Pakistan Oilfields : Transmission of Quarterly Report for the Nine Period Ended March 31, 2023

DIRECTORS' REPORT

In the name of ALLAH, The Most Gracious, The Most Merciful

Assalam-u-Alaikum!

The Board takes pleasure in presenting a brief review of the operations and financial results of the Company for the nine months ended March 31, 2023.

Financial results

During the period, the Company has made a profit after tax of Rs. 30,588 million (March 31, 2022: Rs. 17,496 million), which is higher by 74.8 % as compared to the corresponding period last year. The profit translates into basic and diluted earnings per share of Rs. 107.76 (March 31, 2022: Rs. 61.64). The increase in profit is mainly due to increased sale value because of increase in rupee dollar parity, exchange gain on financial assets and increased interest income due to higher deposits

• interest rates netted off to some extent by increased exploration costs due to dry wells cost charged to expenses, decrease in sales volumes of crude oil and gas in comparison to corresponding period last year. Production volume of crude oil & gas decreased by 8.9%, and 9.2% respectively in comparison to corresponding period last year. During the period, the Company made a Consolidated profit after tax of Rs. 30,930 million (March 31, 2022: Rs. 18,796 million) which translate into consolidated earnings per share of Rs. 108.87 (March 31, 2022: Rs 66.17).

Production

The following is a comparison of production from the Company's own fields, including proportionate share from all operated and non-operated joint ventures:

The Company's share in production, including that from joint ventures, for the period under review averaged 5,126 barrels per day (bpd) of crude, 65.35 million standard cubic feet per day (mmscfd) of gas, 148.52 metric tonnes per day (MTD) of LPG, 1.7 MTD of sulphur and 48 bpd of solvent oil.

EXPLORATION AND DEVELOPMENT ACTIVITIES

Producing Fields

At Balkassar lease (100% owned by POL), Balkassar Deep-1A is expected to be spuded at the end of April-2023 as a replacement of Balkassar Deep-1. Correspondence with the Government is in progress for the renewal of Balkassar Development & Production Lease.

At Pindori Lease (operated by POL with a 35% share), 3D seismic acquisition project of 60 square kilometers has been completed and data processing is in progress to evaluate the prospectivity of Chorgali formation and to evaluate the possibility to produce un-drained oil.

At Tal block, (operated by MOL, where POL has a pre-commerciality share of 25%), Makori East- 5 sidetrack has been approved for the up-dip location.

Tolanj West-2 a developed well drilled down to target depth tested three formations, Lamshiwal formation flowed 12.7 million cubic feet of gas per day, 11.3 barrels of oil per day and 9.2 barrels of water per day at 32/64" choke size at flowing well head pressure of 1,914 psi, Lockhart Formation tested and produced 8.3 million cubic feet of gas per day, 34 barrels of oil per day with no water at 32/64" choke size at flowing wellhead pressure of 1,285 psi and Samanasuk & Shinawari formations flowed 2.25 million cubic feet of gas per day, oil nil, water nil with well head flowing pressure of 374 psi at 32/64" choke size. Production from this well has been started and currently producing around 13.8 million cubic feet of gas per day and around 15 barrels of oil per day.

At Adhi field (operated by Pakistan Petroleum Limited, where POL has 11% share), Adhi South-7 has been spuded on April 14, 2022 drilled down to its target depth, initial testing results were 500 barrels of oil per day and 0.5 million cubic feet of gas per day at 28/64" choke size with flowing well head pressure of 360 psi. Presently this well has been connected to the production line and producing around 400 barrels of condensate and 0.6 million cubic feet of gas per day.

Adhi South-5 tested to the target depth and not produced any hydrocarbons, frac job was also not successful. Adhi South-5 has been side tracked and testing is in progress.

Adhi-35 well was spuded on January 27, 2023 and drilling at 2,517 meters is in progress. The target depth is around 3,666 meters.

Exploration Blocks

At Ikhlas block (operated by POL with 80% share), Jhandial well-3 has been finalized, start of drilling is expected in the third quarter of the calendar year.

At DG Khan block (operated by POL with a 70% share), DGK-1, exploratory well drilled down to 15,206 ft but clearance of hole was not achieved to acquire hole logs. During conditioning 455 ft of fish left in hole and despite several attempts no success was made to recover the fish. Placed cement

plugs and tested Chiltan formation but no hydrocarbons were flowed. Finally the well was plug and abandoned. Remaining leads of DG Khan Block are under evaluation.

North Dhurnal block (operated by POL with 60% share) design study has been completed to acquire 285.3 square kilometers 3D seismic data acquisition.

At Kirthar South Block (operated by POL with 51% share), 34% share has been farm-out to Polish National Oil and Gas Company (PGNiG) and Assignment Agreement has been approved by the Government. The Company is actively pursuing to get Provincial Government approval for resumption of oil and gas exploration activities in this license area.

At Margala block (operated by MOL where POL has 30% share), Tarnol-1 was spuded on Sep 20, 2022. During drilling the prognosed formations were not encountered at the prognosed depth and the well was plugged and abandoned.

At Tal block (operated by MOL where POL has pre commerciality share of 25%), an exploratory well Razgir has been approved by the joint venture partners but on hold due to gas price dispute with the Government. 3D seismic data interpretation of Makori, Makori Deep, Billitang and Kot South, has been completed while seismic interpretation on Sarozai & Sarozai Deep is in progress at Top of Lockhart level. Makori Deep-3 (Development Well) location is also under review for the approval. 3D Seismic data interpretation of Tal East is in progress at top of Lockhart level to mature Kot South prospect.

Mamikhel South-1 well production line has been completed. In order to start production Government's approval is awaited.

At Hisal block (operated by PPL where POL has 25% share), 3D seismic acquisition of 235 square kilometers has been completed.

At Gurgalot block (operated by OGDCL where POL has 20% share), 3D seismic data interpretation has been completed and subsurface location of Gurgalot X-1 has been finalized, well planning is in progress.

At Taung block (operated by Mari Petroleum where POL has 40% share), 340.94 square kilometers 3D Seismic acquisition has been completed and seismic data interpretation is in progress.

At Nareli block (operated by Mari Petroleum where POL has 32% share), 2D seismic acquisition program of 456 line kilometers-firm and 164 line kilometers-contingent was approved and data acquisition work is in progress.

In the recent bidding POL won Multanai block as an operator (100%). The post bidding process of award is in progress with DGPC.

Chah Bali exploration license was awarded to OGDC as an operator with 70% share and to POL with 30% share on November 22, 2022.

Acknowledgement

The Board would like to extend its gratitude to all its stakeholders for their continuous support, which they have extended to Pakistan Oilfields Limited.

On behalf of the Board

Rawalpindi

April 27, 2023