* Third-quarter net loss more than doubles to $93.7 mln
* Oil, natural gas revenue falls 38 pct to $46.5 mln
* Says India production will fall unless new fields are
* Shares fall as much as 9 percent
Feb 14 Canadian oil and gas producer Niko
Resources Ltd said the sale price of gas from its wells
in India may nearly double, offering a ray of hope as the
company reported its seventh quarterly loss in a row on
Shares of Niko, which had a market value of C$635 million as
of Wednesday's close, fell as much as 9 percent to C$8.20 on the
Toronto Stock Exchange.
The stock has lost 79 percent of its value in the past year
as the company suffered a string of exploration disappointments
and struggled with declining output from the D6 block off
India's east coast.
Niko said the gas price was likely to rise to between $8 and
$8.50 per million British thermal units (mmBtu) based on a
pricing formula recommended by an Indian government panel.
The recommendation now goes to the Indian cabinet for
consideration. In India, the federal government sets prices of
gas produced in the country.
The current pricing regime expires in April 2014.
Calgary, Alberta-based Niko has a 10 percent working
interest in the D6 block, which accounted for 61 percent of the
company's sales in the third quarter.
India's Reliance Industries Ltd owns a 60 percent
interest and is the operator of the field, while BP Plc
holds the rest.
"The comments on the gas prices are pretty consistent with
broad commentary coming out of India," said analyst Nathan Piper
of RBC Capital Markets.
"It needs to be confirmed by the government. So there is
that final hurdle. However, a year ago ... different parts of
the Indian government were disagreeing on the price. There is a
lot more agreement now," Piper said.
The government gas pricing panel, headed by C. Rangarajan, a
key adviser to the Indian prime minister, recommended a pricing
mechanism for domestic gas production based on the average of
the import price for liquefied natural gas into India and a
volume-weighted average of gas prices in North America, Europe
Niko, however, said falling production in the D6 block in
the Krishna Godavari basin would erode the effect of a higher
price, unless new supplies come on line. The company has
identified three additional areas in the D6 block for potential
"Niko is a high-impact explorer in Indonesia and it is
really news from Indonesia that will change Niko's share price,"
RBC's Piper said.
The company, which has working interests in 22 offshore
exploration blocks in Indonesia, has abandoned wells in the
country after they came up dry.
It also abandoned wells in Trinidad and cut its production
forecast due to mechanical issues at a block in Bangladesh.
Niko's net loss doubled to $93.7 million, or $1.64 per
share, in the October-December quarter from $40.4 million, or 78
cents per share, a year earlier.
Niko's global quarterly production of 145 million cubic feet
equivalent per day was 34 percent lower compared to a year
The company's oil and natural gas revenue fell 38 percent to
$46.5 million in the quarter, mainly due to production declines
and greater-than-anticipated presence of water in the D6 Block.