The authorized share capital of the Company is Rs 13,090,001,000 divided into 250,000,000 ordinary shares of Rs 10 each and 1,059,000,100 preference shares of Rs 10 each. The paid-up share capital of the Company is Rs 1,334,025,000 divided into 133,402,500 ordinary shares of Rs 10 each. The detail of shareholding and paid up capital is as under:
(Shares in million)
|Paid-up Capital Amount
(Rs in million)
|Government of Pakistan||24.527||245.267||18.39%|
Under the terms of Participation and Shareholders Agreement, the original Shareholders i.e. Fauji Foundation, GoP and OGDCL have the pre-emption right to purchase the shares if offered for sale by any of the three parties.
Revision in Mari Wellhead Gas Price Formula
The previous gas price mechanism for Mari field was governed by Mari Gas Well Head Price Agreement (“the Agreement”) dated December 22, 1985 between the President of Islamic Republic of Pakistan and the Company. Effective July 1, 2014, the Agreement has been replaced with revised Mari Wellhead Gas Price Agreement (2015) (“Revised Agreement”) dated July 29, 2015 in line with the Economic Coordination Committee (ECC) decision explained below:
Effective July 1, 2014, the cost plus wellhead gas pricing formula was replaced with a crude oil price linked formula which provides a discounted wellhead gas price to be gradually achieved in five years from July 1, 2014. The revised formula provides dividend distribution to be continued for next ten years in line with the previous cost plus formula as explained below under the heading “Return to the Shareholders”. Any residual profits for the next ten years are to be reinvested for exploration and development activities in Mari as well as outside Mari field. Under the revised formula, the Government of Pakistan will no more provide exploration funds to the Company.
Return to the Shareholders
The revised formula provides dividend distribution to be continued for next ten years in line with the previous cost plus formula. Accordingly, the shareholders are entitled to a minimum return of 30%, net of all taxes, on shareholders’ funds which is to be escalated in the event of increase in the Company’s gas or equivalent oil production beyond the level of 425 MMSCFD at the rate of 1%, net of all taxes, on shareholder’s funds for each additional 20 MMSCFD of gas or equivalent oil produced, prorated for part thereof on annual basis, subject to a maximum of 45%. The revised gas price formula will provide return to shareholders at this guaranteed level for the next ten years commencing from July 01, 2014 and thereafter will be based on the discretion of the Board of Directors. The rate of return to the shareholders for the year ended June 30, 2020 was 43.14% per annum, calculated on the basis of production.