Monday, June 29, 2009


■ Assam Company Ltd. (ACL) has business interest in tea and upstream oil business. It is a producer of high quality, premium tea. In 1994 ACL diversified into the oil & gas industry. Currently, it has participating interests in 5 assets in the Assam-Arakan basin in North East India. Its E&P portfolio consists of one discovered field, one exploration block and three service contracts with ONGC.

ACL operates through 17 tea estates and gardens with planted area of about 8644 hectares on a grant area of 14664 hectares. The average yield per hectare stands at 1983 kgs.

The Company was awarded Amguri block (discovered oil field) and AA-ON/7 (exploration block) by the Government in 1996 under Pre-NELP round Amguri covers an area of approximately 52 75 square Pre round. 52.75 kms with estimated proven resources of 60 MMbbls of oil and 229 bcf of gas, whereas AA-ON/7 covers an area of approximately 1,089 square kms with estimated resources of 80 MMbbls of oil and 617 bcf of gas. ACL owns 40% participating interest in the Amguri and 35% in the exploratory block AA-ON/07.

Recently, the Company expanded its Exploration and Production asset portfolio by adding one more Block - AA-ONN-2005/1, the only Block in Assam Arakan basin offered under NELP-VII.

Oil and Gas production from two wells, Amguri 10B commenced in at the rate of 1,370
barrels of oil equivalent (boe) per day and increased to 1,660 boe per day in Q2CY08. The production will further enhance, once the adequate facilities are created and further wells are drilled. Currently, the Company is producing 1,700 barrels of oil (boe) per day, and the average production is expected to increase further during the next 2 years. Evidently, the Company is expected to deliver very decent earnings growth from oil and gas segment.

The stock currently trades at 11x its earnings and 1.0x BV.

To see full report: ASSAM COMPANY