- Shares of Oil and Natural Gas Corporation (ONGC) Limited rallied 13.58% to ₹189.80 apiece on the BSE to reach a fresh 52-week high.
- Brent Crude has crossed the $130 per barrel mark, the highest since 2008.
- ONGC’s management said that gas output from the KG-98/2 was 0.6 mmscmd and additional 1.75 mmscmd gas is expected from March 2022 which will lead to production growth.
Shares of Oil and Natural Gas Corporation (ONGC) Limited rallied 13.58% to ₹189.80 apiece on the BSE to reach a fresh 52-week high. The stock zoomed 94.87% from its 52-week low of ₹97.45.
Brent Crude has crossed the $130 per barrel mark, the highest since 2008. This happened due to tight supply fears after the US and European allies mulled a Russian oil import ban amid delays in the potential return of Iranian crude to global markets.
Higher crude oil prices and gas realisations could lead to better profitability for ONGC. In the past three years, ONGC underperformed the benchmark due to a decline in the production of oil and gas domestically. A 44% gain was observed on the S&P BSE Sensex, while the shares of ONGC grew merely by 12%.
ONGC’s management said that gas output from the KG-98/2 was 0.6 mmscmd and additional 1.75 mmscmd gas is expected from March 2022 which will lead to production growth.
In a result update, ICICI securities said that in FY24E, oil production is estimated at 44000 bpd from the KG basin while gas production is expected to reach 10.4mmscmd.
In Q3FY22 (October to December quarter), ONGC’s revenue increased 67.3% YoY (year on year) as there was a 75% increase in oil realisation. On a YoY basis, its profit after tax (PAT) zoomed nearly 600%.
HDFC Securities had given a buy call on ONGC with a target price of ₹208 on February 15, 2022. The time period given by the analyst is one year.
Emkay Global gave a target of ₹220 on the stock on February 22, 2022.
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