Mercator dispatches 1st trench of oil from Cambay Basin

MUMBAI | RAJKOT – In a press communication submitted to the exchanges on Monday, Mercator Ltd said of its subsidiary company having commenced and dispatched 1st tranch of oil produced from Cambay Basin.

Mercator Petroleum Limited, a Subsidiary of Mercator Ltd is pleased to announce the commencement of oil production and dispatch from its 1st well, Jyoti-1 as part of in their EWT CB-ONN-2005/9 oil block in the Cambay basin, the filing read.

The Company began mobilizing the Jyoti-1 well in August 2018, after receiving the mining lease in June 2018 for a period of 20 years.

The Company has signed a MoU with the Indian Oil Corporation for sales of its crude oil, at benchmarked rates.

The Company is expected to ramp up the production significantly in the coming months, as it brings the second well, Jyoti-11 under production.


In the month of August 2018, the company had communicated to the Indian Stock Exchanges for its preparedness to sell 1st trench of oil from Cambay Basin block by August 2018.

Mercator to sell first tranch of oil from Cambay Basin block by August 2018


OIL PRODUCTION PLAN

Mercator Petroleum has an approved Field Development Plan for 23.79 million barrels of proven high-quality oil in the highly prolific Cambay basin, the statement read.

The oil block produces light sweet crude oil; the Company aims to close FY19 at a production rate of ~5,500 barrels of oil per day.

The Company expects the reserves to increase significantly as it enters the second phase of exploration.

The oil & gas segment is expected to be Mercator’s largest growth driver FY20 onwards, with 35% of FY20’s EBITDA contribution coming from oil & gas.


IMPACT ON SHARE PRICE

Announcement from the company had hit the exchanges, just few minutes before the trading session was to kick-off on the Indian Bourses on Monday morning, after a weekend pause.

Slight spike in terms of price improvement of the shares was visible as soon as the trading session kicked-off on the bourses in India, but gradually as the day progressed, Mercator shares continued trading in RED Zone and ended on negative counters.


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