Shares of Deep Industries skyrocketed over 19 percent and hit a record high of Rs 473.50 on September 9 after the company bagged an order worth Rs 1,402 crore from Oil and Natural Gas Corporation (ONGC).
The contract spread across 15 years, is for production enhancement operations in ONGC's mature Rajahmundry Asset and marks the Deep Industries' largest project to date, more than doubling its current order book. As of June 30, 2024, the company’s order book stood at Rs 1,246 crore.
"This strategic win positions us to play an increasingly integral role in the evolving oil and gas services value chain. The PEC (Performance Enhancement Contract) framework not only broadens our revenue streams but also enhances our profitability, making it a value-accretive proposition for our stakeholders," Paras Savla, MD, Deep Industries said in an exchange filing.
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Production Enhancement Contracts (PEC) are intended to increase hydrocarbon production from ageing, depleted, and mature fields, extending their operational life by approximately 15 years beyond their original lifespan.
For the Rajahmundry asset, ONGC aims to boost hydrocarbon reserves in the Contract Areas by implementing safe and efficient operating practices, along with employing appropriate techniques and technologies to enhance current production levels and overall hydrocarbon recovery.
At 10.58 am, shares of Deep Industries were trading at Rs 466.45 on the NSE, slightly off its day's high. The order win also sparked a spike in trading volumes in the counter as 51 lakh shares of the company changed hands on the bourses so far, a meteoric rise from the one-month daily traded average of six lakh shares. The stock has been buzzing in the past month, surging over 40 percent in the period.
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