Oil and Gas Development Company reported a 44% increase in profit to Rs33.6 billion for the quarter ended September 30, 2021 due to a jump in its sales and other income.

According to a notice sent to the Pakistan Stock Exchange on Friday, the oil exploration firm had reported a profit of Rs23.3 billion in the same period of last year.

Earnings per share of the firm jumped from Rs5.43 in July-September 2020 to Rs7.82 in July-September 2021.

Alongside the result, the company announced an interim cash dividend of Rs1.75 per share.

During the quarter, net sales of the company rose 27% as they increased from Rs56.3 billion in July-September 2020 to Rs71.5 billion in the quarter under review.

“Topline increased on the back of a massive 70% year-on-year jump in oil prices and 4% growth in oil production,” said Arif Habib Limited analyst Muhammad Iqbal Jawaid. “On the other hand, gas production plummeted by 10% year-on-year during the quarter.”

Operating expenses of the company inched down 1.86% to Rs16.6 billion in the July-September 2021 quarter compared to spending of Rs16.9 billion under the same head in the corresponding three months of previous year.

Transportation charges soared from Rs229 million in July-September 2020 to Rs404.2 million in July-September 2021, a jump of 76.5%.

Finance and other income rose to Rs10.9 billion in the quarter under review against Rs6 billion in the same quarter of previous year.

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“Other income rose significantly by 83% amid exchange gains on foreign currency tagged with higher income from cash and cash balances,” the analyst said.

Exploration and prospecting expenditure contracted 22% as it fell from Rs3 billion in the July-September quarter of 2020 to Rs2.3 billion in the quarter under review.

The exploration cost declined as one dry well (Bago Phulphoto) was reported during the quarter compared to three dry wells (Jun-01, Umair North West and Jatoi-01) in the same period of last year.

During the quarter, finance cost fell slightly by 0.22% to Rs563.1 million. The company had paid Rs564.3 million under the same head in the corresponding three months of previous year.

“The company booked effective taxation at 36% in 1QFY22 vis-à-vis 31% in 1QFY21,” the analyst said.

During the day, the share price of Oil and Gas Development Company increased Rs0.89 to close at Rs85.48 with 2.2 million shares changing hands at the Pakistan Stock Exchange.

Published in The Express Tribune, October 30th, 2021.

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