Oil and Gas Development : Nine months report for the period ended March 31, 2024

Interim Report and Financial Information

Nine Months ended 31 March 2024

Corporate Information	02
Directors' Interim Review	03

CONDENSED INTERIM FINANCIAL INFORMATION

Statement of Financial Position		08
Statement of Profit or Loss		10
Statement of Comprehensive Income	11
Statement of Changes in Equity		12
Statement of Cash Flow		13
Notes to the Interim Financial Statements [unaudited]	14
Directors' Interim Review (	)	36

Corporate Information

Board of Directors

Mr. Zafar Masud	Chairman
Mr. Momin Agha	Director
Mr. Shakeel Qadir Khan	Director
Mr. Imdad Ullah Bosal	Director
Mr. Hassan Mehmood Yousafzai	Director
Mr. Muhammad Riaz Khan	Director
Mrs. Shamama Tul Amber Arbab	Director
Mr. Jahanzaib Durrani	Director
Mr. Ahmed Hayat Lak	MD/CEO/Director

The election of directors has been deferred as per the Government directives; incumbents to serve until new appointments. During the reporting period, five directors resigned from the Board while three new directors namely Mr. Momin Agha, Mr. Shakeel Qadir Khan and Mr. Hassan Mehmood Yousafzai were appointed to the Board.

Chief Financial Officer

Mr. Muhammad Anas Farook

Company Secretary

Mr. Wasim Ahmad

Auditors

M/s KPMG Taseer Hadi & Co., Chartered Accountants

M/s A.F. Ferguson & Co., Chartered Accountants

Legal Advisor

M/s Khokhar Law Chambers

Tax Advisor

M/s A.F. Ferguson & Co., Chartered Accountants

Registered Office/Head Office

OGDCL House, Plot No 3, F-6/G-6, Blue Area,

Jinnah Avenue, Islamabad.

Phone: (PABX) [phone]

Fax: [phone]

Website: www.ogdcl.com

Email: [e-mail]

Registrar Office

CDC-Share Registrar Services Limited,

CDC House, 99-B,Block-B, S.M.C.H.S.,

Main Shahrah-e-Faisal,Karachi-74400.

Phone: [phone]

Fax: [phone]

Website: www.cdcsrsl.com

Email: [e-mail]

02 Oil & Gas Development Company Limited

Directors' Interim Review

The Board of Directors of Oil & Gas Development Company Limited (OGDCL) is pleased to present a concise review of the Company's operational and financial performance accompanied with unaudited condensed interim financial information for the nine months ended 31 March 2024.

Rising geopolitical tensions coupled with extension in the OPEC's production curb lent strength to international crude oil prices during the period under review. Average basket price of crude oil recorded was US$ 83.47/barrel against US$ 89.07/barrel in the comparative period. Despite volatility in international oil prices, ongoing LC opening issues and forced production curtailment by SNGPL and UPL owing to less demand, OGDCL during the period under review registered stable performance on operational and financial fronts. In pursuance to production optimization plan, incremental cumulative daily production of 1,497 barrels of crude oil and 6.8 MMcf of gas were recorded at various operated wells. On the financial front, the Company registered improved performance with its top and bottom line financials exhibiting growth of 13% and 7% respectively for the nine months ended 31 March 2024.

Exploration and Development Activities

Being the market leader in E&P sector of Pakistan, OGDCL holds the largest exploration acreage which as of 31 March 2024 stood at 99,268 sq. km representing 39% of the Country's total area under exploration (source: PPIS). The Company's exploration portfolio currently comprises 54 100%-owned as well as operated JV exploration licenses. Additionally, the Company possesses working interest in 13 exploration blocks operated by other E&P companies. During the reporting period, 6 exploration blocks were awarded to the Company comprising 4 operated blocks and 2 non-operated blocks.

In line with its exploration-led growth strategy, OGDCL during the period under review acquired 810 Line km of 2D (9M 2022-23: 1,239 Line km) and 577 sq. km of 3D seismic data (9M 2022-23: 482 sq. km). The acquired seismic data represents 41% and 79% of total 2D and 3D seismic data acquisition in the Country respectively (source: PPIS). Moreover, the Company using in-house resources processed/reprocessed 5,037 Line km of 2D seismic data. However, 3D seismic activities during the period were affected by non-availability of imported ground electronics owing to LC issues, non- commencement of Tirah/Orakzai project due to security issues and heavy rainfall.

