ONGC posts Consolidated Net Profit of ₹ 10,748 Crore in Q3 FY'24, declares 2nd interim dividend of ₹ 4.00 per share

India's leading oil and gas exploration company, Oil and Natural Gas Corporation (ONGC), has released its consolidated financial results for the third quarter of fiscal year 2024, showing a mixed performance. Here's a detailed analysis of the company's financials:

Gross Revenue:

Q3 FY24 Performance: ONGC reported a gross revenue of ₹1,65,569 crores for the third quarter of FY24, reflecting a slight decrease of 2.2% compared to ₹1,69,213 crores in the same period last year (FY23). This marginal decline can be attributed to various factors, including fluctuating global oil prices and operational challenges.

Nine Months Performance: For the nine-month period ending FY24, ONGC's gross revenue stood at ₹4,76,266 crores, marking an 8.5% decrease from ₹5,20,763 crores reported in the corresponding period of FY23. The decrease may be attributed to the overall economic slowdown and the impact of the COVID-19 pandemic on the oil and gas sector.

Net Profit:

Q3 FY24 Performance: Despite the slight dip in gross revenue, ONGC reported net profit of ₹10,748 crores for Q3 FY24, showing a marginal decrease of 7.9% from ₹11,665 crores in Q3 FY23.

Nine Months Performance: ONGC's net profit for the nine-month period ending FY24 witnessed a significant growth of 65.0%, reaching ₹44,685 crores compared to ₹27,076 crores in the same period of FY23. This remarkable growth can be attributed to various factors, including cost optimization initiatives, improved operational efficiency, and higher realization from oil and gas sales.

Crude Oil Price-Nominated Realization:

US$/bbl: ONGC's nominated realization for crude oil stood at $81.59/bbl for the quarter, showing a decrease of 6.4% compared to $87.13/bbl in the corresponding period last year. This decline can be attributed to various factors, including fluctuations in global crude oil prices and geopolitical tensions impacting the oil market.

₹/bbl: Similarly, the realization in Indian Rupees (₹/bbl) witnessed a decline of 5.1%, falling from ₹7,162/bbl in the previous year to ₹6,794/bbl in the current quarter. The decrease in realization in domestic currency reflects the impact of currency fluctuations on ONGC's revenue from crude oil sales.

Crude Oil Price-JV Realization:

US$/bbl: ONGC's realization from joint ventures (JVs) for crude oil also experienced a significant decline, standing at $76.44/bbl for the quarter, down by 10.1% from $84.99/bbl in the same period last year. This decrease reflects the broader trend of declining oil prices in the global market.

₹/bbl: In Indian Rupees, the JV realization decreased by 8.9%, dropping from ₹6,986/bbl to ₹6,365/bbl year-on-year. This decline in JV realization further underscores the challenging market conditions faced by ONGC and other oil producers.

Gas Price:

Price on GCV basis ($/mmbtu): The gas price realization based on Gross Calorific Value (GCV) witnessed a significant decrease of 24.2%, standing at $6.50/mmbtu for the quarter, compared to $8.57/mmbtu in the same period last year. This decline can be attributed to factors such as oversupply in the global natural gas market and reduced demand due to the economic slowdown.

The Board has approved 2nd interim dividend of 80%, i.e. ₹ 4.00 on each equity share of ₹5.00 The total payout on this account will be ₹ 5,032 Crore. The Record date for distribution of dividend has been fixed for 17th February, 2024 which has been intimated to the stock exchanges. This is in addition to 1st interim dividend of ₹ 5.75 per share(115%) declared earlier in Nov,2023.

Crude Oil Production:

ONGC Production (MMT): ONGC's crude oil production for Q3 FY'24 stood at 4.552 MMT (Million Metric Tonnes), reflecting a slight decrease of 2.0% compared to 4.645 MMT in Q3 FY'23. Similarly, for the nine-month period, the production decreased by 2.4% from 14.022 MMT to 13.687 MMT.

JV Production (MMT): The production of crude oil from joint ventures (JVs) witnessed a more significant decline, with a decrease of 16.4% from 0.482 MMT in Q3 FY'23 to 0.403 MMT in Q3 FY'24. Similarly, for the nine-month period, JV production decreased by 11.6%.

Natural Gas Production:

ONGC Production (BCM): ONGC's natural gas production for Q3 FY'24 was 4.962 BCM (Billion Cubic Meters), down by 3.8% from 5.158 BCM in Q3 FY'23. For the nine-month period, ONGC's gas production decreased by 3.4% from 15.555 BCM to 15.023 BCM.

JV Production (BCM): Gas production from joint ventures also declined, with a decrease of 17.3% in Q3 FY'24 compared to the same period last year. For the nine-month period, JV gas production decreased by 2.2%.

Condensate Production and Value-Added Products:

Condensate Production (MMT): ONGC's condensate production saw a marginal decline of 1.9% in Q3 FY'24 compared to Q3 FY'23. However, for the nine-month period, condensate production increased by 4.3%.

Value-Added Products (KT): The production of value-added products, such as petroleum derivatives, witnessed a decline of 4.5% in Q3 FY'24 compared to the same period last year. Similarly, for the nine-month period, the production of value-added products decreased by 4.7%.

The reduction in ONGC's production output in 9M FY 2023-24 was due to:

a. Shutdown in Panna-Mukta offshore platforms for commissioning of new crude oil pipeline to modernise its evacuation facilities, post taking over from JV Partners.

b. Cyclone Biparjoy (June 2023) disrupted offshore and onshore production.

c. Crude oil production of a Southern Asset was hampered as a refinery stopped receiving oil, following a leakage in their pipeline.

d. Natural decline from Mature fields

To counter the decline in production from some of the matured and marginal fields, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities. The decline in production from matured fields will be compensated in upcoming quarters with commencement of additional production from upcoming projects, which are under various stages of development; Crude oil production already commenced from KG-DWN-98/2 Block on 7 January 2024.

Exploratory Success

ONGC has declared total 09 discoveries (04 in Onland and 05 in Offshore) during FY 2023-24 in its operated acreages. Out of these, 05 are prospects (Offshore) and 04 in Onland are New Pools.

ONGC has monetized 6 discoveries till date during FY 2023-24, viz Gopavaram-21(FY 2023-24), South Mahadevapatinam-2 (FY 2023-24), Karugorumilli-1 (FY 2022-23), Gojalia-13 (FY 2011-12), KG-DWN-98/2-M-1(Padmawati)(FY 2001-02) and KG-DWN-98/2-M-3 (FY 2013-14).

Shares of Oil & Natural Gas Corporation Limited was last trading in BSE at Rs. 266.95 as compared to the previous close of Rs. 273.30. The total number of shares traded during the day was 2484994 in over 25878 trades.

The stock hit an intraday high of Rs. 275.60 and intraday low of 259.00. The net turnover during the day was Rs. 659371154.00.

Source : Equity Bulls

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OilandNaturalGasCorporation INE213A01029 ONGC Q3FY24 9MFY24 ResultUpdate