PACRA maintains Entity Ratings of Zaver Petroleum Corporation (Pvt.) Limited

Pakistan's E&P segment, including 10 domestic and 14 foreign companies, operates with 24 rigs actively deployed for drilling with ~124 active exploration licenses as of FY22 by the Ministry of Energy and Petroleum. There is an average of ~3 wells per 1,000 sq. km for exploratory acreage. Currently, ~1,114 exploration wells and ~1,484 appraisal/development well drilled as of Dec-21. Oil production and Gas production in Pakistan stood at 81,496bbl per day and 3,403mmcfd per day, respectively.
Zaver Petroleum Corporation Limited ('Zaver' or 'the Company') drives its strength from its Group companies that includes Orient Petroleum Inc. (OPI), Orient Petroleum Pty Limited (OPPL), OPI Gas (Pvt.) Limited and Hashwani Hotels Limited (HHL) which includes the chain of Marriott hotels in Pakistan. Zaver is engaged in the exploration, development, and production of oil and natural gas reserves. Currently, the Company operates five exploration licenses and three development and production leases in Pakistan i.e., Maher, Sakhi Sarwar, Marwat, Harnai South, & Sari South as exploration leases and, Shakardara, Mehar and Sofia as Development and Production leases. Increased oil and gas prices, led the Company's topline to growth by ~14%; while volumes remains low. On the operational front, Zaver production reports identified crude oil, gas & LPG production of 103,104bbl; 633,404mmbtu and 497MT, respectively, from Jul-22 to Jun-23. Overall, stable growth was observed in the Company’s business margins. However, higher interest costs along with exchange loss kept net margins on the lower level. The Company's risk-adjusted recoverable reserves, both from its production and development along with exploration assets provides strength. Going forward, an increase in volumes may lead to better profitability. However, executional strategies and expected synergies remain crucial. On the financial risk front, the Company's capital structure is considered robust, with low leveraging. Coverages remain strong, albeit with a less favorable working capital cycle. Going forward, financial discipline along with better governance framework remains pivotal for the ratings.
The ratings are dependent on the sustained relative positioning of the Company. Volatility in topline and profitability remains key concern. However, financial discipline along with Sponsor's support are imperative to ratings, while maintaining the coverage ratios.

About the Entity
Zaver Petroleum Corporation (Pvt) Limited ('Zaver' or 'the Company') was incorporated in Pakistan on 25 August 1991. The Company is primarily engaged in exploration, development and production of oil and natural gas reserves.
Sponsoring Family holds major shareholding, i.e. ~67.9%, in the Company; through individuals and associated undertakings. The Board, comprising the sponsors, is Chaired by Mr. Sadruddin Hashwani. While, Mr. Kamran Ahmed heads the Company as the CEO. He is aided by a team of seasoned professionals.