*RIL misses bull's eye in neighbouring KG-D9 well ( Humpty-Dumpty Hardy’s Fall)*
* *
* --Hardy Oil: Found no hydrocarbon in D9 Block exploration well*
* --Hardy Oil: To abandon exploration well in KG Basin D9 Block*
* --Reliance Ind owns 90% in D9 Block, Hardy Oil 10%*
* *
* [image: RELIANCE.JPEG]*
*It may not be an auspicious start for Reliance Industries Ltd as it digs
deep in the Krishna-Godavari Basin's D9 Block in its quest for more oil and
gas. RIL's partner in D9 Block, Hardy Oil and Gas Plc, today told the London
Stock Exchange that they would have to abandon the first exploration well in
the block after encountering "poor reservoir sands." Simply put, RIL-Hardy
Oil combine has so far not found any sizeable traces of hydrocarbons in the
block.*
* The announcement meant that Hardy's stock was pilloried on the London
Stock Exchange as investors were betting big on the company striking a
jackpot in the D9 Block. The stock lost more than one-third of its value,
plunging 36%. The announcement also hit RIL's shares back home with the
stock falling nearly 4% in a knee-jerk reaction. The UK-based
exploration firm had earlier this year tom-tommed that D9 Block could have
potential gas reserves of 10.8 trln cu ft and oil reserves of 143 mln
barrels, which had further raised investor hopes. Stakes were also
raised as the D9 Block lies right next to the famed D6*
*Block, where RIL along with Canada's Niko Resources unearthed a huge
reservoir of gas along with sizeable oil. RIL is the operator of D9
Block and holds 90% stake, while Hardy owns the rest. RIL, which drilled
the first of the four exploration wells planned in the block, will be
plugging and abandoning the well.*
* "While encountering some background gas while drilling, the well
encountered poor reservoir sands in both the Middle and Lower Miocene target
levels," Hardy Oil said in a notification to the London Stock Exchange
today.*
* It said the exploratory well--KG-D9-A1--drilled to a total depth of
4,861 m subsea to explore the Middle and Lower Miocene targets "will be
plugged and abandoned".*
* The exploratory well, which was spudded on Aug 31 with Transocean's
Deepwater Expedition rig at a water depth of 2,754 m, could cost the
consortium around $50 mln. The D9 Block or KG-DWN-2001/1 covers an area
of around 11,605 sq km. RIL Executive Director P.M.S. Prasad had said
last month the company was*
*optimistic on some of the existing offshore blocks in the country,
including the D9 Block. "D9 is a good block... But the proof of the
pudding is in eating it. That*
*means we have to drill and actually find. The problem is that these are
frontier areas and nobody has a good understanding of the geology," Prasad
had said.*
* RIL sources said the company will continue with the exploration plan in
the block, which includes drilling of another three exploration wells.
Hardy Oil Director Finance Dinesh Dattani told a news channel that the
initial exploration setback could delay the drilling of the remaining wells
by a few months. Dattani also said the company will be revising the
reserve potential of D9 Block following the drilling of the first dry well,
but said it is not going to pull out from the production sharing contract.*
*Regards*
*A.K.Prabhakar*
* *
*Equity Analyst *
*[email protected]*
*[email protected]***
*Disclaimer:***
*This represents views based purely on Technical studies. The information
and views presented in this report are prepared by A K Prabhakar. The
information contained herein is based on my analysis of the Charts and up on
sources that I consider reliable. I, however, do not vouch for the accuracy
or the completeness thereof. This material is for personal information and I
am not responsible for any loss incurred based upon it. The investments
discussed or recommended in this report may not be suitable for all
investors. Investors must make their own investment decisions based on their
specific investment objectives and financial position and using such
independent advice, as they believe necessary. While acting upon any
information or analysis mentioned in this report, investors may please note
that neither A K Prabhakar nor any person connected with him accepts any
liability arising from the use of this information and views mentioned in
this document.*
*A K Prabhakar and his affiliates may hold long or short positions in the
above-mentioned companies from time to time. The report is intended for a
restricted audience and I am not soliciting any action based on it. Neither
the information nor any opinion expressed herein constitutes an offer or an
invitation to make an offer, to buy or sell any securities, or any options,
futures or other derivatives related to such securities. *
--
A.K.Prabhakar
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