The Pakistan Credit Rating Agency Limited
Press Release


Behrooz Fareed

Applicable Criteria

Related Research

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

Rating Type Entity
(21-Dec-22 )
(22-Dec-21 )
Action Maintain Maintain
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). The Company, ZPCL, is engaged in 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 six exploratory blocks i.e., Sakhi Sarwar, Marwat and Harnai South operated by Orient Petroleum Inc. and Bannu West, a major breakthrough in recent times, is operated by Mari Petroleum Company Limited. The Company has also non-operational rights in Mehar and Kohat block. With reference to development & production wells, ZPCL 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 FY22 observed growth of ~76% on a YoY basis, on account of record high oil prices and better volumes. Improvement in topline has reflected into margins as well During FY22, gross margin of the Company has seen material improvement to maintain itself at ~65% (FY21: 23%). Following the suit, net profit margin converged at 38%. In addition, the recent discoveries of Mehar-6 and Bannu west are 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. The Company has a strong capital structure with leverage of mere 14% The equity base stands at PKR 5.9bln as at end-Jun22. Improvement in the working capital structure remains imperative.
The ratings remain dependent on relative positioning of the Company in oil and gas industry with improved topline, profitability and enhanced production. Exchange losses remain a key area of consideration, however, strong financial structure is considered paramount 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, benefiting from 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.