Company Background & Business Model

Prabha Energy Limited is an upstream oil and gas exploration and production company focused on conventional and unconventional hydrocarbon resources. Established in 2009 and listed in 2025, the company was created through a composite scheme of arrangement approved in August 2024 that consolidated E&P interests from Deep Energy Resources Limited. The company is promoted by Paras Savla and Rupesh Savla who have over three decades of experience in the oil and gas sector, beginning with Deep Industries Limited in 1991.

The company's portfolio includes interests in five exploration and production fields grouped into three assets covering approximately 398 square kilometers with estimated in-place hydrocarbon reserves over 32.45 billion cubic meters.

Operational Assets Overview

1. North Karanpura CBM Block (Jharkhand)

  • Coverage: Approximately 271 square kilometers
  • Partnership: Joint operators alongside ONGC and IOCL with 25% revenue and expense sharing
  • Development: Drilling commenced in 2018 with 68 wells completed
  • Reservoir: Coal seam thickness identified at approximately 65 meters (vs. 35 meters in original plan)
  • Infrastructure: IOCL developing 68-kilometer gas evacuation pipeline to Urja Ganga pipeline
  • Status: Over 60% pipeline connectivity complete, expected commissioning by March 2027
  • Production Testing: Southern wells indicated high to very high gas potential

2. Jharia CBM Block (Jharkhand)

  • Coverage: Approximately 26 square kilometers
  • Partnership: 90% profit sharing under revenue sharing contract with Bharat Coking Coal Limited (CIL subsidiary)
  • Development: 8 wells drilled and tested in first phase; plan to drill 47 additional wells
  • Status: Gas breakthrough observed during dewatering process; progressing toward pilot production
  • Infrastructure: PNGRB authorized 8-kilometer pipeline connection to Urja Ganga pipeline
  • Timeline: Pipeline connectivity expected by January 2027; initial production commencement expected from Q4 FY27

3. Marginal Gas Fields (Rajasthan)

  • Coverage: Three fields in Jaisalmer spanning approximately 100 square kilometers
  • Reserves: Estimated gas reserves of around 1.4 billion cubic meters
  • Infrastructure: Gas gathering station at Bankia with separation, purification, dehydration facilities; 15 kilometers of pipeline connecting wells to gathering station
  • Focus: Optimizing operations and identifying viable gas marketing opportunities

Financial Performance & Operational Update

For H1 FY27, the company reported that net profit exceeded full-year FY26 profits. Current gas sales are through cascades at approximately 20,000 cubic meters per day, described as "minuscule" quantities due to being in the infrastructure development stage. Significant turnover increase is expected from FY28 onward, backed by pipeline connectivity with the national gas grid.

Production Guidance and Timelines

  • Current Production: ~20,000 cubic meters/day (cascade sales)
  • Jharia Block Initial Production: 20,000-40,000 cubic meters/day from initial 8 wells (starting Q4 FY27)
  • Peak Production Timeline: Expected by FY28-FY29
  • North Karanpura Production: Few lakh cubic meters per day initially post-connectivity (March 2027), building to peak over 1-2 years
  • Jharia Full Development: 1.5-2 years to reach peak production after drilling 47 additional wells
  • Combined Peak Production: Expected to exceed 1.5 MMSCMD (15 lakh cubic meters per day)
  • Project Life: Blocks awarded for 25-30 years of production

Financial Metrics & Project Economics

  • EBITDA Margin Expectations: 70-75% at optimum capacity production
  • Operating Cost Estimate: ~20% of revenue
  • North Karanpura ROC: Project payback expected in less than 4 years once at full production
  • Capex Plan for Jharia: INR 500 crore for 47 additional wells
  • Funding Mix: 50% equity, 50% debt/internal accruals

Market Context & Gas Pricing

  • Gas can be sold to anyone once connected to Urja Ganga pipeline
  • Open price mechanism applies to both blocks
  • Sales possible at spot rates through IGX (Indian Gas Exchange)
  • Payments generally in INR though rates governed in USD
  • Current international gas prices mentioned at ~USD 25/MMBtu (up 130% from USD 10.8/MMBtu 8 months prior)

Key Near-Term Triggers (FY27)

1. Pipeline connectivity of Jharia Block (expected January 2027)

2. Commercial production commencement from Jharia Block

3. Pipeline connectivity of North Karanpura Block (expected March 2027)

Management Team

  • Shanil Savla: Managing Director (5 years with group, hands-on project execution, commercials, gas marketing)
  • Rohan Shah: Spokesperson
  • Vishal Palkhiwala: Director and CFO
  • Board Chairman: Premsingh Sawhney (B.Tech Chemical Engineering NIT Warangal, M.Tech IIT Mumbai, 41 years hydrocarbon experience)

Global and Indian Gas Market Context

  • Global upstream natural gas CAPEX driven by power generation, industrial decarbonization, LNG infrastructure expansion
  • India's natural gas consumption: ~180-190 million cubic meters daily
  • Domestic production: ~95 million cubic meters per day (plateaued)
  • Import reliance: 50-52% (mostly LNG)
  • Government target: 15% natural gas share in energy mix (currently 6.5%)
  • India: World's fourth largest LNG importer and regasification market
  • 60% of India's LNG imports originate from Gulf producers (Qatar, UAE, Oman)
  • India's CBM resources estimated at 2,600 billion cubic meters across 12 states