REMINDER: Our user survey closes on Friday, please submit your responses here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us
Google
Web www.equitybulls.com
Research
|More
Indian Oil and Gas - Upstream - Rising tide lifts all boats - HDFC Securities
Posted On: 2021-09-29 16:46:45 (Time Zone: UTC)
facebook sharing buttontwitter sharing buttonpinterest sharing buttonsharethis sharing buttonwhatsapp sharing buttonemail sharing button
Mr. Harshad Katkar, Institutional Research Analyst, HDFC Securities
Rising domestic gas supply and improvement in oil and gas realisation should drive upstream companies' earnings growth and valuations. We estimate APM gas price to be revised upwards by over 60% to ~USD 3/mmbtu in H2FY22, and further by over 45% to >USD 4/mmbtu in H1FY23. We believe Brent crude price, currently at >USD 75/bbl, should remain elevated, as OPEC supply growth is likely to lag global demand growth. We estimate 3% CAGR oil & gas production growth and 28% CAGR improvement in realisation for ONGC and OIL over FY21-23E should drive earnings growth of up to 30-45% CAGR (FY21-FY23E). Further, it should lead to stock price upside potential of over 26-36% for ONGC and OIL. On FY23E, ONGC is trading at a PER of 3.8 and OIL is trading at 3.1 PER.
Oil price to remain elevated over the medium term: Brent crude price is currently at >USD 75/bbl, up 47% YTD, driven by recovery in global demand with opening up of economies. The US was hit by Hurricane Ida in Jul end, which has resulted in disruption of production from Gulf of Mexico (GoM) of ~1.7mb/d in Aug. The IEA expects supply from GoM to normalise by Q4CY22. With crude oil and product inventory in lower half of the five-year range and EIA estimating global crude oil supply growth to lag demand growth in 2021 as economy global recovery continues to gather pace, we see an upside risk to crude oil prices.
Domestic gas prices to witness a sharp jump: We estimate the domestic APM gas price to be revised upwards by over 60% to ~USD 3/mmbtu in H2FY22, and further by over 45% to >USD 4/mmbtu in H1FY23 from current price of USD 1.79/mmbtu. The APM gas price, which is currently at a decadal low, should rise sharply, supported by firming up of global gas prices post unlocking of economies and the current shortage of supply in Europe ahead of the winter season.
Improving realisation to benefit upstream companies: We expect, in FY23E, ONGC (standalone) to produce 23.0 mmt of oil and 24.8 bcm of gas, and OIL to produce 3.2 mmt of oil and 2.6 bcm of gas. Increasing gas prices and rising Brent crude oil price should improve realisation and in turn drive earnings CAGR of 30-54% over FY21-FY23E for ONGC and OIL. ONGC should also benefit from increase in gas production by up to 12mmscmd over FY21-25E as production from its KG basin blocks. Every USD10/bbl change in oil price realisation changes ONGC's FY23E earnings by INR 7.2/share (19.5%) and OIL's FY23E earnings by INR 8.0/share (11.3%). Every USD1/mmbtu change in gas price re
Gordon Your right about "pointless " it's a good game .
Personally I like Bond movies better more Drama and excitement for an "old oilex Dog " like me ;)
https://vimeo.com/364436462
Ah. Been there. Done that, and bought the t shirt.
Lol.
Whisky
Yuri. Have you finally lost the plot?That post incomprehensible. Lol.
Hahaha!
Are you sure?
What about topping up on the dips?
Seems odd to try and put me off making a entry when yet you hold shares….
All the best, nothing wrong with swinging though is there? Though manipulative speech is a little shall we say naughty? :()
Percy. Read my post at 09.41 where I gave a summary of my history here. I have been back in for months. Atb.
So you’re saying you are now back in?
Roger that - nice dip and in she goes.
It’s a buy signal from Gordon!
All the best, you will be a little rampy tomorrow? :()
What are you on about Percy? I don't want it to drift. I already have as much as I want, at the moment. I would be delighted if it went up. I don't believe I have mentioned cash burn or dilution for yonks, but since you insist. Cash burn is always a fact of life and further dilution may or may not be necessary with Roland at the helm. Gla.
Don’t worry Gordon!
Plenty more days for SP to drift.
Give it some of your dilution talk and cash burn - that always helps.
All the best, better not leave your entry late though! :()
Got to say I'm pleasantly surprised at the small drop today. Maybe it means news is still on the way.
Hi Callum. Don't know if you watch " Pointless" but your other alias " V for Vendetta" was a pointless answer in the final round the other day.
The category was John Hurt films. Atb.
Ha Gordon
Me Researcher in Chief, that made me laugh :)
Afraid Im busy in the real world but Ive told everyone a few weeks back what my holding is and at what price.
My moneys on that Pre-Feasibility Report report from April 2019 , the old school know what i am on about.
Might take a few years but that what im betting on.
Of course given the real world a plan is one thing but delivering its another so I guess thats why Roland get paid.
Gla
Bmdjf. I’m too long in the tooth to be making several accounts to my own benefit. Atb.
I think Percy is Gordon and jbeadle ????
Lol
I might wait a little longer as Gordon is doing a good job with the price drop.
All the best, swing traders unite :()
Where could this SP go with the right news
Percy
My advice would be buy as many as you can
Things are starting to fall into place
Cambay is ready to produce after a 3yr deadlock
Also new carbon capture projects been mentioned
Wouldn’t be surprised to see multiple sp rises hopefully for Xmas
Way to go c2, I might pick up some more as well. Let’s see how next few days evolve. Atb
And as Gordon says, I am looking to buy back in as I took a bit of profit in the last 24 hours.
As expected a drop
Thanks Espen. Don't think I would quite go that far. I regard Callum as our researcher in chief, although I am usually less optimistic than him
Percy. I can't possibly advise you on whether to get in or stay out. Not sure what I have said recently that shines a bad light on Oilex.
I first bought into Oilex in 2015 at 2.5p. I averaged down over the years and by late 2019 had 6.6 million shares at an average of 0.32. All of that time it seemed good times were just around the corner. By late 2020 they were down to 0.06 and I was 90% sure I had lost my cash. Then out of the blue came the news that Oilex had got lucky. The preferred buyer of gspc's share had dropped out and Oilex were getting it on the cheap. On April 6th, against all expectations I was able to get our with a profit at 0.407. I have since got back in with 5 million at an average of 0.22 or if I deduct my previous profit from the cost, an average of 0.10.
My current position is that yes I believe I can make a further profit from here, but I am not in the camp that says this can suddenly go to multiple pence. Don't see how that can happen until the new Wells are drilled in about a year. Even then it is very dependent on the success of the new techniques. If course Roland's new projects may give a boost before then. Hope so.
I have come to realise that on any day, news can give a boost far in excess of what is justified by the facts. Thus gives an opportunity to get out with a profit and then back in later at a lower price, as Conger did recently. I certainly don't believe that anything I or anyone else sayd on here influences the price one way or the other.
Atb. Gla
*couple
Percy, Gordon has more historical experience with this share than anyone else here. I’d say he is a realist, he has shares (bought in recently), so he certainly believes in it. As do I, who also have been in since a cold years. Atb
Hi Gordon,
you seem to be shining a lot of bad light on Oilex regularly.
Is this a share I should stay away from?
All the best, are you trying to get in at a lower price? :()