKR7.47bn (EPS PKR31.56) registered in the corresponding period of previous year, exhibiting a rise of 12%YoY.
  • In terms of quarterly performance, 3QFY18 bottom-line is estimated at PKR3.60bn (EPS PKR15.20) versus PKR2.81bn (EPS PKR11.88) registered in the same quarter last year, depicting a notable increase of 28%YoY.
  • Topline of the company is expected to rise 17%YoY to PKR23.80bn during 9MFY18 mainly due to significant increase in international oil prices (benchmark arab light price +22%YoY) amid stable production flows. Moreover, devaluation in USD/PKR exchange rate (6.2%YoY in 3QFY18) would further amplify company’s net revenues.
Apr 11, 2017
Pakistan Oilfields Limited (POL): Revenues Remain Largely Flat

16 May 2018
Ismail Iqbal Securities (Pvt.) Limited

  • Pakistan Oilfields Limited (POL) posted earnings of PKR 3.1bn (EPS: PKR 13.13) in 3QFY18. The earnings were up 39% QoQ; however, comparison with last quarter is not meaningful because the company reversed its entire TAL re-pricing gain in 2QFY18. On a normalized basis the company’s revenues remained flat largely because any upside due to a rise in oil prices was capped by (i) the reversion of TAL gas prices to their original Petroleum Policy of 1997 (PP97), and (ii) 21% decline in production from the newly discovered Jhandial well in Ikhlas block. We have slightly adjusted our target price to PKR 669.5/share, which implies a 2.4% downside form the last day closing price; thus, we are maintaining a neutral stance on the scrip.
  • Price reversion of TAL block has a considerable impact on POL’s earnings due to the company’s high reserve concentration compared to OGDC and PPL. We have highlighted our concerns regarding dwindling production flows from Jhandial in our earlier updates. Currently the company does not have any drilling operation in Ikhlas block despite its significant reserve size, which might be indicative of the company’s lack of faith in the block’s production potential.
  • In our E&P universe, POL offers the greatest sensitivity to Arab Light price as every USD 5/ bbl change in crude price changes our target price estimate by 4.5% in the same direction. The similar sensitivity for PPL is 3.7%, for OGDC it is 3.0% and for Mari it is 0.7% only . MARI is the least sensitive to oil prices due to its dependence on gas reserves. Despite the benefit from oil price hike, we are not comparatively positive on POL as it is also the most expensive stock in our E&P universe with an implied oil price of USD 66/bbl., The similar estimate for OGDC is USD 42/bbl and for PPL it is USD 57/bbl.
Aug 12, 2016
Education Level
Pakistan Oilfields Limited (POL): Higher oil prices boost profitability

23 May 2018
Azee Securities (Pvt.) Ltd.

  • In our today's morning report we would discuss the performance of Pakistan Oilfields Limited (POL) for 9MFY18 as company recently announced their result.
  • The earnings of Pakistan Oilfields Limited during the 3QFY18 remained impressive mainly on account of higher crude oil prices by 9.6% QoQ, surge in oil & gas production by 3.2% & 4.6% QoQ and PKR depreciation. During the period, the profit after taxation increase by 39% QoQ to Rs 3.10 billion (EPS: Rs 13.13) against Rs 2.22 billion (EPS: Rs 9.42) in 2QFY18 despite lower other income and one offs in 2QFY18. In 9MFY18 after tax profit stood at Rs 7.86 billion (EPS: Rs 33.26) compared to Rs 7.46 billion (EPS: Rs 31.56) in 9MFY17, depicting rise by 5%. This increase was attributed to higher production of crude oil & gas, better oil prices and increase in other income.
  • The top line of the company witnessed surge of 8% owing to higher production and robust oil prices. As a results net sales of the company stood at Rs 21.98 billion against Rs 20.41 billion in 9MFY17. Oil production surge by 9.4% to 7.33kbpd versus 6.70kbpd in 9MFY17 mainly due to higher production from Jhandial-1. Similarly, gas production up by 14% to 87mmcfd against 76mmcfd registered in 9MFY17 mainly due to higher volume from joint venture field. On the other hand, average crude oil prices massively rise by 22% YoY to $58.70/barrel against $48.30/barrel in 9MFY18.
  • While Jhandial-1, Adhi-30 field and Makori East 6 have connected would further support earnings momentum in near future. However due to better share price performance, we have market weight stance on stock with Dec'18 target price of Rs 671/share.
Apr 11, 2017
Pakistan Oilfields Limited (POL): Revision in earnings

