Hindustan Oil Exploration Company Limited (HINDOILEXP) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q3 and 9-month FY26 earnings call hosted by Hindustan Oil Exploration Company Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation completes. Should you need assistance during this conference call? Please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Lonnie Soni from Ernest & Young, Investor Relations Team. Thank you, and over to you, Mr. Lonnie.

Thank you. Good day, everyone, and welcome to the Q3 earnings call of Hindustan Oil Exploration Company Limited. The company published its results on February 13th and has uploaded the investor presentation on the exchanges yesterday. I trust all of you have had the opportunity to review them. Before we start, a disclaimer. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Participants are cautioned not to place undue reliance on these forward-looking statements while making their investment decisions. On that note, let me introduce you to the management participating with us in today's conference call. We have with us Mr. R. Jeevananda, Managing Director, Mr. Sensil Nassim, CFO, and Ms. Josephine Desi, Company Secretary. Without further ado, I would like to hand over the call to Mr. Jeevananda. Thank you, and over to you, Thank you.

Good morning, everyone, and welcome to the quarter 3 financial year 26 earnings call. From our team, I have Krishnan Raghavan, our Chief Technical Officer, and Sandal Luthan, our Chief Financial Officer, joining me on this call. I will start with the updates on the northeastern region. Let me begin with an update on the Karsang blog. As of today, we have drilled eight wells. And ninth well is in progress. Out of eight wells, five wells are oil wells and sixth well is completed as gas well. The other two wells will be perforated once the drilling of the ninth well is completed and will be hooked up for production. Sixth well encountered with well control issue is resolved and converted as gas producer. It was tested for production and with a minimum choke, it can be on continuous production of about 2 million standard cubic feet per day. The results from the 6th well authenticate the substantial volume of gas which can be commercialized at the earliest once a northeast gas grid is fully operational. Though we have completed the drilling of 7th and 8th well, will be perforated along with 9th well once the drilling of the 9th well is completed as all the 3 wells are in the same plint. You are aware that we have secured environmental clearance for drilling 40 development wells and 3 exploration wells in the block. We will continue to drilling to reach the full potential of the block, subject to partner's approval. Our current production level is about 800 barrels per day, and some workover of existing wells could not be taken up due to repair of workover rig after the well control issue. We earnestly hope that with the support of Oil India Limited, we can unlock substantial value for all stakeholders in the blog. G&G review of the data of newly drilled wells with the data of old wells authenticate the potential of the field already communicated by GTA. We have received responses to the expression of interest for a 2000 Aspar rig as well as 1000 Aspar rig. We will finalize the drilling rigs to progress further. For the Dirac field, the revised field development plan has been approved, enabling an extension of the block. We plan to drill a well in North Dirac, targeting the burial formation. Based on the responses to the expression of interest for a 2000 oscar rig, we will finalize the drilling contract upon receipt of the formal extension letter from the Government of India. Dirac gas sales for the current quarter is 13 million standard cubic feet per day, while the offtake in the previous quarter was 14 million standard cubic feet per day. Accordingly, sales volume of the current quota is 0.31 BCF compared to 0.34 BCF in the previous quarter for our share. Condemnate protection is 5,614 barrels compared to 5,858 barrels in the previous quarter. Price realized in the current quota is 7.32 dollars for MMPTU compared to 7.8 in the previous quarter. While the field with an existing well has the capacity to produce up to 45 million standard cubic feet per day, production has been constrained due to limited demand. It can be seen that IGGL has hooked up the connection up to Numligar from Wawati and commissioned it. It is to note that mechanical completion of the DNPL line also has been completed. Now, the connection of DNPL line with the IGGL line is yet to be completed, expected by end of March 2026. Good progress has been made. We are closely watching the development to augment our capacity to meet the increase in demand. We hope that the increase in opting will occur before the end of the fourth quarter of the current financial year, ending 31st March 2026, or early first quarter of 26-27. We anticipate the grid to be operational within... Financial year 26, 27. We will augment our capacity by drilling in North Iraq and by drilling three more development wells in Iraq. This will enable us to increase the sales volume to meet the rising demand by connecting the Northeast gas grid to the National gas grid. Block A-ONHP 2017-19, which we refer to as Block 19. This is an area adjacent to Dirac, known as the Greater Dirac, and is analog to the Dirac structure. We have received the environmental clearance. We have also secured two-year extension, effective December 2025, to drill two additional, to drill exploration wells. Regarding the Umathara block, we have 10% participating interest in this block, where IOCL is the operator holding 90% participating interest. IOTL has started drilling the first development well. And we have drilled up to 4,300 meters and tested, needs stimulation, and this will be after completing the second well. We endeavour to complete our drilling in the northeast within two years to commercialise the discovered resources to meet the increased demand on completion of the eastern gas grid. Moving to our Cambay block, we have drilled two wells in North Balhol, one well flowed oil in Balholpe, which will be put on production, and the second well is planned to sidetrack for Babagru formation. With this, we will have four wells on production from North Balhol. We plan to drill two wells in Azjol. We also expect to receive final clearance for the ring-fenced production sharing contract, along with the extension of the polished block. Following the extension, we will insert SRP in existing wells and drill additional wells in polish. These activities are expected to enhance the value across the Kambay assets. Overall production from the Kambay wells remains stable at 0.32 mm SCF of gas in quarter 3, financial at 26, compared with 0.33 mm SCF D in quarter 2. Now I will talk about our offshore blocks in Cauvery and Mumbai High. Coming to the Mumbai offshore blocks, In case of B15, the GNC review and preparation of the development plan is in progress. Given the water depth of about 40 meters, we should be able to put the field of production within about two years. In block P80, we hold 100% participating in this. Protection in the current quarter is 45,742 barrels of oil and 0.4 Bc above gas. Come back to 31,468 barrels of oil and 0.23 Bc above gas in the previous quarter. During this quarter, the average gas price realized is 10.5. For MMBTU, compared to US dollar 10.62 in the previous quarter, our plan to work over the D1 well continuous and plan for drilling additional three wells in progress, which we will start after the forthcoming monsoon. And we have sold about 417,000 barrels of crude oil to HPCL in accordance with the crude uptake and sales agreement, title and risk transfer, and insurable interest transferred to HPCL at the offshore delivery point on 25th September, 2025. Nearly three weeks after taking the custody of the crude, HPCL raised a concern regarding the contamination. While the COSA does not include any warranty or representation regarding the crude quality, and therefore there is no basis for any claim or cost on us, And we are actively pursuing all available avenues to realize the outstanding news from HPCL. Cauvery Offshore Block, based on the study by PetroVietnam, we propose drilling two infill wells, one appraisal well through the existing platform and one exploration well outside the platform. The project remains economically attractive even at a PPAC pricing given the minimal incremental capital requirement and the availability of substantial unrecovered costs. Moving to the quarterly results, there were EBITDA for the current quarteries. 31 crores in the Consol accounts, compared to 25 crores in the previous quarter. We remain committed to drilling a total of 18 shallow wells and 3 deep wells in Carson, 4 wells in Dirac, 2 wells in Greater Dirac, and 2 wells each in Azure and Pollage in our onshore assets. To unlock the potential of our offshore fields, we plan to drill 10 offshore wells, 3 wells in POI-1, 3 wells in B-80, and 4 wells in B-15. Timing could change, but it is our endeavor to complete the drilling to unlock the value of all our assets. Achyovici's reserves and resource potential are estimated about 100 million barrels of oil equivalent for its share. These resources can be developed in a cost-effective manner, offering substantial value creation for all stakeholders. We remain confident in our ability to navigate temporary challenges and committed to progressing our drilling program and monetizing the discovered resources and reserves and resources. Now, I will now hand over to Stendhal, our CFO, to take you through the financial results in detail.

