"The drilling of Badhra North B-1 is part of ENI's new strategy in Pakistan which aims to refocus exploration activities in the neighbouring areas to productive fields and confirms the presence of significant exploration potential that can be exploited through the application of new geological models," the Italian group said.
ENI said it has started discussion with the Pakistani regulator in order to speed up the production of the discovery through a long-term production test that will allow for the commercialisation of gas, and help to reduce the national gas deficit. ENI has been present in Pakistan since 2000 and is the largest producer in the country, with an average equity production at approximately 54,800 barrels of oil equivalent per day in 2011.
"Based on news reports ENI has announced successful test results from two formations tested in Badhra B North - 1 exploratory well in the Badhra B Exploration Concession (part of Badhra Field) where OGDC has a 20 percent stake in the asset", Naveed Vakil, Director Research and Business Development at AKD Securities said.
He said the well has flowed from two pay zone formations yielding 25mmcfd and 35mmcfd to total 60mmcfd. "Based on flow rate and adjusting for OGDC's working interest we estimate an annualised EPS impact of Re 0.20/share (assuming application of Badhra pricing)", he added. "However based on our discussions with joint venture partners, gas processing will take place at Bhit Gas Processing Facility which has spare capacity of only 13mmcfd", he said.
If approved by Director General Petroleum Concession (DGPC) for processing at Bhit, lead time for pipeline installation should be 2-3 months with initial production flow of 13mmcfd bringing down estimated annualised EPS impact to Re 0.05/share. Future potential production can be realised to offset gradual depletion of Bhit or if appraisal activity proves successful a development plan may be initiated for the area, he added.