Interim Financial Information (Un-audited)...Case study depicting the corrosion effects at current production rates without inhibition has been carried out on the basis of high CO2

For the 3rd Quarter EndedMarch 31, 2013

Interim Financial Information(Un-audited)

Mari Petroleum Company Limited(Formerly, Mari Gas Company Limited)

Board of Directors

Directors’ Review

Condensed Interim Balance Sheet

Condensed Interim Profit and Loss Account

Condensed Interim Statement of Comprehensive Income

Condensed Interim Cash Flow Statement

Condensed Interim Statement of Changes in Equity

Selected Explanatory Notes to the Condensed Interim Financial Information

Contents

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BOARD OF DIRECTORS

1. LT GEN MUHAMMAD MUSTAFA KHAN (RETD) ChairmanManaging Director, Fauji Foundation

2. LT GEN (R) RAZA MUHAMMAD KHAN Chief ExecutiveManaging Director/CEO, Mari Petroleum Co Ltd

3. MR QAISER JAVEDDirector Finance, Fauji Foundation

4. DR NADEEM INAYATDirector Investment, Fauji Foundation

5. MAJ GEN (R) ZAHID PARVEZDirector Welfare Education, Fauji Foundation

6. BRIG (R) DR GULFAM ALAMDirector P&D, Fauji Foundation

7. MR PERVAIZ AKHTARFinancial Advisor, Ministry of P&NR

8. QAZI MOHAMMAD SALEEM SIDDIQUIDG Petroleum Concessions, Ministry of P&NR

9. MOHAMMAD NAEEM MALIKAdditional Secretary, Ministry of P&NR

10. MR MASOOD SIDDIQUIManaging Director/CEO, OGDCL

11. MR MUHAMMAD RIAZ KHANExecutive Director Joint Venture, OGDCL

12. MR MUHAMMAD RAFIExecutive Dir (Fin)/CFO, OGDCL

13. MR LIAQAT ALIMember MPCL Board of Directors

14. MR MANZOOR AHMEDChief Operating Officer/SEVP NITL

CHIEF FINANCIAL OFFICER

MR MUHAMMAD ASIF

COMPANY SECRETARY

MR ASSAD RABBANI

MARI PETROLEUM COMPANY LIMITED

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DIRECTORS' REVIEW

We are pleased to present to you the directors' review along with financialinformation for the third quarter ended March 31, 2013.

FINANCIAL RESULTS

Gross sales for the third quarter amounted to Rs. 15,958 million whereas gross salesfor nine months ended March 31, 2013 aggregated to Rs. 46,876 million as againstgross sales of Rs. 32,344 million for the corresponding period. The increase is mainlydue to increase in gas sale volume and increase in average selling price includingimposition of Gas Infrastructure Development Cess. The operating results in thefinancial information for third quarter show profit after tax of Rs. 1,207.927 million asagainst Rs. 361.342 million for the corresponding quarter. The cumulative profit aftertax for the nine months to March 31, 2013 is Rs. 1,990.578 million as against Rs.1,757.632 million of the corresponding period. The main reason for increase in profitis due to increase in well head value and finance income and decrease in financecosts which is partially offset by increase in royalty, operating expenses, explorationand prospecting expenditure, provision for taxation and decrease in otheroperating income.

Presently the shareholders are entitled to guaranteed return of 30% per annum. Thereturn to shareholders is escalated in the event of increase in the Company'sproduction beyond the level of 425 MMSCFD at the rate of 1% for each additional20 MMSCFD of gas or equivalent oil produced, prorated for part thereof on annualbasis, subject to a maximum of 45% per annum. Accordingly, based on thisarrangement under Gas Price Agreement, additional return @ 7.83% has beenprovisionally accounted for in the financial information for the nine months endedMarch 31, 2013. Any adjustment/variance does not affect the minimumguaranteed rate of return to the shareholders.

OPERATIONS

The Company continued un-interrupted gas supply from July 01, 2012 to March 31,2013 to all its customers namely, Engro Fertilizer Limited (EFL), Fauji FertilizerCompany Limited (FFC), Fatima Fertilizer Company Limited (FFCL), Pakistan ElectricPower Company (PEPCO), Sui Southern Gas Company Limited (SSGCL),Foundation Power Company Daharki Limited (FPCDL) and Sui Northern GasPipelines Limited (SNGPL). The cumulative gas of 157,702 MMSCF at a daily averageof 576 MMSCF and 21,670 barrel of condensate (79 barrel per day) were producedfrom Mari Field during the period as against 151,697 MMSCF of gas at a dailyaverage of 552 MMSCF and 18,894 barrel of condensate (69 barrel per day) for thecorresponding period as per the requirement/withdrawal of the customers. Inaddition, 112,618 barrel of crude oil (411 barrel per day), 12,234 barrel ofcondensate (45 barrel per day), 819 MMSCF of gas (3 MMSCF per day) and 477metric ton of LPG (2 metric ton per day) was produced and sold from joint venturesduring this period, whereas 28,215 barrel of crude oil (103 barrel per day), 28,270barrel of condensate (103 barrel per day), 776 MMSCF of gas (3 MMSCF per day) and 1,720 metric ton of LPG (6 metric ton per day) was produced and sold fromjoint ventures in the comparative period.

Regular maintenance of gas gathering network and production facilities wascarried out and production optimization plans were followed as per good oil/gasfield practices for effective production and reservoir management.


5

OPERATIONAL ACTIVITIES AND DEVELOPMENTS

Gas Sales Enhancement and its Allocation

Ministry of Petroleum and Natural Resources allocated 22 MMSCFD additional gasfrom SML/SUL/Pirkoh Limestone formation to EFL on interim basis.

In order to supply the gas in shortest possible time in line with the Governmentdirectives, rigorous efforts were made to make internal adjustment in the pipelinegathering network. Necessary modifications / well arrangement were made atCentral Manifold and at individual wells in order to stay within the stipulatedobligations with other customers. Such efforts brought fruit in the shape ofadditional gas supply from Mari Field Daharki. The Term Sheet with EFL wasnegotiated and executed for one year. By the grace of Allah (SWT), gas supply toEFL commenced on April 01, 2013.

