The Hindu Business Line : Assam Company to raise $250-300 m

Kolkata, April 11 Assam Company is planning to raise $250-300 million (Rs 1,000-1,200 crore) through a mix of debt and equity instruments by end-2008. The company is also considering a listing at the AIM (Alternative Investment Market) segment of the London Stock Exchange in this regard. A final decision is likely to emerge by October-November of this year.

Bulk of the funds will be used in strengthening the company’s presence in the oil and gas sector and in implementing the Rs 2,000 crore hydrocarbon special economic zone in Gujarat beginning 2009. The SEZ will be developed with Gujarat State Petroleum Corporation (GSPC) and is slated to be operational in 2010.

“We are considering a host of options for raising funds. While part of the finances may be raised through foreign currency convertible bonds, we may also include some equity component. We may take another six or seven months to identify the right mix of instruments,” Mr Abhay Chawdhry, Director - Finance, told Business Line.

He, however, stressed that the company has already lined up finances for meeting the $38 million (Rs 150 crore) investment commitments in the existing projects in oil and gas sector in 2008-09.

Amguri field

Of the total, a little over $28 million (Rs 110 crore) will be spent towards Assam Company’s share in development of the Amguri field in Assam during this fiscal. The company holds 40 per cent interest in the field. The Canada-based Canoro Resources Ltd holds 60 per cent operating stake in the field.

Amnguri is currently producing 1,000 barrels of oil equivalent a day (boed). According to the field development plan submitted before the Directorate-General of Hydrocarbons (DGH) Assam, the joint venture will drill 12 wells including eight development wells to enhance the production to 5,000 boed by the first quarter of 2009-10.

According to Mr Chawdhry, the oil produced from Amguri is currently securing $5 premium over Bonny Light. A separate JV of Canoro and Assam company is currently exploring hydrocarbon in AA-ON/7 block in Assam.

Besides this, Assam Company has also secured three marginal fields near Jorhat. “We are currently considering various recovery programmes to enhance productions from these fields,” he said. Shares of Assam Company closed at Rs 24.85, 0.4 per cent lower than the previous closing price, at the Bombay Stock Exchange on Friday.

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