On the drilling front, OGDCL spud 8 wells (9M 2022-23: 4 wells) including 3 exploratory wells; Kharo-1, Bettani Deep- 1 & Walidad-1 and 5 development wells; Togh-2,Sono-9, Kunnar West-3,Baloch-2 and Uch-35. Moreover, drilling and testing of 4 wells pertaining to previous fiscal year was also completed. Total drilling recorded during the six months was 25,777 meters (9M 2022-23: 23,959 meters). However, drilling activities were impacted by shortage of spare parts and consumables of rig equipment on account of LC issues leading to stacking of rig N-1 and delay in repair/maintenance work of other rigs.

Discoveries

OGDCL's exploratory efforts to locate new reserves during the period under review yielded 4 gas condensate discoveries viz., Chak 214-1 in district Rahim Yar Khan, Punjab province, Dars West-2 in district Tando Allah Yar and Kharo-1 in district Khairpur, Sindh province and Togh-2 in district Kohat, KP province (9M 2022-23: 3 discoveries). The expected combined daily production potential of these discoveries is 481 barrels of oil and 28 MMcf of gas.

Development Projects

The current status of ongoing development projects is tabulated below:

Nine Months Report 2023-2403

Production

OGDCL is making all viable endeavors to maintain and optimize hydrocarbon production by expediting connectivity of new exploratory, appraisal and development wells in the production gathering system coupled with deploying latest production techniques and cutting edge technologies to minimize natural decline in the mature fields. In this pursuit, Company's production during the period under review contributed around 46%, 28% and 38% towards Country's total oil, natural gas and LPG production respectively (source: PPIS).

OGDCL's average daily net saleable crude oil, gas and LPG production clocked in at 33,339 barrels, 720 MMcf and 735 tons in comparison to 33,034 barrels, 765 MMcf and 732 Tons in the comparative period of last year. The Company recorded stable crude oil and LPG production primarily on the back of production optimization efforts and production start-up from Bettani and Nim East fields. However, natural decline at mature producing fields coupled with ESP mechanical issues at Pasakhi-5 & Sono-7 and Annual Turn Around (ATA) at Chanda, Dakhni, Qadirpur, KPD-TAY and Uch-I & II plants (9M 2022-23: ATA at 3 plants) impacted production. The less gas intake by SNGPL from Qadirpur, Nashpa, Chanda, Dhok Hussain and Togh fields due to SNGPL system constraints and by UPL from Uch field due to less demand from power purchaser adversely impacted production. Moreover, reduction in production from NJV fields was recorded on account of natural decline.

OGDCL with an aim to maintain and optimize production injected 8 operated wells in the production gathering system viz., Nim East-1, Dars West-2,Nashpa-11,Sono-9, Chak 63-2,Uch-34 and Suleiman-1 & 2 which cumulatively yielded gross crude and gas production of 405,501 barrels and 1,945 MMcf respectively. In an effort to arrest natural decline and sustain production from mature wells, the Company carried out 60 work-over jobs comprising 11 with rig and 60 rig-less. Moreover, to induce improvement in the current well flow parameters, pressure build-up survey jobs were completed at various wells of Dakhni, Sinjhoro, Pasakhi, KPD-TAY, Uch and Qadirpur fields. Additionally, electrical submersible pumps were successfully installed at Pasahki-11 and Sono-9 resulting in incremental oil production of 3,350 barrels per day. Through in-house arrangement of FEC compression and operational modifications, 6 low pressure wells from KPD field were also reinjected during December 2023 leading to daily production realization of 16 MMcf of gas, 150 barrels of condensate and 18 Tons of LPG.

