Synergia Energy Delays Cambay Drilling Program
Why we think this is bad
The delay in the commencement of the drilling program at Synergia's Cambay PSC is a significant setback, even though the financial impact is minimized. The company's depressed share price and low market capitalization suggest that the market is pricing in substantial risks or doubts about the company's prospects.
Key Points
- Synergia executed a farm-out agreement with Selan Exploration in 2024 for a $20 million work program at the Cambay PSC
- The work program and budget for 2025/2026 was approved by the Government of India in March 2025
- Selan has conducted workover operations on two legacy wells, but the drilling of the first new well has been delayed from Q2 2025 to September 2025
- Synergia's costs are being carried by Selan under the farm-out agreement, so the delay has minimized the financial impact
- Synergia has implemented cost-saving and overhead reduction measures, including pausing non-essential workstreams related to the Camelot CCS project in the UK
Summary
Synergia Energy has provided an update on its Cambay PSC in India, where it has a 50% working interest. The company executed a farm-out agreement with Selan Exploration in 2024, under which Selan will carry out a $20 million work program including the drilling of three new wells. However, the drilling of the first new well has been delayed from Q2 2025 to September 2025 due to Selan's inability to contract a drilling rig. While Synergia's costs are being carried by Selan, the delay is still a setback for the company's production plans. Synergia has implemented cost-saving measures, including pausing non-essential workstreams related to its Camelot CCS project in the UK.