Supplemental Agreement with EFL

The 3rd Supplemental Agreement between EFL and MPCL has been executed andsigned by both the parties after approval from OGRA. The contract period for thesubject Agreement has been further extended for five years effective from June 01,2013.

Development of Zarghun South Gas Field

The Government of Pakistan approved Supplemental Development Plan undertight gas policy. Detailed engineering study for field development by a consultantis in progress. Purchase Orders for processing packages have been issued to thesuppliers through competitive bidding. After detailed technical and commercialevaluations, the purchase orders for packages like Dehydration Plant, AmineSweetening Unit and Hydrocarbon Dew Point Unit (HDCP) have been placed witha Canadian firm and the delivery is expected by May, 2013. Meetings are beingheld with SSGCL for the construction of 64 km transmission line. The civil contractorhas been mobilized for leveling, grading and initial infrastructure developmentwork at proposed plant site.

Development Activities at Halini-1

As per Government of Pakistan's approval, Extended Well Testing (EWT) operationsat Halini well is in progress. During the period from July 2012 to March 2013, 112,618barrel of crude oil (MPCL's 60% share) was supplied to Attock Refinery Limited as perallocation.

The study report for re-completion design and appropriate selection of artificial liftsystem for Halini-1 has been submitted by the USA based consultant. The report hasbeen reviewed by MPCL and JV partners. As per recommendations in the report,artificial lift system for the well will be procured for work over operations.

Procurement of material and packages for phase-III production is completed andmaterial has been received at site. Civil, mechanical and electrical contractorshave been mobilized at site and field development works are in progress. Thedevelopment works are expected to be completed in the second quarter of 2013.

After installation and commissioning of phase-III production, storage and loading facilities for permanent set-up, crude oil production from the well will be increasedand Pressure Survey Profile (PSP) survey will be conducted. Based on PSP results and


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1 Ziarat Exploration License 60% MPCL2 Karak Exploration License 60% MPCL3 Sukkur Exploration License 58.8% MPCL4 Hanna Exploration License 100% MPCL5 Harnai Exploration License 40% MPCL6 Sujawal Exploration License 100% MPCL7 Ghauri Exploration License 65% MPCL8 Hala Exploration License 35% PPL9 Zindan Exploration License

Kohlu Exploration License35%30%

OGDCL10

Kalchas Exploration License 20%OGDCL

11Kohat Exploration License 20%

PPLOGDCL

12Bannu West Exploration License 10% Tullow Pakistan13Oman 43B (Overseas Block) 25% MOL

Sr. No Name of Block MPCL’s Working Interest

Name of Operator

14

as per consultant's recommendations, work over operations will be performed toinstall Gas lift system. In order to procure the compressor for artificial lift, coordinationwith suppliers has been completed and preparation of report for review andapproval is underway.

Mitigation of Corrosion at Mari Wells

Case study depicting the corrosion effects at current production rates withoutinhibition has been carried out on the basis of high CO2 contents at Mari Deep Wells.The theoretical study has been formulated and detailed action plan for conductingthe practical test utilizing various corrosion inhibitors and monitoring corrosion rateshas been prepared. Mechanical contractor for the required services has been hiredand construction of loops of different metallurgy has been completed. Differentinhibitors shall be pumped in the loops to monitor the corrosion rates. Data recordingis expected to start in the second quarter of 2013.

EXPLORATION ACTIVITIES

MPCL's working interests in various exploration licenses are as follows:


OPERATED BLOCKS

Ziarat BlockIn order to produce the Khost well # 3 with artificial lift, work over operations weresuccessfully completed and function testing of the Jet Pump was conducted.Rigorous coordination and team efforts were made to put permanent surfaceproduction facilities at Khost-3. By the grace of Allah, EWT operation through JetPump at Khost-3 commenced on March 15, 2013, which is in progress. The wellproduced 2,370 barrel of crude oil (MPCL's share 1,422 barrels) from March 15, 2013 toMarch 31, 2013 which was dispatched to National Refinery Limited.

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Karak Block3D seismic data acquisition of about 335 sq. km commenced on January 03, 2013 bythe contractor subsequent to survey/drilling. The said 3D seismic data acquisition is inprogress over Halini discovery area and Kalabagh lead for placing additional wells and firming-up of new drillable prospect. A total of 121 sq. km 3D seismic data hasbeen recorded as of April 15, 2013.Contractor has been selected for 3D/2D seismic data processing based on thecompetitive bidding and accordingly contract is being awarded to commence thedata processing.

Sukkur BlockThe Surface Well Testing at Mian Miro-1 has been successfully completed by utilizingMPCL's own testing equipment and surface facilities and the data obtained is underevaluation.

Hanna BlockThe location of exploratory well (Hanna X-1) in Hanna block has been finalized andwell has been stacked. The said well would be drilled down to 1,250 m to test thehydrocarbons' potential of Dunghan and Chiltan limestones. The services requiredfor the drilling of Hanna X-1 have been arranged and finalized. The civil contractorhas been mobilized for undertaking the grading, leveling and dozing of the site priorto construction of rig foundation and well cellar.

