Niko Resources

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Niko Resources Ltd.
Type Public
Traded as TSX: NKO FWB: NRY
Industry Petroleum
Founded 1987
Headquarters Calgary, Alberta, Canada Canada
Key people Ed Sampson Chair,Pres,CEO
WilL Hornaday COO,Dir
J.Cummings Dir
W.DeBoni Dir
C.Kathol Dir, corp.sec
W.Robinson Dir
Products Oil Natural Gas
Revenue US$235.716 mil 1h'10[1]Increase78.94%
Net income US$80.797 mil 1h'10[1]Increase23.38%
Total assets $2,245.456 mil sep10[1]11px
Total equity $1,423.58m sep10[1]Increase8.26%
Divisions Niko Resources Cyprus Ltd
Niko Resources Bangladesh Ltd
Niko Resources Cayman Ltd
Niko Resources Trinidad & Tobago
Voyager Energy
Website Niko Resources

Niko Resources TSX: NKO is an India and South East Asia focused oil and gas exploration and production company that shares ownership of many exploration and development properties with Komodo Energy and Reliance Industries. Though it holds exploration rights to 37,000,000 acres (150,000 km2) of land in 7 countries production currently (late 2010) only takes place in India and Bangladesh. Major acquisitions include a $310 million November 18, 2009 purchase of Black Gold Energy (a move that made it a major player in deepwater exploration in Indonesia, the deal was completed in December 2009) followed by the 2010 $37.6 million acquisition of Voyager Energy which expanded its presence in Trinidad (that deal was completed in March 2010).[2][3] Most of the company's revenue comes from India (87.53% in the first half of 2010, revenue from India was 102% higher in the first half of 2010 compared to the first half of 2009).[1] Between 2001 and 2006 the market value of the company grew eleven fold.[4]

In the first half of 2010 daily production averaged about 50,751 boe/d (93.9% natural gas, based on conversion ratio of 6000 cubic feet:1 boe) up 61.67% when compared to the first half of 2009 (31,393 boe/d, 96.1% natural gas).[1] Contribution from the D6 block in India is largely the reason for the higher numbers (the D6 block also helped revenue because of higher realized prices there).

History

Niko Resources started out as an oil and gas company operating mainly in and around the Western Canadian Basin (Alberta and Saskatchewan); it wasn't until 1993 that the company showed interest in operating abroad. Its first venture into India involved the Hazira gas field (located SW of Surat which was awarded to it and the Gujarat State Petroleum Corporation by the government of India on September 23, 1994.[5] First production abroad began July 1995 at Hazira. The Hazira acquisition was the first in a string of large investments in India made by Niko; between 1994 and 2006 all major company moves were made in India.

In 2002 a natural gas exploration discovery it took part in (partnerned with Reliance Industries) turned out to be India's biggest and one of the world's largest for that year (the discovery was made in the Krishna-Godavari basin).[6][7][8]

In 2008 it expanded operations outside of India, beginning with Pakistan (March, awarded 4 blocks), Madagascar (October, Grand Prix Block), Indonesia (November, awarded 4 blocks). Then in 2009 it purchased a 26% interest in a block in Trinidad, the block is held by a consortium of companies each with interests in it ranging from 29.25% (Centrica) to 35% (Petrotrin).[9] When it acquired Voyager Energy operations in Trinidad were expanded (Voyager held 4 blocks in the country including a 9.75% stake in the 2AB block, Niko's first (and only) interest in the region).

Operations

Exploration capital expenditure in the first half of 2010 ($96 million) was spent mostly in India (34.4%), Indonesia (28.1%) and Madagascar (22.9%).[1] In India ownership of all major properties is shared with Reliance Industries. The Cauvery block & NS (North Surat, NELP 2) block are 100% owned by Niko.

