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Anadarko Petroleum, the operator of the Mozambique gas block where
BPCL holds a 10% stake, announced a successful test well, post which
Anadarko expects the block to hold ~10TCF of recoverable gas reserves.
Plans for 2 LNG trains are now being drawn up. While this continues the
positive news flow on BPCL's emerging E&P portfolio, we believe E&P
successes are well discounted in valuations and maintain Neutral rating.
Successful test well in Mozambique: Anadarko Petroleum announced
that the Camarao test well encountered 380 net feet of natural gas play.
This continues successful exploratory/appraisal efforts in the
Mozambique block (4 earlier successful wells).
Now expect 10TCF of recoverable reserves: Anadarko sees static
connectivity between the Camarao well and the previously drilled
Windjammer and Lagosta wells. Anadarko now expects the
Windjammer, Barquentine, Lagosta and Camarao complex to hold
~10TCF of recoverable reserves (6TCF earlier). Anadarko is hopeful of
further upward revisions to resource estimates, post evaluation of 2 new
3D seismic datasets and further exploratory activities. A second drillship
has been mobilized to speed up activities.
2 LNG trains planned: Based on the expanded resource base potential,
2 LNG trains (5mmtpa each) are being planned, with the flexibility to
develop additional trains on further exploration and appraisal results.
E&P newsflow upbeat, but well discounted: While continuing
successes in E&P is sentiment positive, and help de-risk earnings in the
long-term, we believe given the long time-lines and potential geopolitical
risks, the Mozambique E&P option is well-discounted in current
valuations for BPCL (we build Rs55/share). We have made marginal
adjustment to BPCL earnings, updating for FY11 disclosures, but our PT
remains unchanged at Rs715. Near-term risk on higher subsidy sharing
will continue to weigh on the stock, we maintain our Neutral rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Anadarko Petroleum, the operator of the Mozambique gas block where
BPCL holds a 10% stake, announced a successful test well, post which
Anadarko expects the block to hold ~10TCF of recoverable gas reserves.
Plans for 2 LNG trains are now being drawn up. While this continues the
positive news flow on BPCL's emerging E&P portfolio, we believe E&P
successes are well discounted in valuations and maintain Neutral rating.
Successful test well in Mozambique: Anadarko Petroleum announced
that the Camarao test well encountered 380 net feet of natural gas play.
This continues successful exploratory/appraisal efforts in the
Mozambique block (4 earlier successful wells).
Now expect 10TCF of recoverable reserves: Anadarko sees static
connectivity between the Camarao well and the previously drilled
Windjammer and Lagosta wells. Anadarko now expects the
Windjammer, Barquentine, Lagosta and Camarao complex to hold
~10TCF of recoverable reserves (6TCF earlier). Anadarko is hopeful of
further upward revisions to resource estimates, post evaluation of 2 new
3D seismic datasets and further exploratory activities. A second drillship
has been mobilized to speed up activities.
2 LNG trains planned: Based on the expanded resource base potential,
2 LNG trains (5mmtpa each) are being planned, with the flexibility to
develop additional trains on further exploration and appraisal results.
E&P newsflow upbeat, but well discounted: While continuing
successes in E&P is sentiment positive, and help de-risk earnings in the
long-term, we believe given the long time-lines and potential geopolitical
risks, the Mozambique E&P option is well-discounted in current
valuations for BPCL (we build Rs55/share). We have made marginal
adjustment to BPCL earnings, updating for FY11 disclosures, but our PT
remains unchanged at Rs715. Near-term risk on higher subsidy sharing
will continue to weigh on the stock, we maintain our Neutral rating.
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