In March, NSE and BSE-listed Asian Energy Services Ltd bought a 50 per cent participating interest in the Indrora oil and gas field near Gandhinagar, Gujarat, from its parent company, Oilmax Energy Pvt Ltd.
This move was to ensure that Asian Energy, which provides services such as 2D and 3D seismic surveys to the oil and gas industry, does not suffer from the cyclical nature of its business, the company’s Director Kapil Garg, told businessline on Tuesday.
For 2022-23, Asian Energy reported a turnover of ₹114 crore, a steep fall from ₹263 crore in the previous year, and it made a net loss of ₹44 crore, compared with a net profit of ₹38 crore in 2021-22. Garg attributes the decline in turnover and profits to a lack of orders.
In February, the rating agency, India Ratings downgraded Asian Energy’s fund and non-fund-based limits of ₹20 crore and ₹50 crore respectively, while saying, “outlook is stable”.
On April 1, the government of Gujarat, granted a 20-year mining lease for the field, CB/ONDSF/Indrora/2021, to Oilmax Energy, a company founded in 2008 by Garg, an oil industry veteran who had earlier worked with ONGC, Enron and British Gas.
Alongside, Oilmax Energy had taken steps to sell its 50 per cent stake in Indrora field to its listed subsidiary, Asian Energy, “at a discounted price”. (The other 50 per cent in the field is held by the BR Shetty group of Dubai.)
Garg said that before Oilmax took it over, the Indrora field was producing 40 barrels of oil a day (ONGC was a sort of a ‘caretaker’ operator then.) Now the production has been raised to 70 barrels and in another week, the production would increase to 200 barrels a day. And in August, Asian Energy will start a work program comprising drilling 16 wells to raising production further to about 1,000 barrels a day, Garg said.
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The stock market appears to have taken note of these developments. The price of Asian Energy’s share has increased from ₹51.50 on March 2 to ₹114.45 on June 6.
Asked if Oilmax, which has a 62.5 per cent stake in Asian Energy, would be merged with the subsidiary, Garg replied in the negative, saying that a merger was once the idea but the current situation no longer warrants it.
He said that Asian Energy would remain asset-lite and a pure-play services company. He did not rule out Asian Energy securing more oil and gas assets from Oilmax.