Shares of Oil & Natural Gas Corporation Ltd (ONGC) rallied over 4 percent in early trade on Monday after the state-run oil explorer informed that its overseas investment arm ONGC Videsh Ltd has made a "significant" oil discovery in an onshore block in Colombia.
ONGC Videsh struck oil while drilling an appraisal well 'Indico-2' in CPO-5 block in Llanos Basin of Colombia, the company said in a statement.
OVL is the operator in the block with a 70 percent stake. Geopark Ltd, an independent oil and gas company focussed on Latin America, has the remaining 30 percent interest.
The well 'Indico-2' encountered a net pay of 147 feet which during initial testing produced oil of 35.2 degrees API in commercial quantity at the rate of 6,300 barrels per day.
"Currently, the well is flowing under short term testing with multi bean study for further evaluation," the company said. This is the fourth commercial find in the block by OVL.
Light oil was discovered in the first well 'Indico-1X' in the Indico field during December 2018, and to-date it has demonstrated a sustained flow of 5,200 barrels per day (bpd) with cumulative production of over three million barrels of oil so far. CPO-5 is a large on-land block covering an area of 1,992 square kilometres and offers multiplay exploratory and appraisal opportunities.
"The company now plans to drill more wells to explore the other plays in the block in the immediate future. OVL is also undertaking additional 3D seismic data to map more drillable prospects in the other sectors of the block," the statement said.
OVL has a stake in 7 exploratory blocks in Colombia. These are in addition to two producing blocks with 50 percent in JV company, Mansarovar Energy Colombia Ltd (MECL).
ONGC, being an oil explorer, also benefits from the rising crude oil prices. The Brent oil is trading near 9 months high level.
Since the last one month, the shares of ONGC have gained more than 37 percent amid a sustained rise in crude oil prices.
The stock price of ONGC gained as much as 4.61 percent to an intraday high of Rs 94.00 on the BSE. At 9:45 am, the shares traded 2.78 percent higher at Rs 92.35 apiece as compared to a 0.38 percent gain in the benchmark Sensex.
(Edited by: By Ajay Vaishnav)