E&P drilling activities increase by 50 percent
* 90% drilling target of FY 2012-13 achieved so far
By Abrar Hamza
KARACHI: Manzalai-10 in Tal Block has successfully tested for gas reserves while the exploration and production (E&P) industry has drilled 50 percent more wells in 11 months of fiscal year (FY) 2012-13 as compared to drilling in FY 2011-12, said Pakistan Petroleum Information Service (PPIS) activity report on Monday.
Progress on drillings of important wells promises further production additions as the industry has moved closer to FY 2012-13 target. The E&P industry has drilled 82 wells till the end of May, which includes 29 exploration and 53 development wells. This translates into 90 percent of FY 2012-13 drilling target in the first 11 months, PPIS report stated.
The latest PPIS activity report indicates successful testing of gas reserves at Manzalai-10, located in the Tal Block in NWFP and Gyorgy Mosonyi, while testing at Manzalai-10 is still underway.
On the other hand, Nashpa-IV’s drilling bid has been fixed as industry sources suggested that Drill Stem Test (DST) on the well is likely to start in the next two weeks. First three wells on Nashpa are producing cumulatively 15,000 barrels per day (bpd) oil and 50 million cubic feet per day (MMCFD) gas.
Moreover, another production well, Kadanwari, on the field has been completed with flow of 30 MMCFD. Oil and Gas Development Company (OGDC), which carries 50 percent stake in the field, stands to benefit.
JS Research’s Syed Atif Zafar said that a relatively modest gas discovery of 25-35 MMCFD has been discovered, which will be 20 percent of total Manzalai gas flows, 12 percent of Tal Block gas flows and 1.0 percent of country’s gas flows.
OGDC, Pakistan Petroleum Limited (PPL) and Pakistan Oilfields Limited (POL) have respective stakes of 27.8 percent, 27.8 percent and 21.1 percent, respectively in the block. Zafar said that production from Manzalai-10 is likely to provide annual earnings upside of two paisas per share for OGDC, five paisas per share for PPL and Rs 2.5 per share for POL. He expects the field is likely to be tied-in over the next three to six months. The E&P space has seen renewed interest in recent times, where OGDC, PPL and POL have gained 19 percent, 21 percent and 5.0 percent, respectively in the past one month.
Meanwhile, the latest industry updates on drilling are largely encouraging and suggest positive production outlook for the listed E&P companies. The industry has already drilled more production wells than envisaged at the start of the year though exploration drilling has relatively lagged behind.
Mohammad Fawad Khan of Foundation Research Equities said that a key highlight of FY 2012-13 activity is contribution from private sector and healthy success ratio. Overall private E&P companies (OGDC and PPL) have drilled 21 exploration wells. United Energy Limited contributed the lion’s share with two thirds of drillings. Altogether, private sector enjoyed a success ratio of 50 percent. Most of the finds are in Badin block and in terms of size can be termed as small to modest.
Khan further said that Manzalai-10 has been completed though production numbers on development well are not known but should range between 10-15 MMCFD gas. Manzalai-10 will help in arresting the production decline on the field, he added.
Tal drilling on a new exploration well, Kot-01 has started with total target depth of 5,488 metres, highest among all eight wells drilled so far. Kot-01 is the first exploration well since completion of drilling on Tolanj in 2011-12 and highlights operator’s focus on scanning the remaining potential in Tal block.
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