Thanks, Mr. Jeeva. Good morning, all. Stand-alone revenue for this quarter is Rs. 77.32 crores compared to Rs. 321.51 crores in the previous quarter, which includes crude oil sale of Rs. 258.78 crores from BIT field. Revenue from gas sale from BIT for the current quarter is Rs. 40.22 crores compared to Rs. 22.94 crores in the previous quarter. Current quarter revenue increase in BID is mainly due to continuous production of gas, which is 401 MMSCF in this quarter compared to 229 MMSCF in the previous quarter, which was impacted by monsoon disruptions. In the case of Dirog, revenue for the current quarter is Rs. 23.78 crores compared to Rs. 26.57 crores in the previous quarter. During this quarter, 314 MMSCF of gas was sold compared to 339 MMSCF of gas sold in the previous quarter. Similarly, 5614 barrel of oil was sold in this quarter compared to 5858 barrel of oil sold in the previous quarter. The decrease in revenue is mainly due to less uptake from gas customers and margin reduction in selling prices. In standalone accounts, the field operating expenses for this quarter is Rs. 60.34 crores compared to Rs. 46.51 crores. Statutory levies are Rs. 12.44 crores for the current quarter compared to Rs. 10.6 crores in the previous quarter. Similarly, total cost without stock adjustment in the current quarter is Rs. 87.7 crores compared to Rs. 71.5 crores in the previous quarter. The increase in expenses is mainly due to increase in production in BITP. Stand-alone EBITDA for the current quarter is Rs. 23.89 crores compared to Rs. 28.81 crores in the previous quarter. Profit after tax for the current quarter is Rs. 11.96 crores compared to Rs. 19.04 crores in the previous quarter. In consolidated accounts, the revenue from operations for this quarter is Rs. 81.04 crores compared to Rs. 64.53 crores excluding crude oil share in the previous quarter. Total expenses without stock adjustment in the consolidated accounts for the current quarter is Rs. 94.32 crores compared to Rs. 85.95 crores in the previous quarter. In consul accounts, a bid-off for this quarter is Rs. 30.99 crores compared to Rs. 25.15 crores in the previous quarter. Consolidated profit after tax for the current quarter is Rs. 8.28 crores compared to Rs. 2.83 crores in the previous quarter. India Ratings has reaffirmed the rating in DA for Rs.500 crore's bank loan. With the internal accrual and continued production and with the borrowings for capital expenditure as required, we will meet all our obligations. Thanks and back to Mr. Jeeva.

