>Aban Offshore Limited (HEM SECURITIES)

Company Snapshot
Aban Offshore Ltd., formerly Aban Loyd Chiles Offshore Limited, is an off-shore oil and gas drilling company. The Company has two business segments: Offshore Oil Drilling and Production services, and Wind Power generation. The company has reported earnings results for the full year ended March 2008. For the year, the net sales for the company jumped to Rs 6579.21 mil-lion for the FY09 as against the net sales of Rs 4974.75 million for the FY08 with the growth rate of 32.35%. The net profit for the company stood at Rs 1648.65 million for the FY09 versus the net profit of Rs 915.41 million for the FY08 with the growth rate of 80.10% as compared to 9.22% for FY08.

The company posted excellent financial figures for the quarter ended Decem-ber 2008. The net sales for the company gone up by 54.88% to Rs 2618.68 million for the Q3FY09 as against the net sales of Rs 1690.74 million for the Q3FY08. The company posted the EBITDA of Rs 1557.77 million for the Q3FY09 as against the EBITDA of Rs 897.42 million for the Q3FY08 with the growth rate of 73.58%. The operating profit margin for the company stood at 59.49% for the Q3FY09 as against the operating profit margin of 53.08% for the Q3FY08, clearly showing the strength of the company. The net profit for the company rose to Rs 558.72 million for the Q3FY09 in comparison to net profit of Rs 477.67 million for the Q3FY08 with the growth rate of 16.97%. The net profit margin stood at 21.34% for Q3FY09 in comparison to 28.25% for Q3FY08. The EPS for the company stood at Rs 14.79 for the quarter ended in December 08 versus the EPS of Rs 12.64 for the quarter ended December 07. The EPS on TTM (Trailing twelve months) stood at Rs 66.23 for the company.

Business Details
Aban Offshore Ltd, formerly known as Aban Loyd Chiles Offshore Limited was incorporated in 1986. The Company together with its sub-sidiaries, provides oil field services for offshore exploration and pro-duction of hydrocarbons in India and internationally. It owns and oper-ates offshore drilling rigs, as well as provides drilling services to vari-ous oil and gas operators. The company also engages in the generation of wind energy and provides wind energy services. The Company pos-sesses twenty offshore assets including fifteen jack-up offshore drilling rigs, two drill ships, one floating production platform and a jack-up rig and drill ship each on bareboat charter. It enjoys the privilege of part-nering with several global players in the oil and natural gas industry by offering them reliable, state-of-the-art drilling services. Its notable cus-tomers include ONGC, Hardy Exploration & Production (India) Inc., Oriental Oil Co. (Dubai), Shell Burnei, Shell Malaysia, Hind Oil Explo-ration Co. Ltd, Cairn Energy, Petronas Carigali etc. It is India`s largest offshore drilling entity in the private sector. Its innovative and cost ef-fective solutions make the company one of the most efficient interna-tional drilling contractors. Aban Singapore Pte. Ltd. (ASPL) was formed as a wholly owned subsidiary of Aban Offshore Ltd. to offer drilling services to large global oil and gas operators. The company has obtained ISO 9001:2000 for its drilling operations.

Industry Outlook
The oil and gas industry has been instrumental in fuelling the rapid growth of the Indian economy. It contributes about 45 % of the total energy consumption of the country, which is the fifth largest energy consumer in the world. The oil exploration & production (E&P) space has been consolidating with strong momentum. With the announce-ment of NELP in the second half of 2009-10, the companies are expect-ing to get more oil & gas exploration blocks for auction by 2010. Off-shore vessels such as jack up rigs, anchor handling tugs, accommoda-tion barges and supply vessels which play a key role in the hunt for oil & gas have seen huge demand spurt due to increased global activity. According to DGH (Director General of Hydrocarbons) the shortage will rise further as India drills more wells estimated at 498 by 2012. The demand for rigs is going up strongly due to rise in oil prices on widen-ing demand - supply gap which is spurring the pursuit of additional re-serves. There is a huge worldwide shortage for exploration equipment. At present, the day rate for deep water rigs has gone up from $1,00,000 to over $7,00,000 in the last couple of years. The sector is attracting huge investments in order to meet the rising demand from oil & gas firms and is expected to show outstanding performance in medium to long term with Aban Offshore being a valuable pick in the industry.

To see full report: ABAN OFFSHORE