Weekly Insight learns from media reports that Reliance Industries (RIL) has drilled 54 new wells in three shale gas projects in America.
During the first nine months of 2012-13, the company witnessed 16 per cent sequential growth in production from its shale gas assets and clocked $330 mn earnings before depreciation and tax.
However, analysts say the returns are not commensurate with the capital investment of $5.2 bn in shale gas projects.
Investment plan: Meanwhile, the firm has lined up Rs 10,653 crore, or $2 billion investment in its Venezuela oil blocks, Rs 42,644 crore, or $8 billion, in expanding capacity in Jamnagar.
In order to finance this investment, the firm has gone on a massive fund raising drive abroad in 2012-13. It is already having surplus cash of Rs 80,000 crore and has just raised Rs 4,264 crore through issue of perpetual bonds (perp bond) to foreign investors.
In a statement on the announcement of the perpetual bond, V Srikanth, joint chief financial officer, said the company was delighted that top quality institutional and retail investors equally participated in the bond offering.
This is a strong testimony to the credit profile of RIL as it extends its debt maturities, diversify sources of financing and, at the same time, retain the flexibility to manage the cost of debt, he said.
Leave a Reply
You must be logged in to post a comment.