Selan Exploration: Are the really digging the Wells?

This company came to my notice as many value investors have bought into it (Parag Parikh, Dolly Khanna).

Has anyone looked into it?

This company has 45-50% PAT margin !!!

They will be drilling new wells starting Q4 which were pending due to regulatory hurdles which would take the production to higer levels and sales could easily multiply by 2-3 times and the stock can easily go into another orbit.

This company looks awesome if you consider the cashflows and the PAT margin its generating. Is it true? Are the oil wells for real? :smiley:

Can a capital intensive company have such high profit margins?

Have a look at this article for the bullishness of value investors.

Coping-pasting from my research note on Selan Exploration Technology

**Selan Exploration Technology

**Introduction **
â Private Player in the field of exploration/production of hydrocarbon
â 3 Proven field (Bakrol, Indora, and Lohar) + 2 (Ognaj and Karjistan)
â Extensive Domain Knowledge
â Better realization per oilfield expected with new 3D sesmic study
â Weak rupee helps it in profit
â Govt Regulation had resulted in flat volume in last2 yrs, which is not removed

Investment Rationales:-
â Only operates in provenoil fields
â Cash rich, debt free, with high OPM of 80%, NPM ~ 40%, high cash flow, high return
ratios (~20)
â Has lower capex requirement as compared to peers
â Lowest production cost per barrel (11 USD)
â Recent share buyback at an average price of 274 â Buyback champion
â Expecting huge ramp-up in production post govt regulatory clearance
â Planning increase production to 5-7L Barrel in 2-3 yr(from ~2L Barrel currently)
â Expecting 60K Barrel/qtr in future as opposed to 40K Barrel/qtr
â Govt profit sharing in Lohar (~35% share), but not in Bakrol (65%). Increase in prodn at
Bakrol, can increase profitability

EPS Estimate
Brokerage Date FY14E FY15E FY16E Target Price
HDFC 17-10-2013 29 332-431
Equirus 19-11-2013 32 38 400

â Regulatory Risk/Env ministry risk
â Lack of oils in oil wells
â Reduced crude oil price
â Execution

Cant paste Charts/Figure in vp. So pasting the link to my blog. Hope this will not create issue with administrator sahab :slight_smile:

Disclosure: Majorly invested in Selan (15% of my pf).

There is already a thread for Selan exploration. Maybe you can merge these posts into that.

Please continue discussions here:


Kindly move the above posts to the above mentioned thread and close this one.

Couldn’t visit your blogspot as it’s open only on invitation basis.can you send invitation link