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Remarks: Selan Exploration (Selan) has rights to develop five small discovered (minimal exploration risk) oil fields (Bakrol,
Lohar, Indrora, Karjisan and Ognaj) in Cambay Basin (Gujarat) with proven oil & gas reserves.
Between FY2006 and FY2009, Selan ramped up its production by 4x. In the next phase (FY2009-11), with
stagnate oil production it did preparatory work to ramp up drilling in the existing fields and the new field,
Indrora (the most prolific one with significant reserves). Currently, the company is waiting for the final approval
for drilling which could ramp up its production significantly in the near future.
Based on this, we expect the company to ramp up its production more than two times by FY2014 over that of
FY2011. It would lead to an earnings growth (CAGR) of 41% during FY2011-13.
At the current market price, the stock trades at a PE of 7.5x and EV/EBITDA of 3.6x based on our FY2013
estimates. We remain bullish on its production ramp-up plan and recommend Buy with a price target of Rs500
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Remarks: Selan Exploration (Selan) has rights to develop five small discovered (minimal exploration risk) oil fields (Bakrol,
Lohar, Indrora, Karjisan and Ognaj) in Cambay Basin (Gujarat) with proven oil & gas reserves.
Between FY2006 and FY2009, Selan ramped up its production by 4x. In the next phase (FY2009-11), with
stagnate oil production it did preparatory work to ramp up drilling in the existing fields and the new field,
Indrora (the most prolific one with significant reserves). Currently, the company is waiting for the final approval
for drilling which could ramp up its production significantly in the near future.
Based on this, we expect the company to ramp up its production more than two times by FY2014 over that of
FY2011. It would lead to an earnings growth (CAGR) of 41% during FY2011-13.
At the current market price, the stock trades at a PE of 7.5x and EV/EBITDA of 3.6x based on our FY2013
estimates. We remain bullish on its production ramp-up plan and recommend Buy with a price target of Rs500
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