LAHORE - Recovery in country’s hydrocarbon production along with elevated oil prices were the key factors that helped the listed E&P companies to post a phenomenal earning growth in 9MFY12, experts said.

According to them, during the period under review, the sector depicted an earning growth of 36 per cent to Rs113 billion as against Rs83 billion in the same period last year. In addition, due support also came from other income and restricted growth in operating expense.

Contrary to last few years, OGDC, amongst the individual companies, led the way with 41 per cent growth in the bottomline, followed by 33 per cent growth in PPL’s profitability. POL depicted a bottomline growth of 19 per cent. With pricing scenario continue to be in favor of the sector with key productions triggers still to be realized.

An energy expert Nauman Khan, observed that firm international crude oil prices on the back of heightened geopolitical situation has reflected positively on the listed E&Ps, while better hydrocarbon production also played its due role. Thus, benefiting from positive price as well as volume variance, listed sector topline grew by 19 per cent to Rs241 billion in 9MFY12 as against Rs203 billion recorded in the same period last year. Gas production primarily on account commissioning of KPD project was up 4 per cent, while enhanced production from Tal and Naspha block diluted the impact of decline production from other fields in oil front, he added.

In addition, 124 per cent jump in sector’s other income to Rs14.6 billion has also supported the profitability growth, with heads contribution to PBT improving from 5.2 per cent last year to 9.1 per cent this year. On the cost front, operating expense witness a restricted growth of 11 per cent primarily.

 Effect of higher lifting cost and dollar deprecating was diluted by decline in exploration expense due to muted E&D activities and no major dry-well.

Experts said that OGDC this year have leaded the way this year so far, which is contrary to last few years trend. Company posted an earning growth of 41 per cent based on i) 16 per cent increase in company’s topline and ii) 334 per cent increase in company’s other income. PPL followed with 32 per cent, while witnessing the highest growth of in its topline within the sector. The growth in the topline comes from higher net realized gas prices, while it also benefited from its working interest in the Tal block. POL also depicted a respectable growth of 19 per cent in its earnings, however earning growth was partially diluted higher amortization charges. Lastly, Mari depicted an earning growth of 30 per cent but its distributable profitability grew by 19 per cent.