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Reliance Industries
FY13 D6 prod may fall to 47mmscmd
RIL has submitted to DGH that the gas production from KG-D6 may fall to
47mmscmd in FY13. Further the five new wells proposed to be drilled up to FY13
can't be brought to production until mid 2014.
! As per Indian Petro (a publication we subscribe to), RIL has submitted to DGH that gas
production from the KG-D6 fields may fall to 47mmscmd in FY13 from the current levels of
51-52mmscmd. This is in reply to earlier comments by DGH that the gas production from KGD6 would rise to 67mmscmd in April 2011. RIL is attributing increasing water cut trends in the
wells which could bring down the production further.
! RIL's submission is however silent on production levels in FY12. However on 11 February
2011, its partner in the block, Niko Resources had stated the following: "Niko has now
received the operator's volume forecast for the fiscal year ended March 31, 2012. The
forecast predicts that volumes during the period will remain flat at current production levels.
The forecast has been approved by Niko and the operator and has been forwarded to the
Director General of Hydrocarbons". While the level of production wasn't specified in the Niko
statement, we have interpreted it as 51-52mmscmd.
! RIL has further stated that the five new wells proposed to be drilled up to FY13 can't be
brought to production until mid 2014.
! Our current estimates assume KG-D6 gas production at 60 mmscmd both in FY12 & FY13.
Every 10% change in gross output impacts our FY13F EPS by 1.4%. Consequently decline in
gas production to 47mmscmd would negatively impact our FY13 EPS estimates by 3.03%.
! Note that post the announcement of the deal with BP, we have benchmarked RIL's E&P
business covered in the deal to deal valuation. As such it would not have any impact on our
E&P valuation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Reliance Industries
FY13 D6 prod may fall to 47mmscmd
RIL has submitted to DGH that the gas production from KG-D6 may fall to
47mmscmd in FY13. Further the five new wells proposed to be drilled up to FY13
can't be brought to production until mid 2014.
! As per Indian Petro (a publication we subscribe to), RIL has submitted to DGH that gas
production from the KG-D6 fields may fall to 47mmscmd in FY13 from the current levels of
51-52mmscmd. This is in reply to earlier comments by DGH that the gas production from KGD6 would rise to 67mmscmd in April 2011. RIL is attributing increasing water cut trends in the
wells which could bring down the production further.
! RIL's submission is however silent on production levels in FY12. However on 11 February
2011, its partner in the block, Niko Resources had stated the following: "Niko has now
received the operator's volume forecast for the fiscal year ended March 31, 2012. The
forecast predicts that volumes during the period will remain flat at current production levels.
The forecast has been approved by Niko and the operator and has been forwarded to the
Director General of Hydrocarbons". While the level of production wasn't specified in the Niko
statement, we have interpreted it as 51-52mmscmd.
! RIL has further stated that the five new wells proposed to be drilled up to FY13 can't be
brought to production until mid 2014.
! Our current estimates assume KG-D6 gas production at 60 mmscmd both in FY12 & FY13.
Every 10% change in gross output impacts our FY13F EPS by 1.4%. Consequently decline in
gas production to 47mmscmd would negatively impact our FY13 EPS estimates by 3.03%.
! Note that post the announcement of the deal with BP, we have benchmarked RIL's E&P
business covered in the deal to deal valuation. As such it would not have any impact on our
E&P valuation.
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