A mining stock surged 10 percent after securing a Rs.158 crore contract from Reliance Industries Limited for coal bed methane (CBM) production. The deal marks a significant milestone, enhancing the company’s growth prospects in the energy sector.
Price Movement
During Wednesday’s trading session, South West Pinnacle Exploration Ltd’s share price reached an intra-day high of Rs.165.27 per share, rising 10 percent from its previous close of Rs.150.25 each. The shares have retreated since then and currently trading at Rs.157.00 per share. Over the past five years, the shares of the company have delivered over 770 percent.
What Happened
South West Pinnacle Exploration Limited (SWPE), a comprehensive drilling and exploration service provider specializing in natural resources, has secured an extended contract for coal bed methane (CBM) production from Reliance Industries Limited (RIL), a prominent private sector company in India.
This contract involves production hole drilling for CBM in Madhya Pradesh and will significantly expand current operations by introducing additional rigs, equipment, and workforce.
The extended contract holds an aggregate value exceeding Rs.158 crores and includes provisions for up to three additional six-month extensions. SWPE has previously completed two CBM-related projects for RIL and has been successfully executing Phase 1 of the current contract for over 14 months.
This extension to Phase 2, along with potential future extensions, is expected to substantially boost the company’s order book, providing stable business growth over the medium to long term.
Management Commentary
Mr. Vikas Jain, Chairman & Managing Director, commented on the recent development, “I am pleased to announce the extension of the ongoing contract from Reliance Industries Ltd. (RIL) for production hole drilling for CBM with a provision of three further extensions of six months each. This will almost double the present revenue from RIL.
I am confident of continuing the trend in the times ahead and emphasize that such a healthy order book sets a clear roadmap for the next three years and augurs well with the company’s medium to long-term vision. CBM production is a non-conventional oil and gas source of energy, and very few companies in India operate in this domain.”
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Order Book
The company is currently working on 15 projects across various domains nationwide, catering to both private and public sector clients, with a total contract value now reaching Rs.495 crores.
Additionally, the order book has reached an all-time high, with a record Rs.309 crores in new orders secured during the first nine months of FY 2024-25.
Financial Overview
In its latest financial update, the company reported remarkable net sales of Rs.27.35 crore in Q2 FY25, reflecting an 18 percent increase from Rs.23.27 crore in Q2 FY24. Moreover, net profits fell 68 percent to Rs.0.31 crore, compared to Rs.0.97 crore in the same period.
Company Profile
South West Pinnacle Exploration Ltd (SWPE), founded in 2006 and based in Gurgaon, Haryana, is a leading provider of drilling and exploration services, specializing in mineral and unconventional energy resources.
Written by – Siddesh S Raskar
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A mining stock surged 10 percent after securing a Rs.158 crore contract from Reliance Industries Limited for coal bed methane (CBM) production. The deal marks a significant milestone, enhancing the company’s growth prospects in the energy sector. Price Movement During Wednesday’s trading session, South West Pinnacle Exploration Ltd’s share price reached an intra-day high of
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