Niko Resources – Reliance Industries’ 10 per cent partner in the Krishna-Godavari D6 block on the country’s east coast – today said it was not aware of its partner’s plans for the flagship gas-producing block.
Niko Resources Chief Financial Officer Murray Hesje said he did not know what was causing the delay in the budgeting process at Reliance. RIL is the operator with 90 per cent stake in the block.
The Calgary Herald, a Canadian-newspaper quoted Hesje saying: “I guess, over the next few months, information that comes out will help everyone understand what the implications are. They own 90 and we own 10 per cent and we will work with them. Once the budget gets finalised, we will let the market know.”
Niko’s share prices fell 13 per cent to $81.75, the lowest in 15 months, after the company reported that production was 16 per cent below guidance at D6 in the three months ended December 31.
Hesje said the project ends 2010 with the same 18 wells tied in and producing as at the start of the year, although output was down due to natural decline. A total of 39 wells are expected to eventually be drilled at D6.
RIL, in its third quarter results, said natural gas output from the KG-D6 field averaged 54.5 million standard cubic meters (mscmd) a day in the quarter ended December 31 — down from 60 mscmd in the April-June quarter.
The company is seeking help from US oil major Shell International to rectify technical glitches in KG D6 block. Analysts said RIL’s stock price has not seen any upward movement due to lack of guidance on reserves.
