Karachi: New oil and gas discovery has been made in the Nashpa-2 well in Nashpa block, in the area of Khyber Pakhtunkhwa which is operated joint venture concession of OGDC having 56% stake and PPL having 26% interest.
According to Alfalah Securities Limited, Nashpa -2 has been tested to produce 3,370bpd of oil and 11 mmcfd of gas. This is a significant discovery that would have a positive impact on the earnings of OGDC and PPL. Based on Alfalah Securities’ assumption, the earnings are expected to have an incremental impact of PKR 0.7 per share for OGDC and PKR 1.45 per share for PPL which would be added to the FY13 earnings and onwards.
After incorporating the additional impact Alfalah Securities recommends a Hold on OGDC with revised DCF based target price of PKR 154.4 per share and maintain a Buy recommendation for PPL with TP of PKR 246.0. Moreover, drilling of Nashpa-3 is also in progress which is expected to further yield positive results for the two companies going forward.