Initially this official release left me perplexed and wondering if there are any U turns from the switch from NELP to HELP since this HELP policy appeard to be more pragmatic and market force driven:
However, with little digging seems that today's announcement affirms the continued commitment and resolve towards the same policy and actually an incremental step towards the vision.
My sum-total understanding:
- GOI via DGH had 7 proposal of 107,386 LKM of 2D Data extraction under OLAP till last year.
- ONGC was assigned 40,835 LKM of 2D in 18 states in 2016
- OIL was assigned 7,408 LKM in North East in 2016
- Today' announcement finalized another 48.243 LKM 2D data from the remaining part of the unassigned work.
- With that major chunk of work assignment is done except ~10,900 LKM from the entire OLAP.
Good news for AlphaGeo in the sense that:
From the previous work assigned to ONGC it won contact worth 1300 Crs for 26,905 LKM and ~102 Crs from OIL. Considering the pole position and proven capability the prospect will be very bright for AlphaGeo to emerge as a competitive bidder, shall they choose to participate in the bid for ONGC/OIL work again.
Also, the books looks little better considering the projected cash flow from existing ~1400 Cr. order work which is on track to be completed by Q3,FY19. Blessing in disguise, the delay in assigning this recent work will work in their favor since the existing B/S would not have allowed them to take any more work a year back.
These are my thoughts basis quick reading of todays notification and limited available information. Eagerly looking for more detailed info.
- Invested since last 9 months. Few transactions post that, whenever opportunity was apt.
- This was testing patience but positive that old school value/MOAT thinking still holds true.