Sujawal Block2D seismic data of about 150 line km was successfully acquired during March-April2013 by the consultant. Presently, contract is being awarded forprocessing/reprocessing of 1,050 line km based on competitive bidding, whichwould be completed by July 2013. The seismic data processing will be followed by in-house interpretation/mapping and integration of G&G data for delineation ofdrillable prospect for placing two additional wells in the block. MPCL plans to drill anexploratory well subject to delineation of a viable prospect, whereas, second wellwould be an appraisal well, based on the test results of on-going EWT at Sujawal WellX-1.Presently, preparations are in progress to award the processing/reprocessingcontract based on competitive bidding.Amplitude Versus Offset (AVO) /Inversion studies are in progress for mitigation ofreservoir risk at the identified lead and Sujawal discovery area as part of R & Dcampaign.To supply the dehydrated gas to SSGCL in 1st phase, MPCL completed the civil andmechanical installations for field development as per plan. The rigorous andcoordinated efforts were made and the commissioning activities were completed inrecord time. Another significant milestone was achieved when the first gas to SSGCLstarted on March 02, 2013. Presently, the un-interrupted gas supply is beingmaintained from Sujawal field to SSGCL.In order to complete the 2nd phase, the procurement process for the purchase ofAmine Sweetening Unit and Hydrocarbon Dew Point Unit (HDCP) has been initiated.Technical bids have been received and are under evaluation.


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Ghauri BlockLand for Ghauri X-1 has been procured. Based on integration of all available G&Gdata, location for the first exploratory well Ghauri X-1 has been finalized and stackedon the ground. Designing and planning of the well structure, casings, cementing andcompletion programs of well Ghauri X-1 have been completed. Long Lead Items(LLI's) are being procured after approval from JV partners. The process of acquiringthe required services for drilling of Ghauri X-1 is also in progress. The hiring of 2,500 HPLand drilling rig is being finalized after clarifications from Contractors.The said well is proposed to be drilled down to the depth of 4,250 m to test thehydrocarbons' potential of Sakessar and Khewra formations. Assignment of 30%working interest to MOL is in the process of government approval.

Mari Development and Production LeaseThe in-house interpretation of newly reprocessed 2D and pilot 3D seismic data is inprogress for the purpose of placing additional wells, subject to confirmation ofprospects.In order to drain the Pirkoh reservoir optimally, three Pirkoh wells # 4, 5 and 6 will be drilled in Pirkoh limestone in Mari Field area. The location of Pirkoh wells # 4, 5 and 6have been stacked on the ground to test the hydrocarbons’ potential of PirkohLimestone. The planning for drilling of these wells is complete and spud in of first well isexpected in May 2013.The seismic survey design for acquisition of about 1,000 sq. km 3D data has beencompleted by the consultant. The survey / line lay out of said 3D seismic is expectedto be commenced by mid May 2013. Subsequently, data will be processed, followedby in-house interpretation / mapping, which would help to place additional wells atSML/SUL and Lower Goru levels to drain reservoirs optimally. In addition, 3D seismicdata would help to identify the small features at Pirkoh Limestone/SML levels, up-sidepotential in Lower Goru Sands and potential in Sembar Sands and Chiltan Limestone,which would help to increase overall reserves base of MPCL.

NON-OPERATED BLOCKS

Hala BlockReprocessing of three 3D seismic data (total 341 sq. km) has been completed by theconsultant and subsequently, inversion of 3D seismic data set is in progress forreservoir rock prediction. This would be followed by interpretation/mapping to firmup the prospect for drilling.Presently, preparations are underway to conduct work over job at Adam well whichis anticipated to commence by the first week of May 2013 in order to bring LowerBasal Sand on production.Operator has submitted an application to DGPC on March 04, 2013 for nine monthsextension w.e.f March 11, 2013 in the Phase-II of exploration license to make adecision for drilling of 3rd exploration well in the block. The operator has also appliedfor extension of EWT period of Adam X-1 till June 30, 2014.

Zindan BlockProcessing of about 517 line km newly acquired and reprocessing of about 201 linekm vintage 2D seismic data is in progress and is expected to be completed by June,


2013. The processing / re-processing would be followed by interpretation/ mappingfor delineation/firming-up of drillable prospect.

Kalchas BlockBiostratigraphic, geochemical and reservoir study has been completed forevaluation of source and reservoir rocks in the area.

Kohat BlockBids are being invited to acquire 2D and 3D seismic data over Sheikhan discoveryarea and remaining part of the block for delineation of drillable prospect.

Oman43B Block Assignment of MPCL's 25% working interest to MOL Hawasina is in progress.

New AreasGovernment of Pakistan has invited bids for the grant of petroleum exploration rightsto over sixty new exploration blocks. After detailed in-house technical evaluation ofthe selected blocks, MPCL submitted bids for six blocks, namely: Shah Bandar,Ranipur, Sadiqabad, Rakhshan, Hetu and Peshawar East. MPCL won Peshawar Eastblock against work commitment of 105 work units.Subsequent to block bidding round, technical data was reviewed in detailed atLMKR to carve out new blocks. Accordingly, Jhelum block has been selected forgrant of exploration license. The Jhelum block covers an area of 2,456.52 sq. kmlocated in Jhelum, Gujrat and Mandi Bahauddin districts of Punjab Province and liesto the south of Ghauri block. Application for grant of exploration rights over Jhelumblock has been submitted to DGPC on April 09, 2013. In addition, detailed evaluationof technical data is also in progress to chalk out few more blocks for grant ofexploration licenses.ENI has offered exploration blocks in Egypt and Indonesia for possible farm-in, whichare being evaluated, however, it has declined the farm-in possibility in Gabon.In addition, international exploration opportunities in prospective blocks in Africa,Myanmar, Bangladesh and Sudan are being explored/evaluated for farm-inopportunity.