INDIA

  • Hazira: It is a matured gas field. The field complies with latest international safety standards like ISO & OHSAS. The field has recently completed cumulative 3 million safe working hours without LTI.
  • D6 block in India (10% interest, production began in September 2008) - Although a major natural gas producer the company has recently been negatively affected by 5 year fixed price contracts.[10] The D6 block was the largest natural gas discovery in company history, currently it also includes a gas processing plant (the block also includes the MA oil fields).
  • D4 Block (15% interest, controlled by Reliance Industries (85%) - located in the Orissa Basin it covers over 4,000,000 acres (16,000 km2) of offshore land. Reserves at D4 are estimated to be double those at D6.[11]
  • NEC25 (10% interest, 90% by Reliance Industries) - covers over 3,000,000 acres (12,000 km2) offshore in the Bay of Bengal.

TRINIDAD

  • Trinidad (Trinidad and Tobago is the largest exporter of Liquid Natural Gas to the USA)[12] - of the five oil fields Niko owns interest in only two of them are controlling interests (they are the Guayaguayare shallow (65%) and deep horizon (80%) fields).

KURDISTAN

  • Kurdistan - Niko has few interests in the Kurdistan region of northern Iraq. Mid 2010, drilling activities were going on & potential test is yet to be done.

MADAGASCAR

  • Madagascar - Few interests in Morondava basin.

Criticism

Between 2003 and 2006 Niko was possibly involved in a corruption scandal involving the $750 million Tengratila and Feni gas fields in Bangladesh (the company accidentally caused an explosion, initially refused to pay for damanges and gave the minister responsible for overseeing compensation claims an expensive vehicle; Niko eventually did compensate the 620 affected families). Investigation into corruption allegations were made by the Royal Canadian Mounted Police in January 2009. Blowout or failure of equipments are generally out of human control & scope. Most planned & prepared operations can fail against response from Mother Nature.[4]

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 "Niko Resources 2010 Second Quarter Report". 2010-11-03. http://www.nikoresources.com/upload/news_release/78/01/2nd-quarter-report-november-2010.pdf.
  2. ↑ "Niko Resources to acquire Black Gold Energy LLC for $310 million". 2009-11-18. http://www.epmag.com/Drilling/drillingnews/Headlines2009/item48884.php.
  3. ↑ "Niko Resources to buy Voyager Energy in $37.6 million stock transaction". 2010-02-08. http://ca.news.finance.yahoo.com/s/08022010/2/biz-finance-niko-resources-buy-voyager-energy-37-6-million.html.
  4. ↑ 4.0 4.1 "Bangladesh: The Blowback of Corruption Canadian company leaves environmental scars, trail of allegations". 2009-08-20. http://www.pbs.org/frontlineworld/stories/bribe/2009/08/bangladesh-a-dirty-deal-back-fires.html.
  5. ↑ "International Finance Corporation World Bank Group". http://www.ifc.org/ifcext/spiwebsite1.nsf/projects/98E07B1A2893E890852576C10080CB81. Retrieved 2010-11-20.
  6. ↑ "India's Reliance finds more gas off east coast". Reuters. 2007-11-06. http://in.reuters.com/article/idINDEL31745220071106.
  7. ↑ "India Drilling & Exploration Conference 2010". http://www.idec2010.com/advisory.html. Retrieved 2010-11-20.
  8. ↑ "What the new gas find by Reliance Industries means". 2002-12-11. http://www.capitalmarket.com/capitalmarket/CMEdit/SFArtDis.asp?SFSNO=431&SFESNO=25.
  9. ↑ "Niko to operate 2AB block offshore Trinidad". 2009-07-09. http://www.offshore-mag.com/index/article-display/3252709015/articles/offshore/company-news/us-gulf-of-mexico/niko-to_operate_2ab.html.
  10. ↑ "Niko Resources sees drop in income, jump in funds". 2010-11-16. http://www.intellasia.net/news/articles/resources/111308616.shtml.
  11. ↑ "RIL's D4 block reserves double those of D6". 2010-10-08. http://money.oneindia.in/news/2010/10/08/d4-block-reserves-double-d6.html.
  12. ↑ "Caribbean Energy Data, Statistics and Analysis US Energy Information Administration". http://www.eia.doe.gov/cabs/Caribbean/LNG.html. Retrieved 2010-11-20.


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