OilMax wants to buy struggling Asian Oilfield

Vol 19, PW 14 (24 Mar 16) People & Policy

No one can quite understand why Kapil Garg-promoted OilMax Energy is in talks to buy the controlling stake held by Mumbai-based private equity fund Samara Capital in seismic contractor Asian Oilfield Services.

Garg, the former head of BG in India, is carrying out due diligence on BSE-listed Asian Oilfield, which has seen its share price fall by more than half from Rs77 on August 5, 2015 to Rs31.60 by March 18, 2016. "Garg sent a team to Asian Oilfield's office in Gurgaon last week," confirms a seismic industry source on March 16.

"He wants to buy a stake and has told Samara. OilMax will make an announcement if its valuation matches what Samara expects." Samara holds 56.34% in Asian Oilfield; another 43.66% is held by small shareholders, foreign institutional investors and other corporate bodies.

Few can understand why Garg wants a controlling stake in Asian Oilfield: the company hasn't won any major orders recently. Three jobs in hand are on hold because Samara is reluctant to release funding: an ONGC contract awarded on May 12, 2015 to shoot 250-sq km 3D at the Baramura Bulge area in Tripura valued at Rs45cr ($7m) excluding service tax; a Rs8.5cr ($1.2m) Oil India contract to shoot 180-lkm 2D at the Deomali, Namchik and JAIRAMPUR extension PEL areas in Arunachal Pradesh; and a Rs13cr ($2m) job awarded by Jubilant Energy and GAIL on November 18, 2015 to shoot 140.5-lkm 2D at block AA-ONN-2002/1 in Assam.