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03
Directors’ Report
In the name ofALLAH, TheMost Gracious, TheMost Merciful.
Assalam-u-Alaikum!
The Directors have pleasure in presenting a brief review of the operations and financial results of the
Company for the half year ended December 31, 2017.
During the period, the Company has made a profit after tax of Rs. 4,761.7 million (December 31, 2016:
Rs. 4,655.7 million), which is higher by 2.3 % as compared to the corresponding period last year. The
profit translates into earnings per share of Rs. 20.13 (December 31, 2016: Rs. 19.68 per share).
Increase in production volume of crude oil, gas and LPG increased by 10.51% and 13.11% and 9.02%
respectively in comparison to corresponding period last year. Average crude oil price increased by 19.7
% in comparison to corresponding period last year.
As explained in note 16.1 of the Interim Financial Information that the Company on prudent basis
adjusted revenue on account of enhanced gas price for the period July 01, 2015 to December 31, 2017
of Rs. 3,011 million, which was billed due to conversion of TAL block to 2012 Petroleum Policy, as
Ministry of Energy (Petroleum Division) has notified amendments in the 2012 Petroleum Policy that
already executed Supplemental Agreements for conversion from1994 & 1997 PetroleumPolicies shall
be amended within 90 days to include Windfall Levy on Oil/Condensate (WLO), failing which the
working interest owners will not remain eligible for gas price incentive. All these Supplemental
Agreements were signed on gas price only and WLO was not applicable. Based on legal advice the
Company is confident that already executed Supplemental Agreements with the Government cannot
be changed unilaterally and will challenge the imposition of WLO in the court of law. Upon resolution of
this matter the entire revenue on account of gas price incentive of Rs. 6,404 million till December 31,
2017 will be accounted for accordingly. During the period the Company made a consolidated profit after
tax of Rs. 4,782 million (December 31, 2016: Rs. 4,769.4 million) which translate into consolidated
earnings per share of Rs. 20.16 (December 31, 2016: Rs. 20.07 per share).
The following is a comparison of production from the Company’s fields, including proportionate share
fromall operated and non-operated joint ventures:
Crude Oil/Condensate (US Barrels)
1,191,851
Gas
(Million Cubic Feet)
13,730
LPG
(Metric Tonnes)
28,376
Sulphur
(Metric Tonnes)
279
Solvent Oil
(US Barrels)
9,202
The Company’s share in production, including that from joint ventures, for the period under review
averaged 7,160 barrels per day (bpd) of crude, 84.40 million standard cubic feet per day (mmscfd) of
gas, 168.12metric tonnes per day (MTD) of LPG1.85MTD of sulphur and 57 bpd of solvent oil.
Financial results
Production
1,317,082
15,530
30,935
340
10,474
Dec. 31, 2017
Dec. 31, 2016
Six months period ended