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The Pakistan Credit Rating Agency Limited
Press Release

Date
30-Dec-20

Analyst
Maryam Ijaz
maryam.ijaz@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Entity Ratings to Zaver Petroleum Corporation Limited

Rating Type Entity
Current
(30-Dec-20)
Action Initial
Long Term A-
Short Term A2
Outlook Stable
Rating Watch -

Zaver Petroleum Corporation (Pvt) Limited (Zaver “ZPCL”) is part of the group which includes Orient Petroleum Inc. (OPI) and Orient Petroleum Pty Ltd. (OPPL). Zaver Petroleum Corporation (Pvt) Limited is engaged in the exploration, development and production of oil and natural gas reserves in Pakistan. Currently, ZPCL operates one exploration block i.e. Sari South whereas it is non-operated partner in four exploratory blocks i.e. Sakhi Sarwar, Marwat and Harnai South operated by Orient Petroleum Inc. and Bannu West operated by Mari Petroleum Company Limited. ZPCL also holds non-operated working interests in Chanda D&PL under Shakardara Concession operated by Oil & Gas Development Company limited and Mehar & Sofiya D&PLs under Mehar Concession operated by UEP Alpha limited. The group is an established oil and gas business unit in Pakistan, with a portfolio of 9 Exploration Licenses and 8 Development and Production Leases. The topline stands at PKR1.2bn for the year ended Jun-20 and has remained stable over the years. Margins have remained modest. ZPCL’s management is pursuing an expansion strategy as it aims to make additions to its revenue stream. ZPCL has 2P recoverable reserves of 1.3 MMBOE (million barrels of oil equivalent) and net upside recoverable volume of 3.5 MMBOE from its production assets and 167 MMBOE resource potential from its exploratory assets. The work program to enhance production volumes in the upcoming years will be supported through a mix of in-house financing and debt. The balance sheet reflects low leveraging; it is expected to remain the same going forward. The equity base stands at PKR 5.6bln as of Jun-20. Although, the need to improve the working capital remains imperative.
The ratings are dependent on the relative positioning of the company in oil and gas industry, while sustaining the topline profitability and low leveraged capital structure. Volatility in operating margins remain key areas of consideration. Financial discipline is considered core to the ratings, with enduring emphasis on maintaining relevant coverages.

About the Entity
Zaver Petroleum Corporation (Pvt) Limited, a private limited company, incorporated in Pakistan on 25 August 1991. Zaver Petroleum (Pvt) Limited operates in Pakistan through its registered office in Islamabad. The ultimate beneficial ownership lies with, Mr. Sadruddin Hashwani, a Pakistani businessman.

The BoD of Zaver Petroleum Corporation (Pvt) Limited comprises of three members. They are supported by Technical Advisory Committee, consisting of well-established names in the industry. The management team is headed by Mr. Kamran Ahmed as Chief Executive Officer who has over 30 years of experience in investment banking, oil & gas upstream and downstream industry including working with Shell Pakistan and the Islamic Investment Bank Ltd. He is assisted by competent team of industry professionals.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.