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联合能源(467.HK):未评级

United Energy (467.HK): Not Rated

農銀國際 ·  Jun 27, 2013 00:00  · Researches

Fast-growing medium-sized oil and gas producers

Joint energy plans to increase crude oil production by 41% muri 49% this year, while unit production costs will fall by 2.5% to 12.3%, which will increase the company's net profit this year. A rise in the price of natural gas from oil and gas fields in Pakistan could further boost the company's profits. But the company's capital expenditure is expected to rise 73-97 per cent in 2013 to $295-337 million, while its net debt / equity ratio reached 102 per cent at the end of 2012, so the company may need debt or equity financing in the future.

Fast-growing medium-sized oil and gas producers. United Energy is an independent oil and gas producer. Since 2007, the company has been transformed from an oil field equipment service provider to an oil and gas producer. By the end of 2012, the company's proven reserves in Pakistan and Liaohe oilfields were estimated to have reached 60.34 million barrels of oil equivalent.

The company's output in oil and gas fields in Pakistan has grown rapidly over the past two years. In fiscal year 2012, about 86 per cent of revenue came from Pakistan. In 2013, the company plans to increase daily output by 41.1-49.5%. With the improvement of operating efficiency, the company expects production costs per unit to fall by 3.5-121.3% and 2.5-10.9% in Pakistan and Liaohe oilfields, respectively.

The company discussed an increase in natural gas prices with the Pakistani government. In 2012, 70 per cent of the output of the company's oil and gas fields in Pakistan (in terms of barrel oil equivalent) was natural gas, accounting for 31 per cent of total revenue in fiscal 2012. It is expected that the proportion of natural gas sales in total revenue will continue to rise, and its sales will be partly affected by international gas prices. In 2012, the natural gas produced by the company in Pakistan's oil and gas fields was sold to local state-owned enterprises for about 3.9 US dollars per thousand cubic feet. The company is negotiating with the Pakistani government to raise the sales price of gas for new production to $5-6 per thousand cubic feet, which will boost the company's profits in the second half of this year.

Risk factors: 1) oil price fluctuations; 2) Pakistan's energy pricing policy; 3) changes in regulatory mechanisms; 4) production safety and local situation in Pakistan; 5) high debt ratio and possible funding needs.

The translation is provided by third-party software.


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