Niko cuts FY production, capex outlook; shares fall

Fri Oct 19, 2012 2:06pm EDT
 
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By Shounak Dasgupta

(Reuters) - Canadian oil and gas producer Niko Resources Ltd (NKO.TO: Quote) cut its production forecast for the full year by about 4 percent due to mechanical issues at one of its blocks in Bangladesh.

Shares of the company fell 15 percent to C$11.73 on the Toronto Stock Exchange in morning trade. The stock was one of the top percentage losers on the exchange.

Niko abandoned a deep-water exploration well off the coast of Indonesia last month after it came up dry, and it is also facing declining gas output at one of its blocks in India.

The company forecast production to be 168 million cubic feet equivalent per day (MMcfe/d) for the full-year ending March 31, 2013, lower than 175 MMcfe/d it forecast earlier.

The fall in production, due to mechanical issues at its Block 9 in Bangladesh, will reduce full-year oil and gas revenue by about $2 million, the company said.

Niko holds 60 percent interest in the 6,880-sq-km onshore block that includes Bangladesh's capital Dhaka. Production from the field began in May 2006 and accounted for 21 percent of the company's oil and gas revenue in the first quarter.

The company -- which also operates in the Kurdistan region of Iraq, Trinidad, Pakistan and Madagascar -- cut its capital expenditure for the full year to $170 million from $210 million it had earlier announced.

DEBT PREPAYMENT   Continued...