ONGC shares snap 2-session losses; jump 4% post Q1

Shares of Oil and Natural Gas Corporation (ONGC) climbed nearly 4% in early trade on Tuesday, in sync with broader market, a day after the state-owned oil and gas company released its June quarter earnings report. The PSU oil company snapped its two-session losing streak after falling nearly 10% in the last two trading days.

ONGC shares opened higher at ₹316.30, up 2% against the previous closing price of ₹310.15 on the BSE. In the early trade, the oil heavyweight gained as much as 4% to ₹322.50.

At the time of reporting, the shares of ONGC were trading at ₹314.80, up 1.5%, with a market capitalisation of ₹3.97 lakh crore.

At the current level, ONGC shares trade 8.6% lower than its 52-week high of ₹344.60 touched on August 1, 2024, while it has risen 83% from its 52-week low of ₹172.20 hit on August 7, 2023. In the calendar year 2024, the stock surged 54%, while it gained over 16% in six months, and nearly 6% in a month.

For the first quarter ended June 30, 2024, ONGC posted a decline of 42.8% in consolidated net profit at ₹10,236 crore as compared to ₹17,893 crore in the same period a year ago. Sequentially, the profit dropped 11% from ₹11,526.53 crore in the March quarter. This was attributed to higher-than-expected depreciation and dry well write-offs, and decline in other income sequentially.

The revenue from operations rose 1.7% to ₹1.66 lakh crore in Q1 FY25, compared to ₹1.63 lakh crore in the corresponding period of the previous year. On the operating front, earnings before interest, tax, depreciation and amortisation (EBITDA) climbed to ₹18,617.5 crore, down 4% YoY.

As per the earnings report, crude oil price realisation from ONGC’s nominated fields was $83.05 per barrel as compared to $76.36 per barrel in the year ago period.

During the quarter under review, total crude production was down by 1.4% to 5.23 million metric tonnes (mmt), while natural gas production dropped 4.1% to 5 billion cubic metres (bcm) as compared to the corresponding period of the last year.

ONGC, in its earnings report, says that it declared a total of 5 discoveries in FY’25 so far. Out of these, 2 are prospects (1 in onland, 1 in offshore) and 1 is a new pool (onland) discovery. 

In FY24, ONGC’s total oil production from nomination blocks stood at 19.2mmt (down 1.5% YoY), while gas production stood at 19.3bcm (down 3.3% YoY). This was mainly due to continuous delay in ramp up from KG-DWN-98/2, in the Krishna Godavari Basin (KG, Krishna-Gadavari), located off the coast of the Bay of Bengal.

Last month, the company in an exchange filing said that it had commenced oil production from the Block KG-DWN-98/2 Cluster-2 asset via a floating production, storage and offloading (FPSO) vessel in January 2024. The Company has planned to open another well and flow gas to the onshore terminal next month through the newly laid subsea gas pipeline, another milestone achievement in the offing.

Besides, the oil and gas major also started its production from the Coal Bed Methane (CBM) block in Bokaro, Jharkhand.  CBM is an unconventional source of natural gas and an alternative source for augmenting India’s energy resources. It began with an initial production of 1,70,000 SCMD (standard cubic meters per day) and is expected to ramp up to 3,00,000 SCMD by the end of the current financial year.

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