Aban Offshore plunges on rig collapse reports

MUMBAI: Shares of Aban Offshore plunged on Friday reacting reports that its Venezuelan offshore natural gas platform sank into the sea on Thursday, leading to concerns among analysts over its impact on the company’s prospects. The semi-submersible rig Aban Pearle — which contributed 10-12% to the firm’s turnover — collapsed due to a failure in the operating system, prompting evacuation of all workers aboard the rig.

At 10 am, the scrip was at Rs 846.60, down Rs 170.45 or 16.76 per cent on the NSE. It touched a low of Rs 810 and high of Rs 980 in early trade.

“All 95 workers aboard were rescued and are safe. Aban Pearl was deployed in Venezuela with PDVSA at a gross rate of $350,000/day and net rate of USD 290,000/day. This contract, which began in February 2010, was to last for five years. We are awaiting the official confirmation from PDVSA/ Aban Offshore.

The Aban Pearl accident and potential loss (if any, when confirmed by the company) will be a significant negative. It may lower cashflows and debt repayment. Our last fair value for the stock was INR 1,450/share. If rig is lost, our fair value may reduce to INR 980-1,000/share. We have currently put the stock ‘UNDER REVIEW’,” the Edelweiss report said.