Reliance, Niko shares fall on cut in gas reserve estimate
MUMBAI (Reuters) - Shares in India's Reliance Industries Ltd (RELI.NS: Quote) fell as much as 3.2 percent on Thursday on renewed concerns about gas output after Canada's Niko Resources Ltd (NKO.TO: Quote) slashed the reserve estimate at the KG D6 block, in which both hold stakes.
Reliance has been under pressure from the government and regulators to raise output at the huge KG gas fields, off India's east coast, where production has declined for more than a year, forcing rising Indian imports of expensive liquefied natural gas (LNG).
Niko shares fell 39 percent to an almost 12-year low of C$13.06 on Thursday morning on the Toronto Stock Exchange.
At least two brokerages cut their price targets on the stock.
The Canadian oil and gas producer late on Wednesday estimated that total proved plus probable reserves at the KG D6 block, as of March 31, had decreased to 1.93 trillion cubic feet.
The block had earlier been estimated to hold more than 9 trillion cubic feet (tcf) of gas.
Niko holds a 10 percent stake in the D6 block. Reliance holds 60 percent, while BP Plc (BP.L: Quote) has a 30 percent stake.
Haywood Securities's analyst Alan Knowles said the magnitude of the decline in the proved and probable reserves is far in excess of his expectations.
He cut his price target on the stock to C$40 from C$60. Continued...