INDUS GAS LIMITED
22nd September 2015
Indus Gas Limited
('Indus' or 'the Company')
Preliminary Financial Results
Indus Gas Limited (AIM:INDI.L), an oil and gas exploration and development company with assets in India, is pleased to report its full year results for the 12 months to 31 March 2015.
§ Approval of Declaration of Commerciality ('DOC') during the year for a ~2000 km2 non SGL area to be retained as potential mining lease area (in addition to 176 km2 of SGL Mining lease). An integrated Field Development Plan for this Non SGL Area is currently under preparation for submission on or before February 2016. The remaining Block area stands relinquished in line with PSC requirements.
§ Published new Competent Persons Report ('CPR') delivering a significant uplift in the Company's reserves (Gross 2P/2C of 4,091 Bcf in 2014 vs Gross 2P/2C of 3,272 Bcf in 2012). This is the Company's fourth CPR which has sequentially increased the hydrocarbon potential of the Block.
§ Successfully drilled a large number of appraisal wells with encouraging gas shows, which will help the Company put together a robust integrated field development plan for the Block area outside of SGL.
§ A new gas sand system (called P9) was successfully tested for production for the first time below producing zone P10 in Pariwar formation in SGL Field.
§ Ongoing discussions with counterparties to establish connection to cross country pipeline to Western states of Gujarat and North-West Pipeline Grid to enable long term gas monetisation.
Financial:§Invoiced revenues increased 49% to US$ 41.39m§Reported operating profit up 44% to US$ 30.02m
§Reported profit after tax up 38% to US$ 16.24m
§Concluded and drew down on new US$ 180m facility
§Widened funding options with new Medium Term Note (MTN) programme
Mr Peter Cockburn, Chairman of the Company commented:'This has been an extremely challenging period for the global oil and gas sector. Whilst the Indus Gas share price has not escaped the industry wide malaise, the Company's fundamentals have remained robust and several key milestones have been achieved during the financial year under review.The Company's operational and financial performance has been strong with consistent revenues and profits generated during the period. The Company has also successfully secured additional balance sheet capacity, on very attractive terms, from which to fund future production growth and infrastructure investment.
The approval of the Declaration of Commerciality, granted in September 2014, marked the culmination of over a decade of intensive exploration and planning work on the block. It paves the way for the integrated development of our already significant, and growing, reserves base.
In 2014, Indus released its fourth Competent Person's Report. This delivered a 52% uplift in the Company's gross 2P reserves and an 11% increase in the 2C contingent resources base compared with the last CPR which was published in 2012. These impressive growth rates highlight the continued successful execution of the Company's appraisal and drilling programme.'
In accordance with AIM rules, Paul Fink, Technical Consultant, a Geophysicist who holds an engineering degree from the Mining University of Leoben, Austria and has 25 years of industry experience is the qualified person that has reviewed the technical information contained in this release.
-ENDS- For further information please contact:
|
Indus Gas Limited Peter Cockburn
John Scott |
+44(0)20 7614 5900 |
| Arden Partners plc Steve Douglas
Patrick Caulfield |
+44(0)20 7614 5900 |
| Bell Pottinger PR Lorna Cobbett |
+44(0)20 3772 2500 |
Introduction
Since flotation in June 2008 the Company has executed a clear and consistent strategy with the central objective being to maximise long term shareholder value creation from our licence block in North West India. This strategy has delivered prolific exploration success as evidenced by the rapid growth in our underlying reserves base and the successful execution of the first production phase.Exploration and appraisal activity has continued at a rapid pace in the last twelve months with nine drilling rigs and over two thousand workers operating on site. This drilling and appraisal programme has delivered both a series of material new gas discoveries and provided further valuable insight into the gas structures present in the western half of our block.
The Company has also continued to invest heavily in the construction and development of our on-site infrastructure. The infrastructure is now in place to accommodate both the second and third phases of
production scheduled to come on stream over the next two years and significantly, also provides some additional capacity from which to negotiate new supply contracts.
Domestic energy security remains one of the key challenges facing the government. India continues to be a major net importer of energy. This energy deficit can only be addressed through major investment programmes in long term infrastructure build and incentivising domestic energy companies to increase exploration and production.ActivityIndus is pleased to announce another year of gas sales based on gas production capacity of 42 mmscfd (33.5 mmscfd net of CO2) achieving consolidated adjusted revenues (including 'ToP' receipts) of US$ 42.34 mn. We have continued to build scale in our production profile and our stated long term business plan remains on track. We continue to achieve this while maintaining compliance with the terms of our Production Sharing Contract, applicable laws and sound standards of health and safety. The approval of the DOC has opened the way to the
establishment of an integrated Field Development Plan for the non SGL area of the Block. Our new CPR demonstrated our ability to convert resources into reserves and enhance the future revenues of the Block. We have also continued with our appraisal program and have completed significant drilling and testing, confirming and establishing further gas presence.Declaration of Commerciality (DOC)The DOC for a circa 2000 km2 non SGL area of the Block (DOC Area) was approved by the Director-General Hydrocarbons (DGH) on the 18th September 2014 and by the full Block Management Committee on the 20th October 2014. The DOC is another important step in the history of the Block as it recognises the commercial feasibility of the development of a large acreage in the Block. The DOC area along with the 176km2 SGL Development Area are our chosen areas for future development work with the balance of block being relinquished.
The DOC has allowed work to begin on a Field Development Plan (FDP) for the area and this is expected to be completed under the usual process on or before February 2016 as required under the PSC. Approval of the FDP
will pave the way for the grant of mining lease over the DOC area.Competent Persons Report (CPR)In December 2014 we announced the results of our latest CPR from Senergy Oil & Gas. The significant uplift in the Company's reserves and growth in Contingent Resources (shown below) reflects the major operational progress made on Block RJ-ON/6 since the last CPR was conducted in 2012. This is the third CPR completed by Senergy with substantially the same team members thereby building a continuity of analysis.CPR Highlights:· Gross 'Proven plus Probable' remaining reserves increased to 872 Bcf (Net of 18 bcf already produced as of 30 September 2014)
o 52% increase from 573 bcf assigned in previous CPR by Senergy in 2012
o Proven reserves increased to 423 Bcf as against 118 bcf assigned in previous CPR by Senergy in 2012
o New reserves largely attributed to new sands (lower P10) within SGL field and SSM fields
· 2C gross contingent resources increased 19% from 2,699 Bcf to 3,219 Bcf - Current CPR utilizes only some of the recent data used in the approval of the Declaration of Commerciality in respect of contingent resources.
· Best estimate prospective resources of over 2 TCF attributable to the wells outside the SGL
development area
· Pipeline connection to existing cross country pipeline and western gas grids emerging as a viable option for long term gas monetization.
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