March 28, 2006	Tuesday	Safar 27, 1427

KARACHI, March 27: The rise and fall of the price of share in Oil and Gas Development Company Limited (OGDC) during last week and on Monday symbolized what could be construed as a classic example of ‘buy on rumour, sell on news’.

In just a matter of six trading sessions from March 15 to 24, the OGDC stock climbed 25 per cent or by Rs32 from Rs131 to Rs163. That signified ‘buy on rumour’ and the word doing the rounds was that the Oil and Gas Regulatory Authority (Ogra) was on the verge of raising wellhead gas prices of various fields. Ogra announced the increase in wellhead prices of E&P companies through its website on Sunday. That was ‘news’ and OGDC, which is expected to benefit the most, went into selling, to dip by Rs6 on Monday to close at Rs156.65.

It would be unwise to complicate matters. But the notice of revision in wellhead prices was notified by OGDC to the stock exchange on Monday at 9:54am and announced at 9:58am -— 13 minutes after the opening of the market. Should Ogra have announced ‘price sensitive material information’ on Sunday through its website, before OGDC did it on Monday? Let the regulators and the government debate on the matter.

But back to price revision: Analysts at InvestCap observed in their Monday morning report that the anticipated increase in wellhead prices of the E&P companies as per the increase in international oil prices had finally been announced by Ogra, through its website. The new prices do hold some positives for the three E&P companies.

They said that Qadirpur and Kadanwari were the two fields which got unexpectedly higher increase in their gas prices. Wellhead price for Qadirpur was raised by around 39 per cent to Rs234/mmbtu from Rs168.88/ mmbtu. Similarly, the gas price for Kadanwari fields was increased by 37 per cent to $6.54/ mmbtu as against $4.78/mmbtu in Dec 2005.

The OGDC notice on Monday listed the field-wise revision of wellhead prices as follows: (period from July 2005 to Dec 2005 — revised for period from Jan 2006 to June 2006): Loti, from Rs82.51 per mmbtu to Rs82.76; Dhodak, from Rs175.46 per mmbtu to Rs176; Dakhni, from Rs87.82 per mmbtu to Rs88.09; Misakaswal, from Rs15.82 per mmbtu to Rs15.87; Sadkal, from Rs189.07 per mmbtu to Rs241.18; Qadirpur, from Rs168.88 per mmbtu to Rs233.94; Chanda, from $2.7078 per mmbtu to $2.7082; Daru, from Rs77.20 per mmbtu to Rs77.44; Hundi Sari, from Rs170.08 per mmbtu to Rs231.80; and Nandpur & Panjpir, from Rs222.24 per mmbtu to Rs222.93 per mmbtu.