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

MUMBAI | RAJKOT – Mercator Ltd said in a regulatory filing submitted to the exchanges in India, about first tranch of oil sale from Cambay Basin block to happen in August 2018.

Mercator Petroleum Limited, a subsidiary of Mercator Ltd is pleased to  announce that it has mobilized all the equipment at site and is all geared up for First Sale of oil in August 2018, the company statement read.


MINING & SALE

The company has received the mining lease for the oil blocks in June 2018 for a period of 20 years of which it has an an approved Field Development Plan for 23 million barrels of proven high-quality oil in their oil block in the Cambay basin.

First sale from oil block expected in August 2018 and H2FY19 (Jul-Sep Quarter) earnings to see significant growth as oil & gas segment ramps up.

The company has signed a MOU with Indian Oil Corporation for safes of its crude oil.


PRODUCTION & FINANCIAL IMPACT

The oil block will produce fight sweet crude oil, the company aims to close FY19 at a production rate of 5,500 barrels of oil per day.

Projected Production Schedule

  • FY19 end; production rate: 5,500 barrels per day
  • FY19: 500,000 barrels (Projected Production per annum)
  • FY20: 2 million barrels (Projected Production per annum)

For the developmental wells yet to be drilled, environment clearance is under progress.


When the company enters into the second phase of exploration, they expect new discoveries and reserves to increase significantly.

The oil & gas segment is expected to be Mercator’s largest growth driver FY20 onwards, with ~35% of FY20’s EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortization) contribution coming from oil & gas.


Investors & Traders reacted sentimentally to the announcement, as the impact post-announcement was seen on the share price of the company trading which spiked for a while and continued trading in GREEN Zone on positive counters, on the Indian Bourses on Tuesday.

 


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