MARI SEISMIC UNIT (MSU)Over the years, MPCL was finding it increasingly difficult to arrange seismic survey inits concession areas due to poor law and order situation. This was also due to non-availability of adequate number of seismic companies for the areas where majorE&P activities were to be carried out. Therefore, the Company decided to raise itsown seismic unit.MPCL initially planned to have a joint venture with a Pakistani and a foreign seismiccompany where the JV Partner was to provide some capital or seismic equipment tocover the balance cost of the project. MPCL held long negotiations with Tesla, CGEand BGP for JV. However, the offered terms and conditions of foreign investment inthe JV were neither acceptable to foreign company nor found favourable for MPCL.MPCL also offered to PPL for the Joint Venture but this option was not accepted. Thisoption was, therefore, considerably scaled down. Meanwhile, the shareholders ofthe Company have also contributed / approved Rs. 421 million for the project. The

9MARI PETROLEUM COMPANY LIMITED

Company is also hiring technical services of foreign seismic professionals. MPCL is alsoarranging funds for MSU from different sources of financing other than the Gas Price.The BOD has approved that the Shareholders' funds may be used to the extent thatfunds from other sources are not sufficient. The contribution by shareholders hasalready been approved in the Annual General Meeting held on October 25, 2012. Hence, the project will be a JV between the Government of Pakistan and theshareholders with the contribution of GoP amounting to Rs. 920 million andshareholders' contribution amounting to Rs 420.048 million. The balance amount offunds will be financed through bank loan against the MSU's own earnings. Hence,financing for the MSU will be entirely against MSU project. Security for the loan will beexclusive charge over seismic data equipment and assignment of seismic relatedreceivables for the services rendered by Mari Seismic Unit. The repayment ofprincipal and markup on the loan will be madeout of the revenues of MSU. With theavailability of funds from other sources, the foreign seismic contractor will not berequired to provide any equipment. Now the Company is focusing on obtaining onlytechnical / professional services of the foreign seismic professionals.

CORPORATE SOCIAL RESPONSIBILITY (CSR)At Mari Petroleum Company Limited (MPCL), Corporate Social Responsibility (CSR) isthe continuing commitment of our business in order to contribute to the well beingand quality of life of our workforce, local community and society at large.Our CSR strategy is part of the Company culture and the vision of top management,to enhance the sustainable development programs, in and around the operationalareas to meet the pressing needs of local communities.A brief description of our CSR programs in Mari D&P lease area and Joint ventureblocks is appended bellow.

i. EducationMari Education and Health Complex is almost complete and the classes willcommence in second half of 2013.Besides other education projects, one of the important project by MPCL is the“Takeover of Middle Boys School Kamerser, District Mianwali”.The MPCL leadership, realizing the importance of specialized technicalmanpower for E&P Companies spearheaded the idea of “Technical TrainingCenter” at Daharki with the contribution of Rs. 30 million which is now fullyfunctional.

ii. Water Supply Schemes

Contaminated water is a major source of a number of diseases in the country. MPCL has an elaborate system of providing portable drinking water to the farflung areas.

At Kamerser, Mianwali District numerous tube wells were installed, water wellswere dug, and water supply scheme has been reconstructed along with theinstallation of water filtration plant for the local community.

iii. HealthSpending of Rs. 190 million in promoting health care projects is the testimony of

MARI PETROLEUM COMPANY LIMITED10

MARI PETROLEUM COMPANY LIMITED 11

our commitment to provide quality health care services to our work force andthe community.The recent highlights of MPCL health projects include construction of additionalrooms, purchase of laboratory and therapy equipment at Kamerser dispensaryand establishment of exclusive dispensary in Daharki for the treatment ofTuberculosis patients.

iv. Communication NetworkMPCL is also committed to provide better means of communication for easieraccess to far flung villages. A huge amount has been and is being spent ondifferent projects in various block areas located in different parts of the country.Some of these projects are:-o Approximately 400 KMs road network and bridges have so far been

constructed in the field areas at the cost of Rs. 300 million.o In Mianwali District alone the road from Kamerser to Alimahi village is under

construction which shall go a long way in uplift of this backward area andwell-being of the people.

v. Ongoing projectsFollowing projects will be implemented in near future:-o Takeover of one school at each JV Block.o Construction of additional class rooms and wash rooms in Primary school Kili

Muhammad Sher, Urak and boys high school Hanna are in progress.o Construction of additional rooms at Primary Girls School Rahim Abad, Koonj

and Primary School Muhammad Yousaf are in progress.o Construction of Primary School at Sarki Kutch, Harnai and repair work of

Primary school Dilwani to start in May 2013.o Civil works at Khost dispensary to start in first week of May 2013.o Provision of clean drinking water at village Hanna Urak, District Quetta,

Balochistan.o Schemes at Ghauri Block District Jhelum, regarding provision of drinking

water, health and education have been planned.

MPCL is operating several joint venture exploration blocks in four provinces of thecountry. These JV blocks remain the focus of the Company's CSR program. Some ofthe completed projects have already been handed over to the districtgovernments as per government policy. Work on some projects in JV blocks iscurrently in progress.

IslamabadApril 29, 2013

Lt Gen Muhammad Mustafa Khan (Retd)Chairman

For and on behalf of the Board

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Lt Gen (R) Raza Muhammad KhanManaging Director/CEO

(FORMERLY, MARI GAS COMPANY LIMITED)CONDENSED INTERIM BALANCE SHEET (UN-AUDITED)


EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized capital

250,000,000 ordinary shares of Rs 10 each 2,500,000 2,500,000

The annexed notes 1 to 25 form an integral part of this condensed interim financial information.


Issued, subscribed and paid up capital 918,750Undistributed percentage return reserve 5 420,048Exploration and evaluation reserve 4,150,409

Reserve for Mari Seismic Unit -

Profit and loss account 6 5,986,939

11,476,146NON-CURRENT LIABILITIES

Long term financing - secured 7 946,667

Deferred liabilities 8 4,415,608

5,362,275

CURRENT LIABILITIES

16,449,169

CONTINGENCIES AND COMMITMENTS 10

918,750420,048

4,520,662

353,6757,004,975

13,218,110

675,8734,764,681

5,440,554

24,094,489

Trade and other payables 9 15,950,674

Current maturity of long term financing 7 442,222

Interest accrued on long term financing 56,273

Provision for income tax -

22,827,494

527,937

8,373

730,685

42,753,153 33,287,590

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11 4,807,854 4,472,186

Development and production assets 12 3,402,087 3,424,616

Exploration and evaluation assets 13 4,520,662 4,150,409

12,730,603 12,047,211

Investment in Mari Seismic Unit 14 353,675 -Long term loans, advances, deposits and prepayments 19,557 16,641Deferred income tax asset 1,121,898 490,528