01 June 2018
Sherman Securities (Pvt.) Ltd.

  • We are revising downwards our FY18 EPS estimates for Pakistan Oilfields Limited (POL) due to delay in settlement of issue relating to Windfall Levy on Oil (WLO). The case is currently pending in Islamabad High Court (IHC) and next hearing is scheduled on June 20, 2018. We now believe that one time revenue of Rs6.0bn (per share impact Rs16) relating to TAL block is now likely to be booked in FY19
  • Hence, along with one timer, rising oil price, PKR devaluation against dollar and increase in production is expected to significantly increase earnings in FY19.
  • Just to recall, In 2015, POL along with Joint Venture (JV) partners (MOL, PPL & OGDC) signed supplemental agreement with the government for conversion of TAL block’s Petroleum Concession Agreement to Petroleum Policy 2012. This resulted in enhanced well head gas prices. On December 27, 2017 government amended the supplemental agreement by including Windfall Levy on Oil/Condensate (WLO). Initially, the said levy was only applicable on gas. This resulted in additional cost of Rs14bn for POL which renders the supplemental agreement unviable.
Apr 11, 2017
Pakistan Oilfields Limited (POL): Is it over yet

11 June 2018
AKD Securities Limited

  • For a host of reasons, Pakistan Oilfields Limited (POL) has been on the investors' radar for most part of FY18. This time around, it's majorly the international oil prices together with consistently lower flows from Jhandial (and hence reserve size estimates) leading us to revise our earnings assumptions and target price. Also, we understand and incorporate 3QFY18 results into our model to better reflect full year profitability. Other minor changes include complete elimination of Makori field from our forecast horizon.
  • Accommodating the said, our EPS estimates for FY18/19F now stand at PkR49.31/73.47 and our target price comes down to PkR676/sh, while we still maintain a hold stance. Going forward, surprise movements in the stock can emerge from 1) success on the ongoing exploratory efforts at Khaur North and Joyamair Deep, though our channel checks suggest lower probability of substantial find at any of the 2 efforts, and 2) a favorable decision by the court on TAL block gas pricing issue.
  • With a lot going on in the international arena, intl. oil prices have rocketed to their ~3.5yr highs, specially after US' withdrawal from the JCPOA deal with Iran. In this backdrop, we revise our inputs to US$70/65/bbl for FY19/20F (previously at US$55/bbl throughout the forecast horizon), with a broad level earnings sensitivity of PkR3.7/sh for every US$5/bbl change.
Apr 11, 2017
Pakistan Oilfields Limited (POL): Pinning hopes on new discoveries; Maintain HOLD

20 June 2018
Insight Securities (Private) Limited

  • Expectations of discoveries and higher sensitivity to change in crude oil prices have kept price performance stellar for Pakistan oilfields Limited (POL), up 66% FY2018TD vs. sector return of 38%. Two exploratory wells i.e. Khaur North and Joya Mair Deep are near completion which could result in a discovery announcement soon, if successful. We highlight that every 1000bpd addition to oil production could add PKR5.7/share to earnings.
  • However, existing operations do not present a rosy picture, especially as the much hyped Jhandial field has not lived up to expectations. Average production from the field since inception has been 711bpd (below 600bpd level in past 2 months) vs. initial flow rate range of 1630bpd to 2520bpd provided at the time of discovery. The company has mentioned that Jhandial is still under evaluation, while we believe consistent lower flows might result in downward revision in reserve base. We continue to incorporate Jhandial reserves at 35% discount to the quoted reserve size of 23.87m barrels
  • Assuming long term crude oil prices at US$65/bbl, we maintain our ‘HOLD’ stance on the scrip with reserves based DCF Dec 2018 Target Price of PKR636/share, implying a 6% price downside to be compensated by 7% dividend yield. Key risks to our investment thesis are i) significant change in crude oil prices, ii) lower/higher than expected flows and iii) lower than expected PKR devaluation.
Apr 11, 2017
Pakistan Oilfields Limited (POL): Banking on new prospects

29 June 2018
Alfa Adhi Securities (Pvt.) Ltd.

  • We revise our investment case on Pakistan Oilfields Limited (POL) with an upward revision in target price by 14% after incorporating 9MFY18 detailed accounts, currency devaluation, higher oil prices and lower than expected production from recent finds. Our revised price target (PT) of PKR 630/share indicates a downside of 6.5% along with a dividend yield of 6.5%.
  • POL is in the process of testing two wells (Khaur North-1, Joyamair-Deep 1) that are rumored to have healthy reserves and are behind the stocks 57% outperformance over KSE-100 index FYTD. However, we have not incorporated any discoveries / reserves from these wells as we opt to remain conservative due to a history of disappointments on actualization of prospects. Production from the prized Jhandial block has averaged 806 bdp against tested flows of 2160bpd.
  • We estimate POL’s FY18 EPS to settle at PKR 51.62, up 26% YoY driven by volumetric growth, higher oil prices in 4QFY18 and PKR devaluation. 4QFY18 EPS is likely to clock in at PKR 18.36, up 51% YoY. POL’s EPS would likely grow 45% to PKR75.05 in FY19, driven by higher oil prices and PKR devaluation. However, EPS growth is unlikely to sustain in FY20 and onwards unless the production from recent finds match their promise or new discoveries kick in.

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