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Mint
26-05-2025
- Business
- Mint
ONGC needs a faster ramp-up from KG Basin to beat falling crude prices
Oil & Natural Gas Corp. Ltd (ONGC) reported a standalone Ebitda of ₹19,000 crore for the March quarter (Q4FY25), up 9% year-on-year, despite lower aggregate realization, thanks to higher sales volumes and lower statutory levies. However, an over fourfold increase in dry well write-offs caused ONGC's net profit to drop as much as 35%. In comparison, Q4 revenue was flattish at about 1% year-on-year to ₹35,000 crore, with sales volume rising marginally by about 2%. Gross oil realization fell 9% to $73.7 per barrel, while average gas realization was up 6%. The higher gas price can be attributed to the rising share of new wells gas (NWG) that fetched a price of $9.2 per mBtu (million British thermal units) last quarter versus $6.5 for the rest. NWG now forms about 20% of ONGC's gas mix and is expected to grow by 10-15% over the next 5-6 years. While ONGC's oil and gas production outlook is positive, it should be noted that the pace is slower than initial projections. Total oil and gas production for FY25 was 41.1 million tonnes of oil and oil equivalent (mmtoe), marginally lower than FY24 with slower ramp up of production from the KG 98/2 basin. While FY26 production is expected to increase to 42.5 mmtoe, the management has cut the guidance by about 5%. Slower ramp-up of KG basin output, coupled with the downtrend in crude prices, is a worry. Antique Stock Broking has lowered its crude oil price assumption to $65 per barrel from earlier $75 and $70 for FY26 and FY27; and cut the Ebitda estimates by 20% and 15%, respectively. ONGC's crude oil realization in FY25 stood at $76.9 per barrel, down from $80.9 in FY24. ONGC-BP collaboration The company expects volume support with higher recovery from Mumbai High fields, after it appointed British Petroleum Plc (BP) as technical services provider in January. Mumbai High forms about 25% of the company's total domestic production. As per ONGC, BP has indicated the potential to increase overall production by 60% from the fields over a ten-year period. Notably, BP achieved a 40% production increase in the Rumaila field through similar intervention. ONGC also hopes to get more global partners with the amendment in the Oilfield Regulation and Development Act, 1948 (ORD Act) in March, reducing regulatory uncertainty. ONGC's consolidated capital expenditure (capex) for FY25 was ₹62,000 crore, including exploration & production (E&P) capex at ₹39,000 crore (37,500 crore in FY24), ₹18,000 crore in subsidiary ONGC Petro-additions Ltd (OPaL), and ₹4,600 crore towards acquisition of renewable energy assets. ONGC now has a renewable energy portfolio of 2.3GW, including under-construction projects. OPaL's Ebitda loss is lower in FY25 at ₹320 crore compared to ₹490 crore in FY24. This should drop further with expected increase in realization by 8-9% after its exit from the Dahej SEZ, lower interest cost and change in feedstock sourcing. ONGC's FY26 capex guidance is ₹32,000-35,000 crore across E&P and renewables. Hereon, investors will closely watch the volume pick-up from the KG basin, Mumbai High, and crude oil price movement. ONGC's shares have been largely flat in 2025 so far and trade at an enterprise value of 5.2x FY26 estimated Ebitda, as per Bloomberg consensus. PL Capital's analysts caution that the key risk to its 'accumulate' rating recommendation is asustained Brent price of below $60 per barrel. 'With every $5 per barrel change in oil price realization, consolidated earnings per share is impacted by 8-9%," said the PL Capital report on 22 May. Also Read: ONGC-led JV resumes production from 'PY-3' offshore field in Cauvery basin
