Arun Kumar Jagatramka in Calcutta on Monday. A Telegraph picture

Calcutta, Nov. 13: Gujarat NRE Coke Ltd (GNCL) has set its sights on oil exploration in Australia.

The group has floated a company called Gujarat NRE Mineral Resource (GNMR) to carry out exploration in Australia.

The company has gained access to a virgin block of 10,640 sq km in the Canning basin of Western Australia. Prospecting work is expected to start soon.

Considering the seismographic and other geophysical data, the area is said to be a prospective region for a strike and the group is optimistic about the new move, said Arun Kumar Jagatramka, vice-chairman and managing director of GNCL.

“The past drilling histories are positive in the region and we are confident that we will be successful,” he added.

The new company has joined hands with Rey Resource Ltd, which has the necessary expertise in oil and gas exploration. GNMR will have a 90 per cent stake in this block with the rest being with Rey Resource.

Incidentally, Gujarat NRE has a 20 per cent stake in Rey Resource as well.

The group is raising Rs 40 crore through a rights issue from the existing shareholders of GNMR to invest in the new venture.

All large shareholders of GNCL are also stakeholders in the new company. It was formed a few months ago when GNCL chairman Giridharilal Jagatramka gifted 10 shares of the new company to all shareholders who had more than 500 shares of NRE Coke.

The issue price has been fixed at Rs 2 per share. Every shareholder will have to make a minimum subscription of 5,000 shares.

The new company will be listed at a later date when business becomes robust.

Listing of venture

Gujarat NRE will list an Australian coking coal mine company on the local bourse.

The NRE Avondale mine Down Under is held by Gujarat NRE through its wholly owned subsidiary Gujarat NRE FCGL Pty Ltd.

This subsidiary is being merged with a locally listed entity called Zelos Resources. Gujarat NRE currently owns a 22 per cent stake in Zelos.

As a result, the new merged entity will continue to be listed with promoters holding 85 per cent.