The Hindu Business Line : Assam Co hits circuit on oil biz prospects

THE stock price of Assam Company Ltd, engaged mainly in tea business, is on an upward move in the last two days after it announced that its oil and gas division has commenced extraction work in Assam.

The stock price of the company was locked in 20 per cent upper circuit on Wednesday at Rs 73.40 on the BSE with volumes of 42,520 shares. The stock was locked in upper circuit yesterday also.

Brokers said there has been sudden interest in the stock after the company announced its oil and gas business plans.

In a notice to the BSE on Tuesday, after market hours, the company said its oil and gas division has commenced work of extraction of oil and gas in Amguri block in Assam. For this, it has joined hands with Canoro Resources, a Canadian company.

It said the Government has awarded the two blocks in Assam to the consortium of the company and Canoro Resources. The Canadian company would be the operator for the two blocks.

The company has further been awarded three marginal fields in Assam by ONGC on service contract basis.

Assam Company said it is making serious efforts to successfully carry out the exploration and development activities in all the allotted fields.

Brokers said the oil and gas business would be very profitable and will totally change the financials of the company.

There were various estimates floating in the market about the value of the oil and gas business. Some estimates were as high as Rs 75 per share. However, oil analysts said it was very high.

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