Karachi: During 8MFY12 (Jul‐Feb), Oil and Gas exploration (E and P) companies managed to drill 12 exploratory wells as compared to 7 wells spud in the same period last year.
According to Alfalah Securities Limited, the total target is of 31 wells for FY12. POL is in the process of drilling two exploratory well however, it has not drilled any development well in the said period. PPL has not initiated any new exploratory well while it has drilled only one development well. While, OGDC, initiated only one new exploratory block against the target of 12 wells and has spudded seven development wells against the target of 15 wells. Four modest discoveries have been announced so far during FY12 from carry over wells of last year. With slight respite in drilling activity and high success ratio, there is likelihood new discoveries to be announced adding to the profitability of the E and P sector. Alfalah Securities Limited recommends a Hold on OGDC and POL with target price of PKR 190 and PKR 439 respectively. PPL is recommended for a buy preferably through the secondary public offering with TP of PKR 237.