Company Watch- Oil & Natural Gas Corp Ltd (ONGC)
Company Website
ongcindia.com
Crude price hikes push ONGC ahead
OIL & Natural Gas Corporation (ONGC) is set to improve its pre-tax profits by a whopping Rs 3,405 crore (US$792 mil) in the current fiscal, just on account of a rise in crude prices. Crude prices have hit a high of $19.9 recently. ONGC had recorded revenues of Rs 14,962 crore (US$3.5 billion) and a net profit of Rs 2,754.50 crore (US$641 million) in fiscal 1998-99.
Analysts at HSBC have estimated that ONGC gains by Rs 870 crore in pre-tax profits for every $1 rise in international crude prices. In the current fiscal, ONGC would receive 77.5 per cent of the prevailing international prices. In the next fiscal, it would receive 80 per cent of the prevailing international price. This would be followed by full parity with international prices from year 2002.
The current production of crude by ONGC is pegged at 27 million tonne, equivalent to 198 million barrels . The costs for ONGC remains constant and does not move with change in oil prices. It is also protected from the sharp fall in international prices by a floor level, placed at $11.10 now. For most of the previous fiscal (1998-99), ONGC got a floor price of Rs 3,649 per tonne, equivalent of $11.10 per barrel.
With international crude prices having risen to $19.50 per barrel, ONGC would receive $15.11 per barrel of crude. As it received $11.10 per barrel on an average in the previous fiscal, the gain would translate to $4 per barrel. This implies a gain of Rs 3,405 crore in pre-tax profits this fiscal.
With an equity capital of Rs 1,425 crore, this would imply a straight jump of Rs 15 in its EPS, after adjusting for tax. It enjoys a book value of above Rs 160 per share. Stock closed at Rs 254.85 on 8/20/99 on NSE and Rs.265.60 on BSE.
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Aug.15,1999 Nes Flash from Economic Times
ONGC strikes oil in AP
ONGC has struck oil in a well in deepwater in the Krishna-Godavari offshore basin. The well is located 24 km north east of the Amalapuram coast of Andhra Pradesh.(Details not available at this time). |