During the period under review, peak daily net production recorded for crude oil, gas and LPG was 35,857 barrels, 841 MMcf and 818 tons respectively. Average daily net saleable production including share in both operated and non- operated JV fields is as follows:

Products

Unit of

Measurement

9M

2023-24

9M

2022-23

Crude oil

Barrels per day

33,339

33,034

Gas

MMcf per day

720

765

LPG

Tons per day

735

732

04 Oil & Gas Development Company Limited

Bettani Field Development

OGDCL successfully brought Bettani field into production by completing development of early production facilities (EPF) at Wali-1 in June 2023. The field is currently producing around 980 barrels per day of crude oil and 13.5 MMcf per day of gas. Further field development is being undertaken to enhance oil and gas production, whereby drilling activities are underway at Bettani-2 and Bettani Deep-1 wells.

Reko Diq Mining Project

In line with its plan to diversify its business, OGDCL entered into definitive agreements with the Federal Government, Government of Balochistan, GHPL, PPL and Barrick Gold Corporation for extraction of gold and copper reserves from Reko Diq. The state-owned enterprises (SOEs); OGDCL, PPL and GHPL hold 25% of equity in the project, divided equally among these companies. While 50% of the equity is held by the Barrick Gold along with management and operatorship rights and remaining 25% of the equity is held by the Government of Balochistan. In order to manage the equity shareholding of the SOE's, a special purpose vehicle (SPV) namely Pakistan Minerals (Private) Limited (PMPL) has been incorporated. Currently, project feasibility study is in progress which is expected to be completed by the end of 2024.

Abu Dhabi Offshore Block-5

At offshore block-5, planned exploration and evaluation activities are underway. In this regard, Assess and Select Study has been completed, while the Concept Design (Pre-FEED) Study is in progress. Field development plan was submitted to ADNOC on 15 December 2023 which is currently under review by the ADNOC team. Moreover, contract has been awarded for drilling of 1 shallow exploration well and 3 appraisal wells. These wells are expected to be drilled during April to November 2024, first appraisal well has been spud on 10 April 2024.

Shale Gas and Tight Gas Activities

OGDCL in its efforts to determine shale gas potential in operated fields conducted frac job on KUC-1 well on 4 February 2024 in the third and last vertical section. The flow back of stage-3 testing is in progress. Moving forward, most prolific zone out of 3 vertical stages will be selected for carrying out horizontal fracs. Preparation of TORs for drilling and hydraulically fracturing of KUC-1 (horizontal) as turnkey project as well as hiring of associated consultancy services is in progress. The Company has also embarked on a fast track implementation of tight gas exploration program whereby, tight gas discovery at Nur West-1 in district Sujawal, Sindh province was reported in April 2024. In the short term, fracking on 6-7 wells in operated concessions in Sindh province is planned, while in the long term new tight gas opportunities will be worked out based on tight gas prospectively evaluation study for which tender has been published.

Initiatives toward ESG and Renewables

As ESG represents the sustainability factors that are material to short, medium and long-term enterprise value, the Board has constituted a committee on ESG (Environmental, Social and Governance) which shall be responsible for setting out ESG objectives and targets as well as guiding the Board in initiating and assessing the Company's ESG policies and strategies, ensuring robust ESG management framework, overseeing stakeholder engagement and approving the annual ESG/Sustainability Report. The process of development and implementation of ESG framework has been initiated in the Company so as to ensure adherence to the GRI Standards and Global Practices. Moreover, the Company is also focused on energy diversification including solar, geothermal and green hydrogen and a number of initiatives have been taken in transition towards renewable energy. The Company is also patronizing renowned educational institutions on various projects, like green hydrogen, clean energy technologies, de-carbonization, etc.

Financial Results

OGDCL during the nine months ended 31 March 2024 registered improved Sales Revenue of Rs 348.164 billion (9M 2022-23: Rs 309.148 billion). Higher sales are primarily attributable to favorable exchange rate variance partially offset by unfavorable crude oil price variance. Average realized prices of crude oil, gas and LPG were US$ 68.72/barrel (9M 2022-23: US$ 75.01/barrel), Rs 713.15/Mcf (9M 2022-23: Rs 588.96/Mcf) and Rs 163,309/Ton (9M 2022-23: Rs 149,624/Ton) respectively. Average exchange rate recorded was Rs 284.88/US$ (9M 2022-23: Rs 236.25/US$).