14,225,733 12,554,380

CURRENT ASSETS

Stores and spares 831,902 806,905Trade debts 15 21,045,844 15,151,485

Loans, advances, prepayments and other receivables 16 2,002,021 1,629,788Income tax paid in advance - 194,216

Cash and bank balances 4,647,653 2,950,816

28,527,420 20,733,210

42,753,153 33,287,590

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Qaiser JavedDirector


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17 15,958,392 14,788,993 46,876,378 32,344,449

4,475,282 6,260,191 15,496,234 16,665,0022,125,835 1,980,897 6,250,605 4,346,929

374,575 363,586 1,120,076 1,093,9464,410,620 3,939,112 13,569,360 3,939,112

85,614 124,935 383,431 174,160561,242 336,576 1,383,432 338,539

12,033,168 13,005,297 38,203,138 26,557,688

3,925,224 1,783,696 8,673,240 5,786,761500,206 234,075 1,127,702 729,959

3,425,018 1,549,621 7,545,538 5,056,802

18 952,634 921,685 2,732,951 2,462,45319 448,393 74,477 1,246,291 268,618

164,210 48,141 289,752 170,8151,565,237 1,044,303 4,268,994 2,901,8861,859,781 505,318 3,276,544 2,154,916

20 108,889 13,061 173,439 265,5081,968,670 518,379 3,449,983 2,420,424

135,862 112,330 353,283 332,190

21 40,289 46,864 414,803 432,4142,064,243 583,845 3,388,463 2,320,200

22 856,316 222,503 1,397,885 562,568

1,207,927 361,342 1,990,578 1,757,632

128,290 112,781 379,850 335,955210,957 78,664 370,253 1,182,633353,675 - 353,675 -

Profit and loss account - undistributable balance 515,005 169,897 886,800 239,044

1,207,927 361,342 1,990,578 1,757,632

1.40 1.23 4.13 3.66

13.15 3.93 21.67 19.13

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1,207,927 361,342 1,990,578 1,757,632

1,207,927 361,342 1,990,578 1,757,632

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MARI PETROLEUM COMPANY LIMITED(FORMERLY, MARI GAS COMPANY LIMITED)

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2013


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FOR NINE MONTHS ENDED MARCH 31, 2013

3,388,463 2,320,200

664,733 566,43056,207 18,293

13 -(353,283) (332,190)414,803 432,414

4,170,936 3,005,147

(24,997) (73,946)(5,894,359) (5,038,083)

(365,994) (506,162)

6,914,573 3,860,935

4,800,159 1,247,891

(11,900) (4,401)(1,104,354) (338,662)

(1,119,170) (345,572)3,680,989 902,319

(1,686,821) (1,141,476)20 -

347,044 327,280

(1,339,757) (814,196)

300,000 100,000(485,079) (431,111)(172,949) (232,241)(286,367) (249,436)(644,395) (812,788)

1,696,837 (724,665)2,950,816 3,779,9874,647,653 3,055,322

(2,916) (2,509)



MARI PETROLEUM COMPANY LIMITED (FORMERLY, MARI GAS COMPANY LIMITED)

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)


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MARI PETROLEUM COMPANY LIMITED (FORMERLY, MARI GAS COMPANY LIMITED)

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2013


306,470 - -5,239,827 5,745,440 12,210,487- - -- (642,466) (642,466)

- - -- (91,875) (91,875)113,578 - - (113,578) -

- - (1,089,418) 1,089,418 -

420,048 - -4,150,409 5,986,939 11,476,146- - -- 1,990,578 1,990,578

- - - (353,675) -

490,220 - -4,057,194 5,388,001 10,670,415735,000- - - - 1,757,632 1,757,632-

(183,750) 183,750 - - --- (183,750) - - -183,750- - 1,182,633 (1,182,633) --

918,750-

--

-

918,750-

-

918,750 420,048 - 4,520,662 7,004,975 13,218,110

- - - (217,560) (217,560)-

- - - - (248,614) (248,614)-- - 370,253 (370,253) --

353,675

353,675

-

-

--

-

-

-

1. LEGAL STATUS AND OPERATIONSMari Petroleum Company Limited (formerly, Mari Gas Company Limited) "theCompany" is a public limited company incorporated in Pakistan on December 04, 1984under the Companies Ordinance, 1984. The shares of the Company are listed on theKarachi, Lahore and Islamabad stock exchanges in Pakistan. The Company isprincipally engaged in exploration, production and sale of hydrocarbons. The gasprice mechanism is governed by Mari Gas Well Head Price Agreement ("theAgreement") dated December 22, 1985 between the President of Islamic Republic ofPakistan and the Company. The registered office of the Company is situated at 21Mauve Area, 3rd Road, G-10/4, Islamabad.

2. STATEMENT OF COMPLIANCEThis condensed interim financial information of the Company for the nine monthsended March 31, 2013 has been prepared in accordance with the requirements of theInternational Accounting Standard 34 - Interim Financial Reporting and provisions ofand directives issued under the Companies Ordinance, 1984. In case requirementsdiffer, the provisions or directives issued under the Companies Ordinance, 1984 shallprevail.

3. ACCOUNTING POLICIESThe accounting policies and the methods of computation adopted in the preparationof this condensed interim financial information are the same as those applied in thepreparation of the financial statements for the year ended June 30, 2012.

