Notes on INDI from Global Energy Conference

6th Dec '09 by Andrew Sibel

2 comments 3109 reads

Hi, I have written up some notes from the Indus Gas presentation at the Global Energy Conference. This is not a business I know that well and the information on the website is relatively sparse, so please bear this in mind when reviewing the notes. I welcome any comments from those who know the business better.

International oil and gas exploration and development company focused on India.
The Group has an interest in a petroleum concession located in a 4,026 km2 on-shore area in mid Indus Basin, Rajasthan, India, known as Block RJ-ON/6. The Indus Basin straddles eastern Pakistan and western India
Given's India significant growth rate in energy demand and growing energy deficit, Indus is excited about combining the rock potential of Middle Indus Pakistan with the attractive gas market of India
Multi well driilling programme underway with 15 exploration wells in the last 14 months, 2 declared gas discoveries, 5 gas shows and 2 wells awaiting testing.
Penultimate company to float on AIM before the markets imploded - see AIM Admission Document
The PSC goes back to June 1998. Initially, this contract was signed between Government of India (GOI), Focus Energy Limited (Focus) and Oil and Natural Gas Corporation (ONGC). Focus assigned a 90 per cent. interest to Indus in January 2006.
There have been 2 periods of exploration and the third period runs until May 2011 (unless they have a confirmed extension of 2 further years to 2013)

Block RJ-ON/6

The block is up on the Pakistan border in the Indus Basin in Pakistan. Currently across the border, they have the OMV & ENI teams playing in the space (http://www.rigzone.com/news/article.asp?a_id=75472)
The block was originally 5000 km2 but, post relinquishment, there are about 4000 km2 in the block. Indus have effectively drilled and surveyed around 30% of that area. The Company have seen little success in the bottom right hand corner of their block so that is the main candidate for relinquishment as they go to the end of their third period.
Production discoveries to date have been in the Pariwar formation, a Early Cretaceous play. They are now drilling and about to have fraccing in a tight gas play in the B and B formation
Indus owns a 90% participating interest in the Block, excluding the SGL gas field, in which it has a…

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davjo

6th Dec '09

G'day Andrew

Interesting read..thanks :-)

Have to say straight off, this isn't the sort of E&P for me at all...Indian producing gas and explo prospects in tight reservoirs dependent on fraccing....

A couple of fleeting observations :-

uplift in their SGL field of 37% to have a OGIP of 328m and recoverable reserve of 246 million.

"million" should read BCF. In this case translates as 37% of 41mmboe(one sixth of 246), i.e. 2Ps of 15mmboe net.

Bearing that in mind and glancing up to the top right hand corner of the page, I'm left gobsmacked at that m/cap!!!!!!!!! It must be that Rajasthan address ;-)

Andrew Sibel

7th Dec '09

Thanks Davjo for pointing that typo out. You're quite right that it should have been BCF - I wasn't thinking. The 37% was a reserve increase on the previous estimate though, not sure if that was clear? So I think the 2P would be 41mm BoE net, not 15.

Following the analysis of new 3D seismic data, which provided much better
understanding of the discovery compared to previous 2D data, the
Management Committee have approved an increase gross (100%) original
gas in place (OGIP) estimate of 328 BCF, with "Proven plus Probable" well
head gas reserves of 246 BCF. The previously approved OGIP and
reserves were 238.76 BCF and 179 BCF respectfully.

That still makes the valuation heady. It's all about the B&B formation I guess. The impression was that they felt that they were sitting on something major there but it was just too early to comment, so it's hard to make much sense of the numbers. Someone out there must be a big believer! :-)

Notes on INDI from Global Energy Conference

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Andrew Sibel

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