Subscribe to Oil India IPO for long term gains: Networth
Networth Stock Broking has recommended ‘Subscribe’ to Oil India IPO for long term gains.
By ET Bureau |
MUMBAI: Networth Stock Broking has recommended ���Subscribe��� to Oil India IPO for long term gains.
OIL India is a ���Mini - Ratna��� public sector undertaking and is the second largest national Oil & Gas company
as measured by total proved plus probable oil (575mnbbl) and Natural Gas reserves (63.41bcm) and production.
The company has an outstanding track record in the exploration of onshore reserves with its average Reserve
Replacement Ratio being greater than 2 for most of the last 5 years. Finding cost is $1.10/bbl and lifting cost of oil equivalent is $6.81/bbl combined with higher success rate of 63.6% is an added advantage to the company. Oil to Gas ratio is 60:40.
OIL has proved its expertise in the onshore E&P activities through efficient cost structure and constant increase in production from matured fields. Further, with increasing focus on natural gas in the near term, production levels could increase substantially. As on March 31, 2009, OIL had produced around 3.5 million tonnes of crude oil and 2,268 million metric standard cubic meters of natural gas.
���We believe that the price band captures the near time upside potential of the company and we don���t see any significant listing gains. However investors can subscribe for long term gains. At the upper band of Rs 1050, the company will be available at 10x its earnings and EV/EBITDA at 4.94x,��� the brokerage said.
OIL India is a ���Mini - Ratna��� public sector undertaking and is the second largest national Oil & Gas company
as measured by total proved plus probable oil (575mnbbl) and Natural Gas reserves (63.41bcm) and production.
The company has an outstanding track record in the exploration of onshore reserves with its average Reserve
Replacement Ratio being greater than 2 for most of the last 5 years. Finding cost is $1.10/bbl and lifting cost of oil equivalent is $6.81/bbl combined with higher success rate of 63.6% is an added advantage to the company. Oil to Gas ratio is 60:40.
OIL has proved its expertise in the onshore E&P activities through efficient cost structure and constant increase in production from matured fields. Further, with increasing focus on natural gas in the near term, production levels could increase substantially. As on March 31, 2009, OIL had produced around 3.5 million tonnes of crude oil and 2,268 million metric standard cubic meters of natural gas.
���We believe that the price band captures the near time upside potential of the company and we don���t see any significant listing gains. However investors can subscribe for long term gains. At the upper band of Rs 1050, the company will be available at 10x its earnings and EV/EBITDA at 4.94x,��� the brokerage said.
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