21st Dec 2015 09:10
LONDON (Alliance News) - Indus Gas Ltd on Monday said its profit rose in the first half of the financial year with revenue seeing a material lift as the company continues to expand operations in India.
The India-focused gas company reported a rise in pretax profit in the six months ended September 30 to USD14.3 million from USD13.0 million a year earlier, as revenue rose 33% to USD22.6 million from USD17.0 million.
The company said its production was stable over the period, with all of its gas being sold under offtake agreements meaning it did not require any 'Take or Pay' invoicing in the period.
Take or Pay refers to a contract whereby the buyer either purchases the gas from the supplier at a pre-agreed price or faces paying the supplier a penalty.
"Indus has seen consistent offtake during these six months as a result of stable operations at Ramgarh. This has resulted in no requirement for 'Take or Pay' invoicing which is a pleasing result for all parties and demonstrates a robustness in our base business," said Chairman Peter Cockburn.
State-owned GAIL, which owns a power plant near the company's operation, purchased 5.30 billion cubic feet of gas in the first half of the financial year as Indus's main customer. Indus said it continues to generate USD5 per million British thermal unit, the same as a year earlier, but Indus is in talks about negotiating a new price.
Indus Gas has a 90% interest in Block RJ-ON/6 in the Rajasthan state in western India. The block is part of the Indus basin.
Indus said it is also finalising a second contract with GAIL and another company for additional gas supplies to a new 160.0 megawatt turbine.
Since April, Indus has drilled six new appraisal wells on its acreage, and the company said it will submit a final development plan for the area outside of its existing SGL mining area in the first quarter of 2016.
Indus shares were down 1.1% to 115.18 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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