Asian Energy Services Limited
Q1 FY26
Call date · September 08, 2025
1 · Management Commentary
Key Positives
- Board approved merger of Oilmax Energy Private Limited (OEPL) into Asian Energy Services Limited (AESL), creating a larger, integrated energy and minerals company.
- Completion of Kuiper Group acquisition, expanding O&M and integrated project opportunities across the Middle East and Southeast Asia.
- Recent INR865 crore order win from Vedanta, showcasing ability to deliver large, complex assignments.
- Merger expected to deliver strategic fit, operational and cost synergies, and enhanced financial strength with a net cash balance sheet and improved margins.
- Supportive policy environment and reforms in India, including CRZ area unlocking and Oilfield Regulations and Development Act.
Key Negatives
- Concerns raised by shareholders regarding the fairness and justification of the swap ratio and valuation for the merger.
- GST rate increase from 12% to 18% for oil and gas industry, potentially impacting cost structures, especially for field ownership.
- No disclosure of Oilmax’s detailed historical financials (FY23, FY24) during the call.
Forward Guidance
- Capex plans: Not specifically disclosed; focus remains on low-capex, discovered assets.
- New products/segments: Exploring rare earth minerals and expanding into minerals via quartzite block in Uttarakhand.
- Expected client wins/losses: Actively evaluating bids in the discovered small field round; continuous bidding pipeline.
- Revenue/margin outlook: Asian Energy standalone guidance for FY26 remains INR650–700 crore revenue and INR110–120 crore EBITDA; Oilmax and Kuiper numbers to be consolidated post-merger and acquisition, with guidance to be updated in due course.
- Other strategic initiatives: Integration of Oilmax and Kuiper to create a closed-loop platform spanning exploration, development, production, and long-term field management; focus on international expansion and operational efficiency.
2 · Q&A Highlights
Q 1 (Integration & Synergies): How will the integration of Oilmax and Asian Energy be managed, and what operational synergies are expected?
A (Management):
• Both companies already collaborate on projects with shared senior management; integration plans will be chalked out to maximize synergies and benefit all shareholders.
• Oilmax is also asset-light, focusing on low-capex, discovered assets; cultural integration expected to be smooth.
Q 2 (Vedanta Order & Replicability): Details on the Vedanta order and whether this model is replicable for future contracts?
A (Management):
• Vedanta contract involves full field development, drilling, facilities, and O&M; Oilmax brings subsurface and drilling expertise, Asian Energy brings O&M.
• This integrated model is expected to be replicable for other E&P companies.
Q 3 (Financials & Guidance): What are Oilmax’s historical and projected financials, and how will the merger affect margins?
A (Management):
• Oilmax FY23 and FY24 numbers not disclosed; guidance for Asian Energy standalone remains as previously stated.
• Oilmax and Kuiper numbers to be consolidated post-merger/acquisition; Oilmax margins are higher and will improve combined margins, but sensitivity to oil prices is limited due to low-cost operations and service contracts.
Q 4 (Field Operations & Production): What are the current production levels and future plans for Oilmax’s fields?
A (Management):
• Amguri: 220,000 cubic meters/day gas, 300 barrels/day condensate; ramp-up planned after pipeline connection.
• Duarmara and Tiphuk: Under development, production expected soon.
• Indrora: 100 barrels/day, drilling campaign to start within a month.
Q 5 (Working Capital & Peers): Impact of merger on working capital and comparable peers in the listed space?
A (Management):
• Oilmax is a negative working capital business, which will reduce merged entity’s working capital days and improve financial position.
• No direct listed peers with both asset ownership and large services business in India.
Q 6 (Valuation & Promoter Holding): Rationale for swap ratio/valuation and promoter holding post-merger?
A (Management):
• Valuation done by independent SEBI-registered valuer using risk-adjusted DCF and market-based approaches; fairness opinion provided.
• Promoter holding to drop to 47.3% post-merger (fully diluted); future fundraising or promoter stake increase not decided.
Q 7 (Debt, Guarantees & Liabilities): Will Asian Energy inherit any debt or contingent liabilities from Oilmax?
A (Management):
• No contingent liabilities; Oilmax is net cash and has provided guarantees to support Asian Energy, which will be extinguished post-merger.
Q 8 (GST Impact): Effect of GST rate increase on the business?
A (Management):
• GST increased from 12% to 18%; cost neutral for service contracts as clients pay GST, but may impact field ownership due to oil/gas exclusion from GST.
• Merger will help plug tax leakages from inter-company billing.
3 · Other Key Numbers
- Oilmax current shareholding in AESL: 60.83% (fully diluted ~55%)
- Swap ratio: 117 AESL shares for every 10 Oilmax shares
- Revised capital base post-merger (fully diluted): ~9.2 crore shares; incremental shares issued: ~4.25 crore
- Promoter holding post-merger (fully diluted): 47.3%
- Vedanta order value: INR865 crore
- Amguri field production: 220,000 cubic meters/day gas, 300 barrels/day condensate
- Indrora field production: 100 barrels/day
- Oilmax guarantees provided: >INR150 crore
- Merger completion timeline: ~12 months from call date
- Asian Energy FY26 standalone guidance: Revenue INR650–700 crore; EBITDA INR110–120 crore
- Kuiper acquisition completed: 1st September 2025
- South Rewa CBM block: Under development, ~2.5 years to commercial production; no test production yet
Any other specific financials for Oilmax (FY23, FY24, projections) and detailed Kuiper numbers: Not disclosed