Investment Case

Great Market Outlook

  • With the Indian Government’s recent unveiling of the National Seismic Program (NSP) to appraise the country’s reserves, the Indian seismic market has been expanded greatly with ~Rs 5000 Crore of work on offer up to March of 2019.
  • With reduced competition in the seismic space, and many major players being saturated with work, ASIAN should see an increase its market share and margins in the coming years.
  • With ASIAN being the only company to offer 3D wireless seismic technology in the Indian market, we hope to be the most attractive option to potential customers who are looking to work in harsh environments. We have extensive work experience in a host of challenging terrains, all the way from deserts in Kurdistan to the wet, hilly, forests in Assam.
  • The future for the O&M vertical look promising, with extensions on our current orders and negotiation for more orders currently in the works. Even in a low oil price scenario, ASIAN should continue to see growth in the O&M vertical, as we specialize in being low-cost operators.
  • Expansion into offering other services like EPC, drilling, and decommissioning, is strategically focused on de-risking ASIAN’s revenue streams. Moreover, it allows ASIAN to offer low-cost integrated management solutions to the Indian and international market.

Robust order-book

  • Since being acquired by Oilmax in mid-2016, ASIAN has won 6 seismic orders, worth a total of Rs 700 Crore, with 6 orders already being mobilized and 2 in the process of being mobilized. These orders are for work domestically, given to us by ONGC and Oil India, as well as internationally, for work in Myanmar.
  • We have 10 crews currently active and ready to execute seismic orders, which means that ASIAN is in a good position to successfully execute its current order book on schedule, as well as any future orders.
  • ASIAN also has an O&M order book worth Rs 617 Crore, for a 3-year contract to manage a MOPU and FSO in the EBOK block in Nigeria, with the option for a 2 year extension. The project is already mobilized, which means that ASIAN has reliable cash flow visibility for the next few years.
  • Our total current order book stands at Rs 1317 Crore, with all of it being added since ASIAN’s acquisition by Oilmax, just a year ago.

Financial Turnaround

  • ASIAN achieved profitability for the fourth quarter and the full year ended 31 March 2017, on a standalone basis. It achieved profitability in Q4 on a consolidated basis also.
  • After its acquisition, ASIAN’s new promoters aimed to reduce the its debt-to-equity ratio, through repayment of corporate loans and outstanding liabilities, and to get rid of any deadweight, by selling off any non-strategic assets, to clean up its balance sheet.
  • Significant reduction in consolidated debt of nearly 25% from Rs. 110 Crores in FY 16 to Rs. 83 Crores in FY 17. Hence, the consolidated Debt-to-Equity Ratio improved significantly from 11x in FY 16 to 1x in FY 17.
  • With Rs. 29 Crores of consolidated free cash and bank balance, in FY 17 the company's net debt stands at just Rs. 54 Crores compared to Rs. 100 Crores of debt in FY 16, a reduction of 47%. Furthermore, with Rs. 37 Crores of the remaining Rs. 54 Crores being from the promoter Oilmax Energy itself, ASIAN is virtually debt-free compared to last year.
  • Last year saw a 700% increase in consolidated net worth, from Rs. 10 Crores to Rs. 82 Crores, and a 300% increase in consolidated cash and bank balances, from Rs. 15 Crores to ~Rs. 62 Crores.

Under excellent new management going-forward

  • Since its acquisition in mid-2016 by Oilmax Energy, ASIAN is now run by a very highly qualified management team composed of industry veterans and pioneers, with an average experience of over 35 years working in the industry. Find out more about our illustrious management team.
  • Being an Oilmax company, allows ASIAN to leverage existing capabilities in other areas of the value chain to expand its suite of services, while still maintaining the rigorous standards of quality and performance that ASIAN strives to maintain for its seismic services.
  • As previously mentioned, the company’s focus under the new management team is to be low-cost operators. Going forward, ASIAN intends to cut its costs by focusing on major reductions in non-project related expenses like corporate overheads and G&A, restructuring of existing project costs, and strategically leasing and subcontracting where needed.
  • Under the guidance of its new management team, ASIAN aims to switch from a capital-intensive business model to one in which it avoids owning assets where possible, to keep its capital risk as low as possible, going forward.