However, Company's profitability was affected by higher operating expenses on account of rent, fee and taxes (15% of wellhead value payment on renewal of leases beyond 30 years mainly Pasakhi, Pasahki North and Qadirpur)

Nine Months Report 2023-2405

combined with salaries, wages and benefits and amortization of development and production assets. Moreover, exchange loss coupled with increase in unallocated expenses of technical services and finance cost also impacted financials. While increase in share of profit in associate and reversal of provision for depletion allowance pertaining to prior periods in light of Supreme Court judgment dated 8 January 2024 positively influenced the bottom-line financials. Overall, the Company recorded Profit after Tax of Rs 171.104 billion (9M 2022-23: Rs 159.639 billion) translating into Earnings per Share of Rs 39.78 (9M 2022-23: Rs 37.12).

Dividend

The Board has announced third interim cash dividend of Rs 2.00 per share (20%) for the year ending 30 June 2024. This is in addition to the first interim cash dividend of Rs 1.60 per share (16.00%) and second interim cash dividend of Rs 2.50 per share (25.00%) totaling Rs 4.10 per share (41.00%) already declared and paid during the fiscal year.

Acknowledgement

OGDCL's Board of Directors acknowledges the continued support extended by all the stakeholders which has always been instrumental in the pursuit to achieve organizational goals and objectives. The Board also wishes to place on record efforts put in by the Company's employees while driving forward business operational and financial performance, safely and responsibly.

On behalf of the Board

(Ahmed Hayat Lak)	(Zafar Masud)
Managing Director/CEO	Chairman
29 April 2024

06 Oil & Gas Development Company Limited

Condensed Interim Statement Of Financial Position [Unaudited]

As at 31 March 2024

Note

SHARE CAPITAL AND RESERVES

Share capital

Reserves

4

Unappropriated profit

NON CURRENT LIABILITIES
Deferred taxation
Deferred employee benefits
Provision for decommissioning cost	5
CURRENT LIABILITIES
Trade and other payables	6
Unpaid dividend	7
Unclaimed dividend

TOTAL LIABILITIES

Unaudited	Audited
31 March	30 June
2024	2023

43,009,284 43,009,284

38,488,510 38,112,050

1,142,331,393 1,001,776,543

1,223,829,187 1,082,897,877

79,109,388		87,644,041
38,385,321		36,910,439
61,535,913		55,648,929
179,030,622		180,203,409

112,830,561 123,306,181

40,552,857 37,452,267

204,097 205,560

153,587,515 160,964,008

332,618,137 341,167,417

1,556,447,324 1,424,065,294

CONTINGENCIES AND COMMITMENTS

8

The annexed notes 1 to 29 form an integral part of these interim financial statements.

Chief Financial Officer

Chief Executive

Director

08 Oil & Gas Development Company Limited

	Note
NON CURRENT ASSETS
Property, plant and equipment	9
Development and production assets	10
Exploration and evaluation assets	11
Long term investments	12
Long term loans
Long term prepayments
Lease receivables	13
CURRENT ASSETS
Stores, spare parts and loose tools
Stock in trade
Trade debts	14
Loans and advances	15
Deposits and short term prepayments
Other receivables
Income tax-advance	16
Current portion of long term investments
Current portion of lease receivables	13
Other financial assets	17
Cash and bank balances

Unaudited

31 March 2024

85,007,282

124,352,793

11,369,406

220,729,481

140,731,110

10,731,188

1,129,480

108,365,473

481,686,732

25,664,612

2,008,190

626,796,915

17,495,390

3,753,053

777,599

48,688,766

172,297,102

48,645,527

108,270,094

20,363,344

1,074,760,592

1,556,447,324

Audited

30 June

2023

85,815,832

122,581,188

6,122,217

214,519,237

118,679,120

9,654,397

1,063,357

121,031,547

464,947,658

22,049,369

1,349,347

576,968,545

16,678,552

1,494,549

871,634

33,315,033

155,694,636

37,625,777

87,304,487

25,765,707

959,117,636

1,424,065,294

Chief Financial Officer

Chief Executive

Director

Nine Months Report 2023-2409