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Business Standard
22-05-2025
- Business
- Business Standard
ONGC Q4 results: Net profit falls 35% to ₹6,448 cr on lower oil, gas prices
State-owned Oil and Natural Gas Corporation (ONGC) reported a 35 per cent drop in its March quarter net profit as it realised lower oil prices on almost static output. Net profit stood at Rs 6,448 crore in January-March - the fourth quarter of FY25 (April 2024 to March 2025 ) - compared to Rs 9,869 crore in the same period last year, according to a company statement. The firm got $73.72 per barrel of crude oil that it produced and sold to refiners for processing into petrol and diesel in the fourth quarter, down from $80.81 per barrel a year back. Revenue was up 1 per cent at Rs 34,982 crore. ONGC produced 4.7 million tonnes of crude oil in the quarter, marginally lower than 4.714 million tonnes in January-March 2024. Production of natural gas, which is used to generate electricity, make fertiliser and turned into CNG as well as used for cooking in kitchens, was lower at 4.893 Billion Cubic Metres (BCM) in Q4 as opposed to 4.951 BCM. For the full fiscal (FY25), ONGC's net profit was down 12 per cent at Rs 35,610 crore on almost unchanged revenue of Rs 1.37 lakh crore. Oil price realisation was down 4.8 per cent at an average of $76.90 per barrel in the full financial year. Gas price in Q4 and the full fiscal year was unchanged at $6.5 per million British thermal unit. "The standalone crude oil production during FY25 was 18.558 million tonnes with an increase of 0.9 per cent over FY24. The standalone natural gas production was 19.654 BCM in FY25 as against 19.978 BCM in FY24," ONGC said. ONGC said it drilled 578 wells, the highest recorded in the past 35 years, comprising 109 exploratory and 469 development wells. The firm had drilled 544 wells in the previous 2023-24 fiscal year. The company is drilling more wells as the government has guaranteed a 10 per cent higher price for any gas produced from new wells. "ONGC invested around Rs 62,000 crore capex in FY25, including Rs 18,365 crore in OPaL, Rs 4,600 crore in ONGC Green Ltd for acquisition of PTC Energy and Ayana Renewables," the statement said adding apex in the previous 2023-24 was Rs 37,494 crore. Its overseas arm, ONGC Videsh Ltd, oil production saw a marginal increase of 1.2 per cent to 7.265 million tonnes in FY25 from 7.178 million tonnes a year back. "This positive performance was driven by strong contributions from the key operated/ jointly operated assets" in Colombia and in South Sudan, despite geopolitical headwinds, natural decline, and local issues, it said. Gas production output moderated to 3.013 BCM in FY25 from 3.340 BCM in FY24, primarily due to the end of production life in Block 06.1, Vietnam. OVL's turnover was down at Rs12,995 crore during FY25 from Rs13,197 crore in the previous year, mainly due to lower realised crude oil price ($70.23 per barrel as against $71.47 a barrel in FY'25). Net profit was also down at Rs 418 crore in FY25, as against Rs 490 crore (restated) in FY24. ONGC said it made a total of 9 discoveries (5 in onland and 4 in offshore) during FY 2024-25 in its operated acreages. "Eight hydrocarbon discoveries have been monetised during the FY 2024-25, including the two discoveries notified during the fiscal year of 2024-25.
