Selan Exploration a potential multi-bagger: Chugh
Selan Exploration is going to be a potential multi-bagger, says Ashish Chugh, Investment Analyst & Author of Hidden Gems.
January 03, 2011 / 11:10 IST
Selan Exploration is going to be a potential multi-bagger, says Ashish Chugh, Investment Analyst & Author of Hidden Gems.
Chugh told CNBC-TV18, "Selan Exploration has been recommended by us on earlier occasions also and it has gone up few times from those levels but we believe that even at the current price this stock may turnout to be a potential multi-bagger. The financials of Selan Exploration for the past two years have been almost flat. There was not much increase in either production or whatever has been happening is mainly because of the fluctuating oil prices. The revenues and profits are inline with the oil prices but there has not been any substantial increase in production in the last two years. But what is happening behind the scenes is that for the past two years, this company is doing 3D contour mapping of not just the Bakrol field, which is giving them major production as of now but for the other fields also. The new technologies which are available enables the company to identify the reservoirs where if drilling is done will give them about 10-15 times more oil than what the current wells are producing."He further added, "To give a rough calculation, the company is doing about 2.5 lakh barrels every year from about 20 wells, which means that each well is giving them close to 12,000-13,000 barrels, and the new wells are capable of producing 1-1.5 lakh barrels per year which means that if the company starts drilling now two new wells will help them double their production. For the past two years this company has been doing just 3D seismic surveys and contour mapping.""I believe that time is now right that maybe in the next three-six months the company may start drilling wells and 10 wells will almost quadruple there production now. So, the bad part maybe coming to and end and this thing may get start reflected in the company
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