For FY20, Oilmax Energy intends to treble its capital spending in order to boost field output

 For FY20, Oilmax Energy intends to treble its capital spending in order to boost field output

For FY20, Oilmax Energy intends to treble its capital spending in order to boost field output

Due to increasing activity in the seismic market, Oilmax's listed unit Asian Energy Services Ltd. (AESL) is likely to have a solid performance in the next months, comparable to the quarter ended September 30, the chief financial officer told Moneycontrol.

Oilmax anticipates capital expenditures of between $5 and $7 million at the conclusion of the 2014 fiscal year.

According to Chief Financial Officer Sumit Maheshwari, Moneycontrol, Oilmax Energy Group intends to boost its capital spending by two to three times in the fiscal year 2024–25 (FY25) compared to the present fiscal year.

According to him, the completion of the Rainbow Gas Pipeline in the Northeast and the obtaining of the required permits for the drilling of wells in the company's specific areas are prerequisites for the capital spending plans for the next fiscal year.

The upstream oil and gas business intends to use its own funds to pay for the capital project. It plans to double its fields' output in the next year. Oilmax anticipates capital expenditures of between $5 and $7 million at the conclusion of the 2014 fiscal year.

"We want to begin production from the fields of Duarmara and Tifuk. Additionally, we want to boost output from the Amguri field. We are running a fresh well campaign in Indrora with plans to build two more fields there. Thus, in contrast to the current year (FY2015), there would be a substantially larger capital expenditure (repeated for fair comparison)," Maheshwari said.

Oilmax owns one block in Gujarat called Indrora and three in Assam called Amguri, Duarmara, and Tifuk.

The CFO said that listing Oilmax on stock markets is not something that is planned for the foreseeable future. The choice made by the firm will be based on whether there are chances for expansion or whether further capital is needed. According to him, the business does not currently have any plans to raise any money.

"At this moment, we do not anticipate receiving any funding for Oilmax. We have plenty capital already. For a few years, we have enough cash on hand to cover our expenses. Should our growth exceed our projections, we will determine the necessary kind of capital raising.

Expectations for Asian energy growth

Because of the increasing activity in the seismic market, Maheshwari predicted that Oilmax's listed subsidiary, Asian Energy Services Ltd. (AESL), will report a solid performance in the next months, comparable to the quarter that ended on September 30. Asian Energy was purchased by Oilmax Energy Group in 2016.

Asian Energy had a net profit of Rs 68.31 lakh for the second quarter of FY24, up from a loss of Rs 12.42 crore for the same period in FY23. In the second quarter of this year, the company's operating revenue was Rs 45.48 crore, up from Rs 24.93 crore the previous year.

Our order book is excellent, and we are doing a better job completing all of our tasks. Performance has improved as a result, and Maheshwari said that we anticipate maintaining the level of performance achieved in the second quarter. The firm now has an order book of around Rs 1,000 crore, and he said that this amount is projected to increase as new business prospects become available in the market.

In response to questions about the company's dismal results in prior quarters, he said that last year was "unusual" because of low seismic activity across India.

In the meanwhile, Asian Energy expanded into exploration and production regions in June 2023 by acquiring a 50% participation share in Oilmax's Indrora block.

upcoming schedules

Maheshwari said that in addition to boosting output from Oilmax's current blocks in Gujarat and Assam, the business intends to buy other properties in the future. Oilmax plans to raise its overall output three or four times to 10,000 barrels of oil equivalent per day (boepd) during the next two to three years.

"We also like to add more room to our reservation. In addition, we plan to purchase more blocks in the next years. Our plan is to add assets every few years as our production volume grows, give them proper care, and then put them into production. He said, "If they are currently in production, we will use the newest knowledge and technology to assist the nation increase output and decrease its reliance on imports.

According to Maheshwari, the business is eager for the next discovered small fields (DSF) round and would want to purchase more blocks. In the next year, he anticipates the announcement of the fourth DSF round.