PACRA Assigns Initial Entity Ratings to Orient Petroleum Inc. (Pakistan Branch)

Lahore, December 22, 2020 (PPI-OT): Orient Petroleum Inc. (Pakistan Branch) is engaged in upstream Oil and Gas business in Pakistan, it includes exploration, development and production of oil and natural gas reserves. Currently, OPI has six production leases which include Ratana, Dhurnal, Bhangali, Sinjhoro, Mehar and Sofiya and seven exploration licenses namely Sakhi Sarwar, Marwat, Harani South, Saruna, Kohlu, Sinjhoro and Mehar. Orient Petroleum Inc. (OPI) is part of the group which includes Zaver Petroleum Corporation (Pvt) Limited (Zaver “ZPCL”) and Orient Petroleum Pty Ltd. (OPPL).

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. OPI’s management is pursuing an expansion strategy as it aims to make additions to its revenue stream, to support the bottom-line profit. OPI has 2P recoverable reserves of 31 MMBOE and net upside recoverable volume of 27 MMBOE from its production assets and 634 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 strength of the entity lies in risk adjusted recoverable reserves both from its production and development assets and exploration assets. With increased volume, the profitability will improve as the synergies and efficiencies will take effect. As a consequence, incremental cash flows will help the leveraged balance sheet, while augmenting the company’s ability to meet its obligations. The financial discipline has been good and would be pivotal to future fiscal management.

The ratings are dependent on sustained relative positioning of the company in oil and gas industry. Volatility in topline and profitability remains key areas for considerations. Financial discipline is considered core to the ratings, with enduring emphasis on maintaining relevant coverages.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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