India-focused producer Indus Gas is set to ramp up production at its SGL field in Rajasthan. Having drilled four additional wells, the company plans to boost output to its phase II target of 34m cubic feet of gas per day (mcf/day), the contracted output volume that the company expects to achieve by the end of March. In the six month to end September, Indus maintained production at around 7 mcf/day from phase I of the development.
Over the 12-year expected life of the field, Indus expects to drill at least 14 wells and expand output in a modular way to meet future contractual obligations and optimise production from the field. The company is also looking to diversify the customers for its gas beyond the Ramgarh power plant, although that plant offers meaningful growth potential through its 160 megawatt expansion.
Meanwhile, Indus continues to drill further wells as it looks to expand coverage across the block before the appraisal period expires in 2013. Most of the rig time has to date been dedicated to drilling rather than testing, although at the Eastern Promise discovery, a well test flowed 8 mcf/day. More rig time will be dedicated to testing ahead of the planned competent person's report this year.
Broker Arden Partners is forecasting a full-year loss of $1.7m, and loss per share of 1¢.
| INDUS GAS (INDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 710p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 696-725p | 12-MONTH HIGH: | 820p | LOW: 545p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 31¢* | NET DEBT: | 150% | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.22 | -2.95 | -2.00 | nil |
| 2011 | 3.58 | -0.82 | nil | nil |
| % change | +1567 | - | - | - |
*Includes intangible assets of $27m, or 15¢ a share £1=US$1.56 | ||||
