Niko Resources (10% partner with Reliance in KG-D6) has cut 2P reserve estimates from the block by 80% from 9.3TCF to 1.93TCF. The reserve cut relates to D1-D3 and MA fields. Niko guides to production from KG-D6 as follows: FY13 = 29mmscmd, FY14 = 20mmscmd, FY15 = 17mmscmd, and FY16 = 15mmscmd. D6 satellite fields are expected to start production in FY16 while NEC-25 is expected to start production in FY19.
The reserve cut results in reduction in our DCF value of KG-D6 falling from Rs85/share to Rs56/share.
The Niko stock is down 80% in the past year.
Even if Mukesh Ambani wants to conceal facts, his JV partner Niko has transparently stated the facts of KG D6 Oil & Gas Basin. Foreign Investors must be aware while doing JVs with Indian companies like Reliance, Unitech etc
