Press Release
JCR-VIS Reaffirms Entity Ratings of Oil and Gas Development Company Limited at AAA/A-1+
Karachi, December 31, 2008: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Oil and Gas Development Company Limited (OGDCL) at ‘AAA/A-1+’ (Triple A/A One Plus). Outlook on the medium to long-term rating is ‘Stable’.
The ratings of OGDCL factor in the predominant government held shareholding in the company as well as the company’s position as the largest exploration and production (E&P) company in Pakistan producing more than 50% of the total oil production of the country. OGDCL holds more than 30% of the country’s total exploration acreage. Given the production levels and remaining reserve oil & gas reserves as of September 30, 2008, the reserve life was 10 years for crude oil and 30 years for gas.
The strategic nature of the company’s products, as driver of the national economy and its shortfall locally, leads to assured demand situation for all production. The management is also exploring off-shore drilling opportunities and emphasizing on an aggressive exploration program by maximizing usage of available resources in order to increase the pace of new oil and gas discoveries.
In addition to this, ratings also incorporate the robust financial profile of OGDCL that has allowed for heavy expenditure for exploration activities to have been met comfortably through internal cash generation with enough margins to have allowed the company to build a significant liquidity cushion over the years.
For further information on this rating announcement, please contact Mr. Safdar Kazi (safdar@jcrvis.com.pk / Ext: 501) or Ms. Sobia Maqbool (sobia@jcrvis.com.pk / ext: 506) at 5311861-70 or fax to 5311872-73.
Faheem Ahmad
President & CEO