Yesterday, MOL Pakistan announced that it has discovered oil and gas deposits in a well located in the Tal block, Khyber-Pakhtunkhwa. Reports indicates that the commercial production from the well is expected to start in April, 2017.
“The well has shown flow of 438 barrels per day (bpd) of condensate (crude oil), 15.7 million standard cubic feet of gas per day (mmscfd) with 35 barrels of water per day,” Pakistan Oilfileds Limited (POL), which currently hold 21% stake in Tal block, said in a notification to the Pakistan Stock Exchange. In addition, Oil and Gas Development Company (OGDC) and Pakistan Petroleum Limited (PPL) also hold stakes of 27.76% each in the block , which is operated by MOL Pakistan.
The share price of the above mentioned oil-based companies plunged as investors turned towards profit-selling when the news spreads in the market. POL’s share price dropped by 2.16 and closed at PKR 547.44, share price of OGDC dipped 1.21% and PPL stock plunged by 1.13% to close at PKR 191.13. Also, POL’s notification to PSX added that hydrocarbons were encountered in the Maramzai-04 development well and the well has been completed in Lockhart, Hungu and Lumshiwal formations.
An analyst at JS Research, Syed Atif Zafar, believes that the newly discovered oil and gas deposits will likely help in increasing the earnings per share of commercial stakeholder. “We estimate earnings impact of Rs 1.2 per share for POL, Rs 0.2 per share for PPL and Rs 0.1 per share for OGDC, however, we believe the size of the discovery is somewhat a disappointment given better numbers witnessed in earlier discoveries in the Tal block.”