ONGC inches up after board's nod for investment

ONGC rose 0.61% to Rs 437.80 at 9:17 IST on BSE after the company said it will be investing Rs 5219 crore towards Daman Development project to enhance production of natural gas and condensate in its Tapti Daman Block in Arabian sea.

The announcement was made after market hours on Thursday, 28 August 2014. The stock market was closed on Friday, 29 August 2014, on account of Ganesh Chaturthi.

Meanwhile, the S&P BSE Sensex was up 166.53 points or 0.63% at 26,804.64.

On BSE, so far 14,000 shares were traded in the counter as against average daily volume of 7.25 lakh shares in the past one quarter.

The stock hit a high of Rs 440 and a low of Rs 437.05 so far during the day. The stock had hit a record high of Rs 472 on 9 June 2014. The stock had 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 28 August 2014, jumping 10.09% compared with Sensex's 2.49% rise. The scrip had also outperformed the market in past one quarter, advancing 13.07% as against Sensex's 8.48% rise.

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

ONGC said that the investment decision has been approved by the company's board in its 260th meeting on 28 August 2014. The project is located about 90-100 km from Daman coast and includes additional development of C-24 field and monetization of B-12 marginal fields (B-12-11, B-12-13 and B-12-15), ONGC said in a statement.

ONGC said that the production is expected by July 2016 with peak production rate of 8.35 MMSCMD of gas and 9,286 barrels of condensate per day. The cumulative production till 2034-35 is pegged at 27.67 billion cubic meters (BCM) of gas and 5.01 million cubic meters (MMm3) of condensate, ONGC said. The gas and condensate will be evacuated to Hazira through Tapti Process facilities of Tapti-JV.

ONGC said that the project envisages installation of seven well head platforms, one riser platform with associated pipelines and drilling of 28 wells. The project is scheduled for completion by pre-monsoon 2019, ONGC said in a statement.

Coming close on the heels of the Mumbai High South Redevelopment project (Phase-3) approved in the last board meeting earlier this month for Rs 5813 crore, this approval flags the oil major's aggressive investment posture to ramp up production from the Western Offshore.

ONGC's net profit rose 19.1% to Rs 4781.79 crore on 13.2% growth in net sales to Rs 21747 crore in Q1 June 2014 over Q1 June 2013.

ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas.

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