PACRA Assigns Entity Ratings to Zaver Petroleum Corporation Limited : AsiaNet-Pakistan

PACRA Assigns Entity Ratings to Zaver Petroleum Corporation Limited

December 31, 2020 | | Share:

Lahore, December 31, 2020 (PPI-OT):Zaver Petroleum Corporation (Pvt) Limited (Zaver “ZPCL”) is part of the group which includes Orient Petroleum Inc. (OPI) and Orient Petroleum Pty Ltd. (OPPL). Zaver Petroleum Corporation (Pvt) Limited is engaged in the exploration, development and production of oil and natural gas reserves in Pakistan. Currently, ZPCL operates one exploration block i.e. Sari South whereas it is non-operated partner in four exploratory blocks i.e. Sakhi Sarwar, Marwat and Harnai South operated by Orient Petroleum Inc. and Bannu West operated by Mari Petroleum Company Limited.

ZPCL also holds non-operated working interests in Chanda D and PL under Shakardara Concession operated by Oil and Gas Development Company limited and Mehar and Sofiya D and PLs under Mehar Concession operated by UEP Alpha limited. The group is an established oil and gas business unit in Pakistan, with a portfolio of 9 Exploration Licenses and 8 Development and Production Leases. The topline stands at PKR1.2bn for the year ended Jun-20 and has remained stable over the years. Margins have remained modest. ZPCL’s management is pursuing an expansion strategy as it aims to make additions to its revenue stream.

ZPCL has 2P recoverable reserves of 1.3 MMBOE (million barrels of oil equivalent) and net upside recoverable volume of 3.5 MMBOE from its production assets and 167 MMBOE resource potential from its exploratory assets. The work program to enhance production volumes in the upcoming years will be supported through a mix of in-house financing and debt. The balance sheet reflects low leveraging; it is expected to remain the same going forward. The equity base stands at PKR 5.6bln as of Jun-20. Although, the need to improve the working capital remains imperative.

The ratings are dependent on the relative positioning of the company in oil and gas industry, while sustaining the topline profitability and low leveraged capital structure. Volatility in operating margins remain key areas of consideration. Financial discipline is considered core to the ratings, with enduring emphasis on maintaining relevant coverages.

For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425

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