ONGC to Scale Up Coal Bed Methane Production in Jharkhand

ONGC, the Oil and Natural Gas Corporation, is an Indian multinational company headquartered in New Delhi, under the Ministry of Petroleum and Natural Gas. ONGC, the Oil and Natural Gas Corporation, established on August 14, 1956, primarily focuses on exploring and extracting hydrocarbons across 26 sedimentary basins in India. Operating 210 drilling and work-over rigs, ONGC also manages a network of over 11,000 kilometers of pipelines. Internationally, its subsidiary, ONGC Videsh, operates in 15 countries. ONGC’s product range includes natural gas, crude oil, motor spirit, kerosene, aromatic-rich naphtha, and LPG. Renowned for its accomplishments in identifying significant Indian basins and sustaining production in established fields such as Mumbai High, ONGC utilizes cutting-edge IOR and EOR methodologies, attaining recovery factors ranging from 25 to 33 percent. The good news for ONGC is that the government reduced the windfall tax on petroleum crude last month to INR 3250 per metric tonne from Rs. 5200 because of the decline in crude oil prices in the international market. This reduction will boost ONGC’s profits as they are required to pay the tax on their crude oil output.

ONGC Market Capitalization:

Currently, the ONGC has Rs. 4,14,394.40 crore in market capitalization and falls under the BSE 100 category. It is now the 15th most valuable listed company in India and the third most valued public sector undertaking (PSU) after the State Bank of India (SBI) with the highest market cap of Rs 7.87 trillion, and the Life Insurance Corporation of India (LIC) stands second after SBI with the market cap of Rs 6.70 trillion, as per the BSE data.

CBM production for 2024:

Coal bed methane (CBM), an unconventional form of natural gas, serves as an alternative energy resource for India. The recent report states that the company plans to produce 170,000 standard cubic meters per day (scmd) of CBM initially from the block, with the intention of increasing the output to 300,000 scmd by the end of the current financial year, as updated by the ONGC in their latest statement.

ONGC stock performance and current price:

The state-owned oil and gas exploration major reported a slight rise in revenue from operations for Q4FY24 at Rs 1.66 trillion, compared to Rs 1.64 trillion recorded in Q4FY23. In FY24, ONGC recorded the highest ever consolidated net profit of Rs 57,101 crore, according to the company. Many analysts are bullish on ONGC stock, and according to ICICI Securities, the stock can show a rally to reach Rs. 340 per share. After hitting a 52-week high of 331.60 today and being up 2% intraday, it is expected to make a good move in the upcoming days.

Conclusion: ONGC is slowly gearing up, and after 10 years, the stock is showing a good move. We can expect a continued rally based on recent developments and upcoming project investments from the company.

Disclaimer: This blog has been written exclusively for educational purposes. The securities  mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.