Hindustan Oil Exploration surged on news. Know why

Hindustan Oil Exploration, an explorer of energy assets, surged on news that the government will open up fields to private auctions in a bid to unlock reserves from such assets.

The government said 69 fields, which were released by state-run ONGC and Oil India Ltd., will be thrown open to private auctions in 3 months in a bid to unlock 70,000 crore rupees worth of oil or gas assets. These auctions will be conducted under the Marginal Fields Policy, which received the Cabinet's nod.

The private players will be allowed to sell the extracts at market price, the government said.

As a consequence, Hindustan Oil Exploration 3.05 rupees, or 9.3 percent, to 35.75 rupees on the National Stock Exchange

Hind Oil's market capitalisation fell 37 percent in the past one year to 436 crore rupees as investors stayed away after more than a 50 percent plunge in global crude oil prices. The stock is trading at 0.8 times its book value of 40.8 rupees.

Image credit: Indiatimes