2025-11-17 04:40:31
Latest Post
Ola Electric Commences Test Rides of 4680 Bharat Cell-Powered Vehicles at Flagship Stores Across India
Jindal Explorer rig commences operations with ONGC
Precision Electronics Ltd awarded order by Government Entity
Karnataka Bank appoints Veteran Banker Mr Raghavendra S Bhat as its New Managing Director & CEO
Websol signs MoU with Andhra Pradesh Economic Development Board
Research
Cairn India - Visit to the prolific Rajasthan block - ElaraCapital
Posted On : 2014-03-09 10:19:33( TIMEZONE : IST )
Mangala processing terminal to be expanded
Cairn India (CAIR IN) MPT has already been operating with more than 100% of its nameplate capacity of 680,000 bpd of oil and water. It is being expanded to 1 mnbpd with addition of pumps, tanks, boilers and associated facilities and is expected to be completed in a year. However, as EOR commercial production commences in FY16, water cut is expected to decline.
Export terminal to boost realization
With completion of the last leg of the exports pipeline within 4-5 months, access to India's coastal refineries would help increase realization. Further, management says crude is more suitable for Japan's refineries. As a result, it plans to propose to the government its plan to enter into a crude swap arrangement wherein it could export crude to Japan's refineries, and, in turn, bring equivalent amount of crude to India from other overseas fields.
Miscellaneous
- Bhagyam per well production has been lower due to higher-thanexpected viscosity and lower reservoir pressure. However, drilling of a higher number of wells to take care of the peak production is expected.
- The current commercial sales of gas stands at 9 mmscfd; the company does not envisage any trouble towards extension of the contract beyond 2020.
- With four exploration rigs in place, it is expected to target 50% of gross-risked prospective resources by FY14-end.
- Capex for EOR is USD 600mn; commercial production is expected in FY16; with EOR production, water cut is expected to drop.
- The company is expected to come out with a three-year strategy in a few months.
Valuation – reiterate Buy with a revised TP of INR 418
The company maintains its guidance of exit production of 200,000 boepd from the Rajasthan block. We believe as exploration continues, there will be upgrade in the ultimate recoverable reserves. Polymer injection at Mangala is also expected to start in Q4FY15, which would help sustain production. We reiterate Buy with a TP of INR 418 from INR 420 based on our SOTP method.
