Dec 26, 2012, 03.26 PM | Source: Moneycontrol.com
Private oil & gas producer Cairn India gained more than 1.5 percent on Wednesday as Religare has a buy rating on the stock with a target price of Rs 400.
Media reports indicate that the government has agreed in-principle to allow exploration in some fields beyond the stipulated date. "While a formal announcement is awaited, such a development would be a significant positive for all upstream companies," Religare said in its report.
On Monday, The Economic Times reported that the oil ministry has decided to allow Cairn India to further explore Rajasthan oil fields, a decision that could raise the block's output by over 70%. The decision will also intensify exploration activities in other producing fields operated by ONGC, GSPC and Reliance Industries, government officials said.
"Cairn, which produces 175,000 barrels of oil every day from oilfields in Rajasthan, has been unable to raise its output because of an earlier interpretation of the production-sharing contract (PSC) by the oil ministry that limited exploration activities to the first seven years after a contract is awarded," the report said.
At 15:21 hours IST, the stock rose 1.57 percent to Rs 320.05 on the Bombay Stock Exchange.