4. GAS PRICE MECHANISMIn terms of the Agreement, well head gas price for gas sale from Mari Field for eachensuing year is determined in accordance with the principles of gas price formula setout in Article II of the Agreement. The Agreement states that the gas price will be at theminimum level to ensure that total revenues generated from sale of gas and otherincome are sufficient to provide a minimum return of 30%, net of all taxes, onShareholders' Funds (as defined in the Agreement) after maintaining specified ratiosand deductibles. The return to shareholders is to be escalated in the event of increasein the Company's production beyond the level of 425 MMSCFD at the rate of 1%, net ofall taxes, on Shareholders' Funds for each additional 20 MMSCFD of gas or equivalent oilproduced, prorated for part thereof on an annual basis, subject to a maximum of 45%.Effective July 01, 2001, the Government of Pakistan (GoP) has authorized the Companyto incur expenditure not exceeding Rupee equivalent of US$ 20,000,000 per annum or30% of the Company's annual gross sales revenue as disclosed in the last auditedfinancial statements, whichever is less, in connection with exploration anddevelopment in any concession area other than Mari Field, provided that if suchexploration and development results in additional gas or equivalent oil production, therevenues generated from such additional gas or equivalent oil production shall becredited to and treated as revenue under the Agreement. The revenues from sale of gas and crude / condensate from fields other than Mari Field are determined as per theapplicable Petroleum Policy / Petroleum Concession Agreement. Effective January 01,2012, the Economic Coordination Committee of the cabinet gave its approval forenhancing the limit of US$ 20,000,000 per annum by US$ 5,000,000 each year upto US$40,000,000 per annum over a period of four years.

MARI PETROLEUM COMPANY LIMITED(FORMERLY, MARI GAS COMPANY LIMITED)

SELECTED EXPLANATORY NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)

FOR NINE MONTHS ENDED MARCH 31, 2013

18 MARI PETROLEUM COMPANY LIMITED

5. UNDISTRIBUTED PERCENTAGE RETURN RESERVEThe amount held in this reserve represents the balance of the percentage returnreserve on Shareholders' Funds as defined in the Agreement.

6. PROFIT AND LOSS ACCOUNTThe amount of Rs 7,004.975 million (June 30, 2012: Rs 5,986.939 million) represents the following:

6.1 Undistributable balanceThe amount of Rs 6,808.876 million (June 30, 2012: Rs 5,922.076 million), which isnot distributable, has been provided through the operation of Article II of theAgreement to meet the obligations and to the extent indicated for the following:

19

5,657,30590,234

174,537

5,922,076

886,800-

-

886,800

6,544,10590,234

174,537

6,808,876

5,354,192 567,884 5,922,076

196,099 64,863

31.03.2013 30.06.2012

(Rupees in thousand)


6.2

Funds for nine months ended March 31, 2013. The additional return of Rs 64.863million @ 7.06% for the year ended June 30, 2012 has been paid in the currentperiod.

6.3 Gas Development Surcharge related to Pakistan Electric Power Company(PEPCO) will be paid to the Government as and when related amounts arereceived from PEPCO. Accordingly, Rs 10,237 million (June 30, 2012: Rs 7,815million) receivable from PEPCO on this account and the amount of Rs 9,960 million(June 30, 2012: Rs 7,805 million) payable to the Government have not been takeninto account for the purpose of calculation of current ratio and consequentialadjustment under provisions of clause 2.1 (c) of the Agreement.

Distributable balance

This represents balance guaranteed return @ 37.83% per annum on Shareholders'

Undistributed guaranteed return

7.1 The Company arranged a Syndicated Term Finance Loan amounting to Rs 1,900million from a consortium of banks led by Bank Alfalah Limited for financing of drillingof three wells in Mari Deep, Goru B reservoirs. The mark-up is payable semi-annually inarrears on the outstanding facility amount at six months KIBOR + 1.35% per annum. Theeffective mark-up rate for the period ended March 31, 2013 was 12.27% per annum (June 30, 2012: 14.60% per annum). The loan is repayable in ten equal semi-annual installments after a grace period of 24 months from the date of first disbursement. Sixinstallments amounting to Rs 1,140 million have been paid upto March 31, 2013 (June30, 2012: Rs 760 million). Loan is secured by a first pari passu charge by way ofhypothecation over all present and future fixed and current assets and businesses,and first pari passu equitable mortgage over Company's all existing and futureimmovable properties of an amount of Rs 4.67 billion.

7.2 In order to finance Zarghun Gas Field, the Company arranged another Term FinanceLoan of Rs 1,112 million from Habib Bank Limited. Out of loan amount, a sum of Rs 600million has been disbursed upto March 31, 2013. The mark-up is payable semi-annuallyin arrears on the outstanding facility amount at the average of the six months KIBOR +1.35% per annum. The effective mark-up rate for the period ended March 31, 2013was 11.98% per annum (June 30, 2012: 14.16% per annum). The loan is repayable in ten

20

7. LONG TERM FINANCING - SECURED

Loan for Mari field development 7.1

Opening balanceAmount repaid during the period / year

Closing balance

Long term financing

7.2

Opening balance

Amount received during the period / year

Amount repaid during the period / year

Closing balance

Long term financing

Long term financing

1,140,000 (380,000)

760,000

(380,000)

380,000

248,889

300,000

(105,079)

443,810

(147,937)

295,873

675,873

1,520,000 (380,000)

1,140,000

(380,000)

760,000

200,000

100,000

(51,111)

248,889

(62,222)

186,667

946,667

Current maturity of long term financing

Current maturity of long term financing

Loan for Zarghun field development


21

320,604

1,039,120

30,966

134,033

7,157

54,444

15,652,206

729,360

127,238

1,627,203

563,573

183,911

196,436

53,562

724,249

1,383,432

22,827,494

equal semi-annual installments after a grace period of 24 months from the date of firstdisbursement. Four installments amounting to Rs 156.19 million have been paid upto March 31, 2013 (June 30, 2012: Rs 51.11 million). Loan is secured by a first pari passucharge over present and future assets of the Company by way of hypothecation,equitable mortgage and floating charge of an amount of Rs 2.12 billion.

