Alphageo - Creating Seismic Waves


(Sarabjeet Singh) #107

No, I haven’t seen any price targets on Moneylife articles. Moreover we should never trust the targets given in any of these reports as QoQ they may update them based on how business evolves. I mostly refer them to understand about business.

Classis example is during Demonetization majority had downgraded HFC/NBFCs however within few months they are again mkt favorites


(Janme) #108

Some protest is going on in Manipur regading survey. What is the proportion of revenue of Alphageo from survey in Manipur?

http://e-pao.net/epSubPageExtractor.asp?src=news_section.Press_Release.Press_Release_2017.Public_meeting_protesting_on_oil_exploration_in_Manipur_20170607


(Raj) #109

None…please see the split of ONGC order below:

Also, if you notice there are hardly 50-100 people in the meeting. These type of meetings can be arranged by any small political movements. Unless they gather scale worrying about them is of no use.

Regards,
Raj


(Mridul) #110

Re. Manipur, alhageo did some surveys few years back. They are not involved in anything there at the moment. Rather, Asian oilfields at the moment is rather active there.


(sandybansal) #111

I have a basic question on Alphageo. At some stage, the land left for seismic survey will cease to exist. India has planned to complete 2D survey for all the remaining basins by 2019. Does that means, there is limited opportunities for Alphageo beyond 2019.

Also, I think this environment risk is a major risk, if such protests spread to other areas as well.


(Chitresh Lunawat) #112

The recent Reliance BP announcement should also create more orotundities for Alpha geo


(Deepak Saini) #113

Alphageo is gearing up to bid for international projects as well. Successful completion of domestic projects will give them enough experience and confidence. The seismic survey market is expected to grow from current USD 7.54 Billion in 2017 to a projected USD 9.28 Billion by 2022. Tapping up the global opportunities may be the next step for Alphageo.


(nil_71) #114

One Question- how this company will grow if demand for Oil goes down in the market


(Raj) #115

There is a lot of misconception around oil demand going down sooner which is not true. There are some much of details available on net for the same. Peak is at least couple of decades away. One of the articles is below:

Key points to ponder:

  1. Oil find takes a decade or more post a seismic survey. So companies need to plan now to get to exploration stage much later.

  2. India is a oil starved country and imports almost 80% of it’s need. For simple strategic reasons it would try to reduce the import. By 2025, It want to reduce import from 80% to 70%. Hence it will be active in finding as much oil as possible.

  3. NSP(National Seismic Program) is doing a very high level 2D survey with a distance between two lines as 40km. This data will be shared with bidders for the oil fields(@500K USD - heard from some Industry person, no official news ) which will enable them to bid for fields under HELP. This is just the basic data.
    Once a bidder is allocated a field, they need to go with for a 2D survey with much smaller distance between the grid lines or preferably a 3D survey. This will enable them to drill precisely as drilling is a costly exercise.

  4. There are going to be many more open tenders for such orders. An indication of this is below:

  5. Alphageo deliberately decided not to bid till the they stabilize such a huge project(bigger than their lifetime orders). Now I assume they would have started bidding for them. AGM will clarify these things as management talks only during AGM.


    I am hoping that this Q2 they might win some orders. :slight_smile:

  6. With a large execution to boast for alphageo can bid for global tenders as well which opens up new opportunities for them. Anyway they don’t have to bother for their revenue and profit for next 2 years.

Hope I am able to clarify some doubts. I am sure many more will remain. :grinning:

Regards,
Raj

Disc: Invested and have not traded for last 6 months. One of the large allocation in my portfolio.


(chikspat) #116

Applying 2nd level thinking, What company will do after ONGC order will finish?

  1. They do nothing and come back to revenues before say 5 to 10 years, go broke. Unlikely.
  2. Bid aggressively all over world to stay in business and grow. Likely.

Patience is key for such a story, let us see what future brings for this company.

Disc: Invested since last year.


(subbaraogorrepati) #117

Govt of India to implement open access policy from July1. This should open more business opportunities to the exploration and service companies.How is it going to effect Alphageo?


(Chitresh Lunawat) #118

It should have a positive impact on alphageo. But currently they have stopped bidding for new orders and currently only focusing on the 1500 Crore single order which they have got from ONGC.


(Sarabjeet Singh) #119

Hi Guys, do u think recent fall in Crude price cud be the reason behind weakness in stock price recently ?
If true then there cud be tough days ahead

Disc: Invested


(Chirag2015) #120

Fall in crude price could be reason but it seems to be more a sentimental one. There is enough push from the Government on domestic gas and oil exploration- https://www.ibef.org/news/govt-to-launch-national-data-repository-on-june-28.
Also, crude should not see significant drop going forward as it will become unprofitable business for lot of shale gas producers in US and from middle east and Russia’s point of view as well, lower crude price will not be something they would like.
There are enough articles to suggest this over internet. Posting couple of the latest ones I came across;
http://www.cnbc.com/2017/06/27/oil-prices-rise-on-short-covering-expectation-for-us-stockpile-drop.html
http://economictimes.indiatimes.com/markets/commodities/views/why-crude-oil-prices-at-50-is-a-sweet-spot-for-oil-producers/articleshow/59338602.cms

So all in all, things should turn around.


(Saji John) #121

(Saji John) #122

Alphageo’s latest investor presentation http://www.bseindia.com/xml-data/corpfiling/AttachLive/e50ad4df-db62-410c-961f-1af1f93484b3.pdf


(Tarun) #123

As the timing would have it, GOI has published the OALP (Open acreage Licensing Policy) licensing rules:

http://www.petroleum.nic.in/sites/default/files/oalp_modalities_0.pdf

This will help auction 67 small fields. What is interesting is that DGH has classified the entire 67 small fields into 3 zones, first one being ‘Sufficient Data’ on National Data repository (NDR). By extension, does that imply that Alphageo has by now provided ‘sufficient data’ for those zones or will be done by Nov 15th (annual cut of date for application under OALP)?


(Raj) #124

There is nothing new barring one slide. It’s exact replica of what they did publish last year post the big order they won from ONGC.

Awaiting AGM when we could get more clarity.

Regards,
Raj


(hamed) #125

Those tracking this stock, what is your impression, are they able to execute properly till now on this ongc order ?


(Venkatesh) #126

Isnt the ONGC order supposed to to executed by end March 2019. In that case either FY18 or FY19 will see sales of Rs6bn+ which could lead to FY17 EPS doubling from current levels of Rs83. In that case even at a P/E multiple of 10x this looks very interesting. And management has 2 years to win orders to provide visibility for sales beyond FY19E.