RELIANCE INDS
Reco price: Rs 842
Target price: Rs 1,001
Reliance Industries (RIL)'s Eagle Ford JV (Pioneer: 42 per cent, RIL: 45 per cent) has made rapid progress, with CY12-13 production guidance having been recently upped by 15-30 per cent. The proportion of liquids in overall production has also risen from 45 per cent in 2010 to 65 per cent presently, helping offset the relatively weak US gas price environment. RIL has also gained, although nationally, on its investment, with recent Eagle Ford transactions being concluded at two times the valuations paid by RIL (on the $/acre metric). RIL's two other JVs, with Chevron (Marcellus) and Carrizo (Marcellus), have, however, yet to show meaningful contribution, with info/guidance also being relatively limited. Buy.
Reco price: Rs 842
Target price: Rs 1,001
Reliance Industries (RIL)'s Eagle Ford JV (Pioneer: 42 per cent, RIL: 45 per cent) has made rapid progress, with CY12-13 production guidance having been recently upped by 15-30 per cent. The proportion of liquids in overall production has also risen from 45 per cent in 2010 to 65 per cent presently, helping offset the relatively weak US gas price environment. RIL has also gained, although nationally, on its investment, with recent Eagle Ford transactions being concluded at two times the valuations paid by RIL (on the $/acre metric). RIL's two other JVs, with Chevron (Marcellus) and Carrizo (Marcellus), have, however, yet to show meaningful contribution, with info/guidance also being relatively limited. Buy.
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