Oil and Gas Development : Nine Months Ended 31 March 2021

Interim Report and Financial Information

Nine Months Ended 31 March 2021

Corporate Information	02
Directors' Interim Review	03

CONDENSED INTERIM FINANCIAL STATEMENTS

Statement of Financial Position		06
Statement of Profit or Loss		08
Statement of Comprehensive Income	09
Statement of Changes in Equity		10
Statement of Cash Flow		11
Notes to the Interim Financial Statements [unaudited]	12
Directors' Interim Review (	)	34

Corporate Information

Board of Directors

Mr. Zafar Masud	Chairman
Mian Asad Hayaud Din	Director
Mr. Mather Niaz Rana	Director
Dr. Iftikhar Amjad	Director
Mr. Mumtaz Ali Shah	Director
Mr. Muhammad Haroon-ur-Rafique	Director
Syed Khalid Siraj Subhani	Director
Mr. Akbar Ayub Khan	Director
Mr. Muhammad Riaz Khan	Director
Mrs. Shamama Tul Amber Arbab	Director
Mr. Jahanzaib Durrani	Director
Mr. Shahid Salim Khan	MD/CEO

Upon expiry of the term of the existing Board, forenamed Directors were elected by the shareholders in 11th Extraordinary General Meeting held on 17 March 2021. Dr. Iftikhar Amjad has been appointed as Director on Company's Board in place of Mr. Kamran Ali Afzal with effect from 12 April 2021.

Chief Financial Officer

Mr. Irteza Ali Qureshi

Company Secretary

Mr. Ahmed Hayat Lak

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

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]

Share Registrar

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 2021.

During the period under review, international crude oil prices rallied on the back of uptick in economic activities, extended production cuts by OPEC+ group and rollout of vaccines across the globe. However, recovery in oil prices and demand remains fragile owing to COVID-19 resurgence coupled with renewed lock downs in key oil consumer regions. Amidst such uncertain times, OGDCL remained steadfast in its resolve to sustain E&P activities with the aim to bridge prevailing energy demand supply gap and to contribute in the economic growth of Pakistan.

Exploration and Development Activities

OGDCL being the market leader in E&P sector of Pakistan holds the largest exploration acreage which as of 31 March 2021 stood at 91,795 sq. km representing 45% of the Country's total area under exploration (source: PPIS). Business exploration portfolio currently comprises fifty (50) owned and operated joint venture exploration licenses. Additionally, the Company possesses working interest in eight (8) blocks operated by other E&P companies.

In order to enhance oil and gas reserves, OGDCL during the period under review acquired 2,192 Line km of 2D and 387 sq. km of 3D seismic data compared to 2,461 Line km of 2D seismic data in the same period last year. Acquired seismic data represents 83% and 75% of total 2D and 3D seismic data acquisition respectively in the Country (source: PPIS). Moreover, the Company using its in-house resources processed/reprocessed 2,884 Line km of 2D and 2,184 sq. km of 3D seismic data. Furthermore, 277 Line km of geological field work was also carried out in Orakzai and Tirah blocks.

On the drilling front, OGDCL spud thirteen (13) wells in comparison to sixteen (16) wells in the same period last year. Drilled wells include seven (7) exploratory/appraisal wells [Juna-1, Sheen Dund-1,Nangpir-1,Sial-1, Jandran X-4, Toot Deep-1 & Kambir-1], four (4) development wells [Qadirpur-62, Pasakhi WIW-1,Moolan-2 & Mangrio-2], one (1) re-entry well [KUC-1] and one (1) side track well [Nashpa X-5]. Moreover, drilling and testing of ten (10) wells pertaining to previous fiscal year were also completed, while total drilling recorded during nine months was 45,672 meters (9M 2019-20: 48,274 meters).