4,562,425 4,257,659

112,848 105,946

89,408 52,003

4,764,681 4,415,608

408,357

333,539

15,638

137,498

6,640

92,714

11,398,283

654,887

123,956

1,306,728

457,732

141,957

353,840

110,512

408,393

-

15,950,674


22

9.1 The Company has deferred recognition of interest income of Rs 1,003.195million (June 30, 2012: Rs 420.896 million) on amounts due from FoundationPower Company Daharki Limited and has also deferred recognition of relatedinterest expense of Rs 278.946 million (June 30, 2012: Rs 12.503 million) payableto the GoP on account of late payment of Gas Development Surcharge till theresolution of circular debt in the oil and gas industry.

10. CONTINGENCIES AND COMMITMENTS

10.1 Contingencies

Due to circular debt in the oil and gas industry and instructions of the GoP, theCompany has not recognized interest income of Rs 5,246.764 million (June 30,2012: Rs 4,121.829 million) on amounts due from PEPCO and has also not madeany provision in this condensed interim financial information for related interestexpense of Rs 2,813.536 million (June 30, 2012: Rs 2,005.041 million) payable tothe GoP on account of late payment of Gas Development Surcharge.However, such non - recognition does not affect the current period or future years' profit after taxation which includes the guaranteed return toshareholders under the Agreement.

(ii) Indemnity bonds given to Collector of Customs against duty concessions onimport of vehicles amounted to Rs 5.225 million ( June 30, 2012: Rs 5.225 million).

(I)

3,801,4372,443,663

6,245,100

25,87654,469

80,345

3,561,4711,016,380

4,577,851

27,28959,154

86,443


23

11. PROPERTY, PLANT AND EQUIPMENT

Opening book value

Movement during the period / year:

Additions

Written down value of disposals

Depreciation charge

Closing book value

4,472,186

703,375-

(33)

(367,674)

4,807,854

4,787,239

432,329

(285,401)

(243)

(461,738)

4,472,186

12. DEVELOPMENT AND PRODUCTION ASSETS

Opening book value 3,424,616


Additions 90,289

Amortization charge (112,818)

Closing book value 3,402,087

3,392,447

177,138

(144,969)

3,424,616

Transferred to exploration and evaluation assets

13. EXPLORATION AND EVALUATION ASSETS


Closing (Note 13.1)balance370,253

4,520,662

Opening balance 4,150,409 4,057,194

Additions 554,494 1,203,621

Transferred from property, plant and equipment - 285,401

Cost of dry and abandoned wells written off - (313,483)

Impairment charge (126,157) (938,895)

Depreciation charge (58,084) (143,429)

93,2154,150,409


24

1,197,2101,253,252

744,106415,994

1003,610,662

909,454

Ziarat blockSujawal blockSukkur blockHanna block

Share in joint ventures operated by others

Hala blockKohat blockOman block 546

910,000

4,520,662

1,200,6431,139,678

461,502395,678

-

3,197,501

940,88811,474

546

952,908

4,150,409


31.03.2013 30.06.2012

Advances for purchase of vehicles and equipment 347,427 -

Other costs 6,248 -353,675 -

(Rupees in thousand)

14. INVESTMENT IN MARI SEISMIC UNIT

The GoP has allowed a one time cost not exceeding Rs 920 million for 3D seismicsurvey project and thereafter the project will be run on self financing basis. All futurerevenues from this project will be credited to Mari GPA to the extent of GoP's share.The amount allowed as part of gas price, under this head, has been reflected as anon distributable special reserve representing the Government's investment for theproject.

25MARI PETROLEUM COMPANY LIMITED

15. TRADE DEBTS Due from related parties - considered good

Pakistan Electric Power Company 10,236,914 7,815,079Foundation Power Company Daharki Limited 7,517,408 4,560,818Fauji Fertilizer Company Limited 1,172,464 1,141,376Sui Southern Gas Company Limited 96,877 35,666Sui Northern Gas Pipelines Limited 206,745 105,401Foundation Gas 6,019 19,377

19,236,427 13,677,717Due from others - considered goodEngro Fertilizer Limited 465,870 410,636Fatima Fertilizer Company Limited 216,102 184,731Byco Petroleum Pakistan Limited 614,192 614,192National Refinery Limited 161,968 112,339Attock Refinery Limited 351,285 151,870

21,045,844 15,151,485

15.1 Trade debts include overdue amounts of Rs 16,352.023 million (June 30, 2012:Rs 11,438.492 million). Based on the measures being undertaken by the GoP to resolvethe Inter-Corporate Circular Debt, the Company considers the above amounts to befully recoverable.

16.

43,949 -24,475 -

- 69,801

1,003,195 420,896

61,254 33,912

728,662 369,89997,350 28,84423,455 17,216

- 679,564

19,681 9,656

2,002,021 1,629,788

Due from related partiesRig rentals - Ziarat joint venture

Rig rentals - Zarghun joint ventureRig rentals - Sukkur joint venture

Due from othersLoans and advancesShort term prepaymentsInterest accruedReceivable under Mari Gas Well Head Price AgreementOther receivables

Interest on delayed payments - Foundation Power Company Daharki LimitedRental income from line heaters - Foundation Power Company Daharki Limited

LOANS, ADVANCES, PREPAYMENTS AND OTHER RECEIVABLES

Mari Field Sukkur block Hala block Kohat block

15,393,086 14,348,017 45,252,636 31,479,892

7,505

26

85,596142,730

12,482

109,23457,665

5,099

38,70236,1403,983

Mari Field 120,531 58,666 270,788 190,253

Hala block 41,499 60,953 116,714 213,471 Kohat block 350 1,100 586 2,432

Sujawal block 11,905 - 11,905 -

174,285 120,719 399,993 406,156

17.1 15,393,086 14,348,017 45,252,636 31,479,892

17.2 382,942 271,973 1,199,304 292,7869,711 600 33,283 1,435

17.3

17.4

17. GROSS SALES TO CUSTOMERS

Sale of: Gas

Crude Oil Less:Transportation charges

Condensate Less:Transportation charges

LPG Own consumption

17.1 This represents sale of gas from:

17.2 This represents sale of crude oil from:- - - 3,018 Ziarat block

Karak block 382,942 271,973 1,199,304 289,768382,942 271,973 1,199,304 292,786

17.3

17.4 This represents sale of LPG from Hala block.

This represents sale of condensate from:


