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Our Bureau

Kolkata , Jan. 4

A FORTNIGHT ago, the Kolkata-based Assam Company signed a memorandum of agreement with the US-based oil company DMS Exploration for a 33.33-per cent working interest for an Australian oil prospect.

According to Mr Abhay Chawdhry, CFO of Assam Company, the Australian oil prospect, Yorketown Point Gilbert, licence no. 73, is 30 km from Adelaide. The total area is 625 square km.

The licence is held by DMS Exploration, based in Austin, Texas.

Assam Company will initially invest $5 million in this project; this will be followed by more investments as and when needed.

According to Assam Company, a joint venture company would be formed and it would work in similar oil prospects anywhere in the world including India and Australia. The joint venture company will use DMS' proprietary exploration.

DMS Exploration is engaged in the acquisition and development of properties in the US and in exploration of international oil and gas prospects.

Mr Abhay Chawdhry told Business Line that the funds for this venture would come from the private placements made by the company to three Mauritius-based financial institutions.

They are Investment India (Mauritius) Ltd, Lotus Global Investments Ltd and Mavi Investment Fund Ltd. Assam Company has issued 2.7 crore warrants each of Re 1 face value. A premium of Rs 22.25 has been charged on each warrant. The company will raise Rs 188 crore from this exercise.

According to Mr Chawdhry, post-issue, these three institutions would hold 26.64 per cent stake in the company. At an extraordinary general meeting on January 17, the company will pass an enabling resolution to increase the foreign holding in this company to 49 per cent.

The company, which ended its 12-month financial accounting in December 2005, is hoping to register a turnover of around Rs 135 crore.

Assam Company is also contemplating an employees stock option scheme (ESOS) for its senior and mid-level employees. The Kolkata-based merchant banker Ashika has prepared a draft proposal, said Mr Chawdhry. A similar enabling resolution on the ESOS is being forwarded to the shareholders for the coming EGM.

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