Development Projects

Discoveries

OGDCL's exploratory efforts to locate new reserves during the reporting period yielded five (5) oil and gas discoveries having expected cumulative daily production potential of 18 MMcf of gas and 849 barrels of oil. Aforementioned discoveries include Togh Bala-1,Siab-1 (Samanasuk) and Siab-1 (Lumshiwal/Hangu) in district Kohat, KPK province, Lakhi Rud X-1 district Musa Khel, Balochistan province and Sial-1 district Hyderabad, Sindh province. Preliminary reserves estimates attributable to aforesaid discoveries are 53.03 billion cubic feet of gas and 0.84 million barrels of oil, combined 10.32 million barrels of oil equivalent.

Nine Monthly Report 2020-2103

Production

During the period under review, OGDCL's oil and gas production was impacted primarily by natural decline at Kunnar, KPD-TAY, Dakhni, Sinjhoro and Nashpa fields. Moreover, lower production was recorded on account of non- revival/partial revival of forced shut-in wells; Kunnar-2, 3, 9 & 10 during COVID-19 coupled with annual turn around at production fields; Dakhni (21-30 August 2020), Nashpa (3-9 September 2020), Sinjhoro (16-26 September 2020), Uch-I(18-30 October 2020) and Uch-II(18-31 March 2021). Likewise, decline in production share from NJV fields combined with less gas intake from Qadirpur and Uch fields by M/s Engro Powergen and M/s UPL-I & II respectively, contributed towards lower output.

Aforementioned decline in production was partially mitigated by injection of twelve (12) operated wells in the production gathering system viz., Mela-7,Pasakhi-11, TAY South West-1,Saand-1 & 2, Umair-1,Mangrio-1, Togh Bala-1,Nashpa-10, Pasakhi Deep-6, Pasakhi West Deep-2 and Qadirpur-62 which cumulatively yielded gross crude oil and gas production of 371,918 barrels and 6,769 MMcf respectively. In order to arrest natural decline and sustain production from mature fields, eighty four (84) work-over jobs were carried out comprising 11 with rig and 73 rig- less. Overall, the Company contributed around 47%, 29% and 36% towards Country's total oil, natural gas and LPG production respectively (source: PPIS). Average daily net saleable crude oil, gas and LPG production including share in both operated and non-operated JV fields is as follows:

Products	Unit of	9M	9M
Measurement	2020-21	2019-20
Crude oil	Barrels per day	36,836	38,125
Gas	MMcf per day	865	916
LPG	Tons per day	802	771
Sulphur	Tons per day	53	54

Financial Results

During the nine months period ended 31 March 2021, OGDCL registered Sales Revenue of Rs 176.382 billion (9M 2019-20: Rs 189.447 billion). During the reporting period, basket price of crude oil remained suppressed due to ongoing COVID-19 pandemic averaging US$ 48.34/barrel (9M 2019-20: US$ 60.00/barrel) which led to lower realized price of US$ 43.28/BBL (9M 2019-20: US$ 53.03/barrel). Likewise, Company's Sales were also affected by decline in average realized price of LPG to Rs 67,838/Ton (9M 2019-20: Rs 69,218/Ton). Whereas, increase in average realized price of gas to Rs 383.48/Mcf (9M 2019-20: Rs 356.89/Mcf) accompanied with rise in average exchange rate to Rs 162.44/US$ (9M 2019-20: Rs 156.59/US$) lent strength to financial results.

In addition to the above, OGDCL's profitability got impacted by higher operating expenses mainly on account of salaries, wages and benefits and workover charges. Moreover, decline in interest income on investment and bank deposits along with exchange loss recorded on revaluation of FC investments and Uch finance lease receivable negatively affected the financials. While, reduction in cost of dry and abandoned wells combined with increase in share of profit in associate positively influenced the financial performance. Overall, the Company recorded Profit after Tax of Rs 66.346 billion (9M 2019-20: Rs 83.122 billion) translating into an EPS of Rs 15.43 (9M 2019-20: Rs 19.33).

Dividend

The Board has announced third interim cash dividend of Rs 1.80 per share (18%) for the year ending 30 June 2021. This is in addition to the first interim cash dividend of Rs 2.00 per share (20%) and second interim cash dividend of Rs 1.60 per share (16%) totaling Rs 3.60 per share (36%) already declared during the fiscal year.

04 Oil & Gas Development Company Limited