OGDC and PPL to benefit from Nashpa-4 oil and gas reserves – JS Research
Syed Atif Zafar
atif.zafar@js.com
+9221 111-574-111, Ext: 3118
JS Global Capital Limited
We understand that Nashpa-4 has successfully tested for oil and gas reserves and has been tied in to the Nashpa oil production facility.
This is also reflective from the latest PPIS weekly production numbers, where cumulative oil production has increased by 14% to 15,712bpd and gas production has increased by 10% to 50mmcfd from Nashpa.
We expect oil and gas production of ~3,500bpd and ~15mmcfd respectively from Nashpa-4, taking cumulative production from Nashpa to 18,000bpd of oil and 60mmcfd of gas.
Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) have respective working interest of 56.45% and 26.05%. Hence we estimate annual EPS upside of ~Rs1.0/share for PPL (3% of FY14E EPS) and ~Rs0.8 for OGDC (3% of FY14E EPS).
At current levels, we reiterate our ‘Buy’ call on PPL with a Target Price of Rs274 while we maintain‘Hold’ on OGDC with a Target Price of Rs265.
Investor Guide Pakistan - Stocks, Mutual Funds, Forex, Commodities & Personal Finance News