Niko: Plan ready to double reserves at KG-D6 block

Written by fe Bureau | Mumbai | Updated: Jun 30 2012, 08:08am hrs
Canadian oil and gas producer Niko Resources, which co-owns the KG-D6 block in India with British Petroleum and Reliance Industries, has prepared a plan to double the reserves at the block, it said in its dreport for the year ended March 2012.

Reservoir performance at our two producing gas fields in the D6 Block has given the company a significant write-down and this is reflected in our financial statements, Edward S Sampson, president and chief executive officer at Niko, said in his note to shareholders.

On the positive side, at D6 alone, reserves are expected to more than double later this year when development plans are approved for existing discoveries. Reliance Industries will spend $300 million for the development of the field, while British oil and gas major BP will spend $150 million. Niko will invest $50 million for development. RIL shares were up 2.5% to close at R737.45 on the BSE on Friday.

Niko posted net loss of $183.3 million for the fourth quarter, compared to a net profit of $6.2 million a year earlier. Oil and natural gas revenues fell 24% to $71.4 million.

Last week, Niko, which owns a 10% stake in KG-D6 block, said it had cut estimates of the proved and probable reserves at the block by 81% to 1.93 trillion cubic feet (tcf) from 9.65-9.9 tcf. This sent RIL shares tumbling on the BSE by 2.58%.