Rig acquisition fires up Jindal Drilling

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`Co has bought a rig from a Singapore shipyard last week at a cost of $153 m'

Jayanta Mallick

Kolkata, March 7

Jindal Drilling on Tuesday shot up by around 7 per cent to finish at Rs 324.20 on the BSE with a traded quantity of 3.34 lakh shares changing hands. The stock has gained by 70 per cent in the past one month and 8.48 per cent in the last one week.

According to market sources, though its on-going business restructuring had been driving the counter, today's sharp upward move was for its first rig acquisition.

Industry sources said that the company has bought a rig from a Singapore shipyard last week at a cost of $153 million. Its two existing rigs are hired on lease from Noble Drilling Corporation of US at a rate of $ 61,000 per day and are deployed at ONGC sites on the west coast.

However, the three year charter for the two rigs expires this year - one as early as April 1, 2006 and the other one on December 31, 2006.

Though company sources were not available for comment, sources close to the development confirmed that the rig was acquired on the last weekend and are likely to be deployed for ONGC.

According to drilling industry sources, as per current rates, the new rig's income per day would be in the region of $0.15 million a day.

Market analysts pointed out that the acquisition would mean first rig ownership for the company and will push the revenue and profit up substantially.

(This article was published in the Business Line print edition dated March 8, 2006)
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