ONGC gains on plan to invest Rs 5700 crore in Mumbai High

ONGC rose 1.51% to Rs 417.25 at 9:23 IST on BSE after the company said it will invest over Rs 5700 crore in redevelopment of its giant Mumbai High (North) oil and gas field.

The company made the announcement after market hours on Friday, 27 June 2014.

Meanwhile, the BSE Sensex was up 186.71 points, or 0.74%, to 25,286.63.

On BSE, so far 52,000 shares were traded in the counter, compared with an average volume of 6.24 lakh shares in the past one quarter.

The stock hit a high of Rs 418 and a low of Rs 415.40 so far during the day. The stock hit a 52-week high of Rs 472 on 9 June 2014. The stock hit a 52-week low of Rs 234.40 on 28 August 2013.

The stock had outperformed the market over the past one month till 27 June 2014, 3.89% compared with 2.24% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 24.79% as against Sensex's 12.99% rise.

The large-cap company has an equity capital of Rs 4277.74 crore. Face value per share is Rs 5.

ONGC said that its board has approved the proposal for redevelopment of its giant offshore field - Mumbai High (North) involving a capital investment of Rs 5706.47 crore, including foreign exchange component of Rs 4421.76 crore ($743.15 million at exchange rate of Rs 59.501USD). The implementation of the project will lead to incremental gain of 6.997 million tonne (MMT) crude oil and 5.253 billion cubic metres (BCM) gas by 2030. This project is designed to carry forward the success of the previous two editions of redevelopment projects and give a new lease of life to the giant field which is so vital for the economy of the country, ONGC said. The total CAPEX includes creation of surface facilities for Rs 2586.42 crore, new oil and gas wells for Rs 1992.11 crore and sidetracking of existing wells for Rs 1127.94 crore.

ONGC's board has also taken note of a new pool discovery at Gandhar #699 which has already been notified to DGH. This new pool discovery in GS-6B sand in the south western part of Gandhar field opens up the sector for further field growth, ONGC said. Exploratory well Gandhar # 699 in Gandhar Ext-VI PML, Western Onshore Basin in Gujarat, was drilled to a depth of 2904 m. The interval 2580 2577m in Hazad Member of Ankleshwar formation of Middle Eocene age, on conventional testing, produced oil at a rate of 38 m3/day and gas at 20,069 scmd (standard cubic meter per day). With this, ONGC has notified 5 new discoveries during the financial year 2014-15, ONGC said in a statement.

ONGC's net profit surged 44.3% to Rs 4889 crore on 2.3% decline in gross revenue to Rs 21403 crore in Q4 March 2014 over Q4 March 2013.

ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas. The corporation is the biggest public sector commercial organization in India with current market capitalization of about $60 billion. The Indian government holds a 68.94% stake in ONGC (as on 31 March 2014).

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