KARACHI, July 4: The Oil and Gas Development Corporation (OGDC) announced on Friday discovery of gas in its exploratory well Dhodak Deep 01, located in district Dera Ghazi Khan under the Dhodak D & PL.

In compliance with the related code of corporate governance, the company announced on Friday that the Dhodak Deep Well No. 01 was spudded on June 30, 2007 and drilled down to the target depth of 4,150 metres.

On the basis of open hole logs & drilling data, the selective interval of 85 M in Chiltan limestone formation was tested through DST to evaluate the reservoir potential. After stimulation job, the well was tested and produced 5.5 million cubic feet of gas per day through half inch choke size. The Well Head Pressure and Water Production was recorded as 1500 Psi and 60bbis per day, respectively.

Analysts were of the consensus view that the discovery was expected to have only a marginal impact on the earning per share of OGDC, based on the initial flow rate on an annualised basis.

On one of the most dismal day of trading at the KSE, on Friday, when the aggregate volume stood at a ridiculously low of only 5.3 million shares, the OGDC stock recorded nearly one-fourth of all shares traded. The news of the discovery was however, received with cool response from the investors, as the scrip lost Rs1.21 (the lowest allowable 1 pc fall in a security in one day) to close at Rs120.72.

“We maintain our Overweight stance on the Exploration and Production sector and recommend an Accumulate stance on OGDC, which offers an upside of 17 per cent to our target price of Rs142/share. On valuations, OGDC trades 8.2x forward earnings and offers a dividend yield of 10 per cent on our FY09 estimates,” the company said.