Business Standard
22-05-2025
- Business
- Business Standard
ONGC slides after Q4 PAT drops 35% YoY to Rs 6,448 cr
Oil & Natural Gas Corporation (ONGC) declined 1.39% to Rs 245.30 after the company's standalone net profit fell 34.66% to Rs 6,448.28 crore in Q4 FY25 as against Rs 9,869.37 crore posted in Q4 FY24. Revenue from operations declined marginally to Rs 34,982.23 crore in Q4 FY25, compared to Rs 34,636.69 crore reported in Q4 FY24. Profit before tax (PBT) dropped 31.82% YoY to Rs 8,767.43 crore in the quarter ended 31 March 2025. Total expenses rose 11.19% to Rs 28,289.49 crore during the quarter compared with Rs 25,441.27 crore in Q4 FY24. Cost of material consumed stood at Rs 1,119.47 crore (up 18.22% YoY), survey cost stood at Rs 873.46 crore (up 20.99% YoY), exploration well cost was at Rs 4,173.04 crore (up 425.59 YoY) during the period under review. The companys net crude oil realization was $73.72 per barrel (down 8.8% YoY) while gas price realization was $6.50 per mmtbu (flat YoY) during the period under review. The standalone crude oil production (excluding condensate) during Q4 FY25 was 4.700 million metric tonnes (MMT), registering a de-growth of 0.29% compared to the corresponding quarter of FY24. The standalone natural gas production during Q4 FY25 was 4.893 billion cubic metres (BCM), registering a growth of 1.17% over Q4 FY24. On a consolidated basis, the companys net profit fell 27% YoY to Rs 7,322.82 crore, while revenue from operations declined marginally by 0.76% to Rs 1,70,811.73 crore in Q4 FY25 compared to Q4 FY24. On full year basis, the company's standalone net profit fell 12.12% to Rs 35,610.32 crore on 0.40% decrease in revenue from operations to Rs 1,37,846.29 crore in FY25 over FY24. ONGC invested around Rs 62,000 crore CAPEX in FY25, including Rs 18,365 crore in OPaL, Rs 4,600 crore in ONGC Green for acquisition of PTC Energy and Ayana Renewables. Meanwhile, the companys board has recommended final dividend of Rs 1.25 per equity share for the financial Year 2024-25 subject to the approval of shareholders in the ensuing Annual General Meeting. Further, the companys board has accorded its approval for extending corporate guarantee support up to Rs 20,000 crore to lenders, i.e., prospective banks/investors of bonds/non-convertible debentures/term loans/or such debt instruments as may be proposed to be raised in one or more tranches by ONGC Petro additions Limited (OPaL), a subsidiary of the company, including for refinancing of debts. Maharatna Oil and Natural Gas Corporation (ONGC) is the largest crude oil and natural gas company in India, contributing around 71% to Indian domestic production. It has in-house service capabilities in all areas of exploration and production of oil & gas and related oil-field services. The Government of India held a 58.89% stake in ONGC as of March 2025.
Time of India
22-05-2025
- Business
- Time of India
ONGC shares in focus after posting 35% YoY drop in Q4 PAT
Shares of Oil and Natural Gas Corporation ( ONGC ) are expected to be in focus on Thursday, May 22, after the company reported a 35% year-on-year decline in consolidated net profit to Rs 6,448 crore for the fourth quarter ended March 31, 2025. The fall in profits was attributed to a significant increase in exploratory cost write-offs, which rose to Rs 4,173 crore during the quarter from Rs 794 crore in the same period last year. Despite the drop in profit, revenue from operations increased 1% year-on-year to Rs 34,982 crore in Q4FY25. However, the full-year FY25 profit slipped 12% to Rs 35,610 crore, and total annual revenue fell 0.5% to Rs 1,37,846 crore. ONGC's board declared a final dividend of Rs 1.25 per share and also approved extending a corporate guarantee of up to Rs 20,000 crore to its subsidiary OPaL for debt raising. The company realized an average crude oil price of $73.72 per barrel, down 9% from the previous year, while gas prices remained unchanged at $6.5 per mmbtu. Crude oil production saw a marginal annual increase of 0.9% to 18.56 million metric tonnes, and ONGC drilled 578 wells, the highest in 35 years. Live Events Also read: IndusInd Bank utilizes Rs 1,325 crore contingency buffer amid accounting lapses and bad loan underreporting ONGC share price performance The stock of ONGC has declined 11.14% over the past 1 year, while it has gained 4.96% year-to-date (YTD). Over the last 6 months, the stock rose 2.70%, and the 3-month performance shows a gain of 3.69%. However, in the past 1 month, the stock recorded a marginal dip of 0.34%. The shares of ONGC closed flat at Rs 248.75 on Wednesday on the BSE. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
