BPCL - Another discovery in Mozambique... - ICICIdirect

Bharat PetroResources Ltd (BPRL), a wholly owned subsidiary of Bharat Petroleum Corporation (BPCL), has announced the discovery of a new natural gas accumulation contained within the Offshore Area 1 of the Rovuma Basin. The operator has said that a two well appraisal programme is being designed to define the extent of the Orca field, which will commence after the drilling of the Linguado and Espadarte exploration wells. The proximity of the Orca field to the shore provides additional options and flexibility for potential future developments. The Orca exploration well was drilled to a total depth of approximately 4996 metre in water depths of approximately 1061 metre. The volumes of gas in place and the potential resource base associated with this discovery are yet to be known. The consortium members in the block are Anadarko (36.5%), BRPL (10%), Videocon (10%), PTT Exploration & Production (8.5%) and Mitsui E&P (20%). The balance 15% participating interest is with Empressa Nacional de Hidrocarbonetos (ENH), the national oil company.

While the earnings of the company are dependent on policy issues, the upstream assets in Mozambique and Brazil will drive the value for BPCL. We have valued the Rovuma basin (Mozambique) at Rs. 143.8/share and BM-C-30, Campos Basin (Brazil) at Rs. 22.8/share. We recommend a BUY rating on BPCL with a target price of Rs. 461 (valuation based on average of P/BV multiple: Rs. 487/share and P/E multiple: Rs. 434/share).

Source : Equity Bulls

Keywords