Niko Resources

Niko Resources is an India- and South East Asia-focused oil and gas exploration and production company that shares ownership of many exploration and development properties with Komodo Energy and Reliance Industries. Though it holds exploration rights to 37000000 acres of land in 7 countries production currently (2011) only takes place in India and Bangladesh. Major acquisitions include a $310 million November 18, 2009 purchase of Black Gold Energy (a move that made it a major player in deepwater exploration in Indonesia, the deal was completed in December 2009) followed by the 2010 $37.6 million acquisition of Voyager Energy which expanded its presence in Trinidad (that deal was completed in March 2010).[4][5]

Most of the company's revenue comes from India (85.92% in fiscal 2011 up from 81.6% in 2010/87.53% in 1Hlf10), revenue from India rose 106% in the 12 months ended March 2011 compared to only 3.9% for Bangladesh.

The company is investing heavily in Trinidad where in June 2011 it paid $78.1 million for offshore block 5c and is initiating exploration of another block (block 2AB). Though 58% of Niko's net exploration land position is in Indonesia (16.7M acres or 10X more than India) exploration expenditure in India has increased from 1.4X higher than Indonesia in 2010 to 2.6X higher ($50M vs $19M), and is forecast to increase to 12X higher in 2012 due to drilling the D4 and D6 blocks. In terms of gross land holdings about a quarter of all land is in India (35,187 km2) Between 2001 and 2006 the market value of the company grew elevenfold.

History

Operations

Exploration capital expenditure in the first half of 2010 ($96 million) was spent mostly in India (34.4%), Indonesia (28.1%) and Madagascar (22.9%).[15] In India ownership of all major properties is shared with Reliance Industries. The Cauvery block & NS (North Surat, NELP 2) block are 100% owned by Niko. As of March 2011 total 2P reserves are about 200 million barrels of oil equivalent (1.2 trillion MMcfe) 64% of which is natural gas; that represents a 24% overall decline since 2010 (proved reserves saw the biggest decline down 29%). 98.6% of proved reserves is natural gas.[16] Less than 2% of production/revenue comes from Canadian and Bangladeshi condensate. Currently (June 2011) only 2 of the 7 countries Niko has major operations in contribute revenue; The other five countries hold 41.8% of total assets by value.[3] Though expansion outside of India is significant the country remains the most important source of cash flow and production with revenue per Mcfe of oil/gas production nearly twice that of Bangladesh. Production and earnings are forecast to fall significantly in 2012 due to lower gas production at India's D6, D4 and 9 blocks and new terminal maintenance costs from the D6 block.

INDIA Hazira: It is a matured gas field. The field complies with latest international safety standards like ISO & OHSAS. The field has recently completed cumulative 3 million safe working hours without LTI. The 50 km2 block (onshore and offshore) is 33% owned by Niko and contributes approximately 3% of total revenue (as of June 2011). D6 block in India (10% interest, production began in September 2008) - Although a major natural gas producer the company has recently been negatively affected by 5 year fixed price contracts.[17] The D6 block was the largest natural gas discovery in company history, currently it also includes a gas processing plant (the block also includes the MA oil fields). Mining licenses expire in 2028. Contributed 85% of revenue in the quarter ended June 2011. Natural gas produced is purchased under long-term contracts and sold on the spot market. D4 Block (15% interest, controlled by Reliance Industries 85%) - located in the Orissa Basin it covers over 4000000 acres of offshore land. Reserves at D4 are estimated to be double those at D6.[18] NEC25 (10% interest, 90% by Reliance Industries) - covers over 3000000 acres offshore in the Bay of Bengal.

TRINIDAD Trinidad (Trinidad and Tobago is the largest exporter of Liquid Natural Gas to the USA)[19] - five of the nine oil fields Niko owns interest in are controlling interests up from just two (Guayaguayare shallow (65%) and deep horizon (80%)) in 2009. In June 2011 Niko acquired a 25% interest in oil block 5C (covers 325 km2) from Canadian company Sonde for $75.5 million cash making Trinidad a core area for the company.[20] In Trinidad exploration licenses are issued as production sharing contracts (PSC's).[21]

KURDISTAN Kurdistan - Niko has few interests in the Kurdistan region of northern Iraq. Mid 2010, drilling activities were going on & potential test is yet to be done.

MADAGASCAR Madagascar - Few interests in Morondava basin.

Production

Averaged over the 2011 fiscal year (ended March 31) production was 294,765 Mcf (49,127 boe)/d due entirely to new production from the D6 block (oil increased 97% to 2784 bbls/d (9.4% of total), gas increased 22.3% to 278,060 Mcf (46,343 boe)/d (94.3% of total).[22] In the first half of 2010 daily production averaged about 50,751 boe/d (93.9% natural gas, based on conversion ratio of 6000 cubic feet:1 boe) up 61.67% when compared to the first half of 2009 (31,393 boe/d, 96.1% natural gas).[15] Contribution from the D6 block in India is largely the reason for the higher numbers (the D6 block also helped revenue because of higher realized prices there).

type	Public
industry	Petroleum
foundation	1987
location city	Calgary, Alberta
location country	Canada
key people	Ed Sampson (Chair, Pres., CEO) Will Hornaday (COO, Dir) J. Cummings (Dir) W. DeBoni (Dir)
products	Oil, Natural Gas
revenue	US$194.464 mil Ytd June 2011 14.4%‡R1R‡‡R2R‡‡R3R‡
net income	US$(54.334) mil Ytd June 2011 (1h10: $78.23M)
assets	$1,830.11 mil June 20117.3% qoq
equity	$1,127.47 mil June 20112.9% qoq
divisions	Niko Resources Cyprus Ltd Niko Resources Bangladesh Ltd Niko Resources Cayman Ltd Niko Resources Trinidad & Tobago Voyager Energy
num employees	213
num employees year	2011
website	nikoresources.com

History

Operations

Production

Criticism

See also

References