Aban Offshore drills a good order

Aban Offshore had announced on Friday, late in the evening about receipt of an order. It had stated that its step down subsidiary had received a Firm Letter of Award from ONGC for the deployment of the Drillship Aban Abraham for a firm period of 2 years.

The expected revenue from this deployment is estimated at US$ 87 Million (equivalent to Rs.592 crore). The deployment is expected to commence during the fourth quarter of calendar year 2016.

The market is naturally happy with this news as the stock, intra day rose almost 5% at Rs.208.75.  Its 52-week high is at Rs.340 and low at Rs.142.50.

The company most certainly needs such orders and more to get out the loss. It had ended Q4FY16 with a consolidated net loss of Rs.120 crore on a 36% (YoY) drop in net sales at Rs.629 crore. Aban offers offshore drilling services in India and abroad and given the slump in which the oil industry is in currently, this loss did not come as a shocker.