OMV intends to enhance yield from Latif if offered gas pricing as per new policy – Alfalah Securities Limited

Karachi: OMV Pakistan – an Austrian company, has expressed interest in enhancing gas production from Latif Gas Fields by 10 % provided the gas wellhead price are offered in accordance with the new petroleum policy, as reported in the local newspaper.

According to Alfalah Securities Limited, in this regard, OMV has offered to lay a gas pipeline from Latif Gas Fields to Sawan processing plant in case the government agrees to offer gas price in accordance with Petroleum Policy 2012. OMV, an operator of Latif jointly owned by PPL (with 33% stake) and ENI is currently yielding 78Mmcfd of gas. The Ministry of Petroleum had earlier proposed a financial assistance of PKR 2.5 billion to Latif fields to lay a pipeline from Latif gas field to Sawan, if the Latif is able to produce an additional 25 Mmcfd. In case OMV manages to produce additional 25 mmcfd gas and is offered an attractive wellhead gas price of USD 8.0 per MMBTU as per new policy, PPL would reap an incremental annual EPS impact of ~ PKR 0.75. Alfalah Securities Limited recommends a BUY on PPL with DCF based target price of PKR 246.

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