174,285 120,719 399,993 406,1561,905 1,840 8,934 6,575

15,958,392 14,788,993 46,876,378 32,344,449

15,259,651 14,269,192 44,995,160 31,239,08436,48711,062

40885,478 - 85,478 -

373,231 271,373 1,166,021 291,351

172,380 118,879 391,059 399,58112,190 47,643 47,305 162,514

3,081 19,357 11,111

Sujawal block

27

18. OPERATING EXPENSESSalaries, wages and benefits 464,496 396,645 1,154,697 1,010,538Rent, rates and taxes 3,503 1,053 7,276 8,622Legal and professional services 476 288 2,319 1,764Fuel, light, power and water 20,304 21,566 63,943 66,765Maintenance and repairs 57,369 46,656 156,755 103,940Insurance 11,612 11,717 34,140 31,673Depreciation 148,345 106,106 425,758 336,943Amortization 37,610 76,514 112,818 229,487Employees medical and welfare 49,591 28,698 120,847 88,096Field and other services 94,921 70,168 297,192 246,523Travelling 3,466 432 17,249 9,635Communications 2,578 2,487 8,196 8,966Printing and stationery 1,547 2,156 7,124 6,689Office supplies 1,424 1,723 4,243 5,617Technical software 1,898 5,297 12,681 18,001Auditor's remuneration 490 1,512 2,436 1,803Mobile dispensary and social welfare 24,722 17,586 60,928 56,849Training 9,546 13,149 24,262 21,922Seismic re-processing 390 - 25,836 -Advertisement 5,305 951 6,157 2,383Books and periodicals 467 364 766 581Public relations and social activities 2,444 366 4,266 3,340Directors' fee and expenses 2,663 1,186 5,734 2,239Freight and transportation 2,405 2,293 4,434 2,529Subscription 104 213 1,875 1,980Rig 83,282 56,813 193,626 204,073Research and development 5,701 9,375 42,625 9,375

Mar

i Gas

Com

pan

y L

imit

ed

Sukkur block 9,137 7,033 34,147 24,812Hala block 30,299 74,315 98,618 120,721Kohat block 5,529 1,535 11,142 21,780Karak block 4,631 25,183 165,667 33,872Miscellaneous 934 1,108 4,566 2,000

1,087,189 984,488 3,112,323 2,683,518Less: Recoveries from joint ventures 134,555 62,803 379,372 221,065

952,634 921,685 2,732,951 2,462,453


28

20. OTHER OPERATING INCOME

Rig rental income 44,149 - 69,916 217,696

Line heaters rental income 10,152 8,163 27,342 28,578

Caravans rental income 6,660 - 15,596 -

Miscellaneous 47,928 4,898 60,585 19,234

108,889 13,061 173,439 265,508

21. FINANCE COSTS

Mark-up on long term financing - secured 40,238 46,835 119,896 152,988

- - 289,754 268,159

Interest on Workers' Profit Participation Fund - - 4,973 11,100

Bank charges 51 29 180 167

40,289 46,864 414,803 432,414

22. PROVISION FOR TAXATION

Current 1,043,178 288,227 2,029,255 768,507Deferred (186,862) (65,724) (631,370) (205,939)

856,316 222,503 1,397,885 562,568

Unwinding of discount on provision for decommissioning cost

Prospecting expenditure 444,721 74,477 1,120,134 268,618

Impairment of well cost 3,672 - 126,157 -

448,393 74,477 1,246,291 268,618

19. EXPLORATION AND PROSPECTING EXPENDITURE

Exploration and prospecting expenditure comprises of:


23. TRANSACTIONS WITH RELATED PARTIES

Gross sales of gas and LPG to related parties is as follows:

Pakistan Electric Power Company 7,979,334 6,261,481Foundation Power Company Daharki Limited 5,375,871 3,938,682

Fauji Fertilizer Company Limited 20,345,453 12,898,508

Sui Southern Gas Company Limited 160,395 153,329

Sui Northern Gas Pipelines Limited 650,057 132,244

Foundation Gas 47,305 162,514

27,342 28,578

582,299 160,501

Remuneration of chief executive and key management personnel 823,154 666,213

Contribution to employee benefit funds 157,845 116,395

Deferred interest income on delayed payments - Foundation Power Company Daharki Limited

Other income on rental of line heaters - Foundation Power CompanyDaharki Limited

29

24. OPERATING SEGMENTS

This condensed interim financial information has been prepared on the basis of asingle reportable segment. Revenue from external customers for products of theCompany is disclosed in note 17.

Revenue from five major customers of the Company constitutes 95% of the totalrevenue during the period ended March 31, 2013 (March 31, 2012: 96%).

25. DATE OF AUTHORIZATION FOR ISSUE

This condensed interim financial information was authorized for issue by the Boardof Directors of the Company on April 29, 2013.




Karachi Liaison Office: D-87, Block-4, KehkashanClifton, Karachi-75600, PakistanUAN: +92-21-111-410-410Fax: +92-21-35870273P.O. Box No. 3887

Daharki Field Office: Daharki, District Ghotki, PakistanUAN: +92-723-111-410-410Fax: +92-723-641038

Quetta Liaison Office: 26, Survey-31Defence Officers Housing Scheme,Airport Road, Quetta.Tel: +92-81-2821052, 2839790Fax: +92-81-2834465

Head Office: 21 Mauve Area, 3rd Road, G-10/4, P.O.Box No.1614

Islamabad-44000, PakistanUAN: +92-51-111-410-410 Fax: +92-51-2352859

Documents

Interim Financial Information (Un-audited)...Case study depicting the corrosion effects at current production rates without inhibition has been carried out on the basis of high CO2