The Pakistan Credit Rating Agency Limited
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Wajahat Arjumand Ansari

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

Rating Type Entity
(22-Dec-21 )
(30-Dec-20 )
Action Maintain Initial
Long Term A- A-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Zaver Petroleum Corporation (Pvt) Limited (ZPCL or the Company) is part of a group including 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. ZPCL operates one exploration block i.e., Sari South whereas it is a non-operational 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 topline for FY21 observed growth of 21.1% on a YoY basis, with crude oil being the key growth contributor at PKR 1.2bln converging towards gross revenue of PKR 1.5bln. Stability in margins of ZPCL have been observed as the Company progressed towards expansionary operations, along-with exchange rate variations in favor of the Company. In addition, the recent discoveries of Mehar-4 and Sofiya-3 in Mehar concession is expected to further enhance the Company's production and operational capacity. Expansion in production volumes shall be supported through an in-house financing and debt capital mix. Low leveraging is observed on the balance sheet, however, capital investments can instigate a change in the Company’s leveraging structure. The equity base stands at PKR 5.8bln as of Jun-21. Improvement in the working capital structure remains imperative.
The ratings remain 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 area 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 well renowned Pakistani business tycoon.
The board of directors of Zaver Petroleum Corporation (Pvt) Limited is structured with three members, being further supported by a Technical Advisory Committee, consisting of well-established names in the industry. Mr. Kamran Ahmed has maintained his position as the CEO of the Company, possessing over 30 years of experience in investment banking, oil & gas upstream and downstream industry, gracing work experience 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.