ONGC extends gains after subsidiary strikes oil in Colombia

ONGC rose 2.17% to Rs 91.8 after the company's wholly owned overseas arm ONGC Videsh, made a significant oil discovery in its onshore block CPO-5 in Llanos Basin in Colombia.

Shares of ONGC have added nearly 17% in five trading days from its previous closing low of Rs 78.5 on 27 November 2020. The stock is 45.3% away from its 52-week high of Rs 133.4 registered on 3 January 2020. The counter is up 77.22% from its 52-week low of Rs 51.8 hit on 13 March 2020

On the technical front, the stock's RSI (relative strength index) stood at 82.118. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock is trading above its 50 and 100 days simple moving average placed at 71.70 and 74.66 respectively. These levels will act as crucial support zones in near term.

ONGC Videsh on Friday announced that it has made a "significant" strike of oil in its onshore block CPO-5 in Llanos Basin in Colombia. The light oil was discovered in the first well Indico-1X in the Indico field during December 2018, and to-date it has demonstrated a sustained flow at 5200 BOPD with a cumulative production of over three million barrels of oil so far.

CPO-5 is a large onland block covering 1,992 square kilometer (SKM) and offers exploratory and appraisal opportunities. This is the fourth commercial find in the block by OVL, which now plans to drill more wells to explore other plays in the block in immediate future.

OVL holds participating interest in seven exploratory blocks in Colombia in addition to two producing blocks with 50% stake in a joint venture company Mansarovar Energy Colombia.

ONGC is India's largest integrated oil and gas company. ONGC is 60.41% owned by the Government of India (as on 30 September 2020).

The state-run oil major's consolidated net profit fell 19% to Rs 4335 crore on 17.7% decline in net sales to Rs 83,619.16 crore in Q2 September 2020 over Q2 September 2019.

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