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Reliance Industries (Shale acreage - unattractive at soft NG price, ADD):
Our analysis of RIL’s shale gas JVs indicates that while ramp-up in production and sales are de-risked under JV commitments, profitability of the operations is meaningful only at gas price of US$6/mmbtu. Thus, while RIL’s share of shale gas production in the US is expected to reach 31mmboe in CY13, we see the company’s shale gas operations contributing only US$308m to its EBIT by CY13ii at current gas prices. At US$7/mmbtu, shale gas would contribute US$537m to RIL’s CY13ii EBIT.
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