Thanks, Sandal. We can now open the forum for questions.

Thank you very much. We will laugh again with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Participants, you may press star and want to ask a question. We have the first question from the line of Gautam Rajesh from Leo Capital.

Please go ahead.

Hi, Sargatman. Thank you for the opportunity. My question is, what is the exact status of the North East-led connectivity for DevOps? The PPT basically mentions that the mechanical work is done. What all is pending here, sir, between now and when the connectivity happens?

See, as we understand from the people whom we have talked to them, that one, as I told you in the last quarter itself, they have connected the Gawafati to Numbligar. Now from Dulyajan to Numbligar, that is the DNPL existing line, they need to have 50 kilometers line is to be repaired and that mechanical completion has been fully completed in a way that the line is ready to be connected to the IGG a line at Nubligarh. For that, they may look for some shutdown of the refinery for some days. Once that is done, then the line will get connected. That will immediately augment the... See in a manner that, as at the moment it is established from the outside, gas can come up to Nubligarh. Now the gas from Dulyaja... So, more out of some that could be possible when this connection is made. That is a shorter duration work. We expect it should be get completed by March. And the augmentation of the uptakes should take place at least by the first quarter of the next year.

Understood, albeit from my side.

Gautam, do you have any further questions?

No, no, that is it from my end. Thank you so much.

Thank you. We will take the next question from the line of Harshit Khadka from RoboCabot. Please go ahead.

Thank you for the opportunity. Sir, as per our internal budgets or estimates, what can be the net production for FY27 and FY28 and the debt level for the same period?

See, 27, 28 would be the, we are depending on the north-east grid line connected, and that will increase our production by at least another three-fold increase. That's what we believe. So then we don't intend to borrow anything for onshore developments. So that would be the immediate low-hanging fruit which we can go for it.

Okay. Sir, can we expect Dirac to go to 45mm SCFD from Q1 FR27 itself, and this additional gas offtake will be consumed by which customer?

It will get into the grid, you know. Once it gets into the grid, then it is on the... anybody can consume. There is no regular customer required for you. Which can, you can enter into any long-term arrangement, short-term arrangement, whatever it is, the gas supply will go up to the, up to Azira, right?

All right.

Thank you. We have the next question from the line of Dhruv Ravani from Shreeji, Prince of LLP. Please go ahead.

Sir, can you give me some timelines on the work over well for BAT?

I think we are supposed to do it, but by all probabilities, we should be able to immediately after the monsoon.

So, what was supposed to happen in Feb will now happen in post-Montswar?

Yeah, I think we are trying to do that before 15th of May, but by all most likely it will be happen after the month soon.

So, any specific reason that we are unable to source the rig or any further technical challenges?

It is not only sorceric, and... There is an onshore activities that are going in a full swing in eastern region because as we are speaking, we are drilling on the wells and Carson and some resource constraint because we have to get the money from HBCL. So with this resource constraints, I think we will be able to do it in the, after the monsoon would be sure and before the monsoon is little doubtful. Okay.

And are we on track for the PI1 wells which were supposed to start in April?

So, PY1, well, we can go up to still October. There should not be any problem of drilling. And people are trying to get the rig at the lowest possible rates. They are trying to do whatever the best they can do to start the drilling at the earliest. As I told you, you know, the offshore campaign is a little getting delayed because of the impact of the revenue. Oh, revenue regulation.

Thank you. That's my favorite.

Thank you. We have the next question from the line of Sukrit Department from iSight Pentrate Private Limited. Please go ahead.

Good afternoon to the team. I have two forward-looking questions. My first question is... Beyond the production guidance, how will Hindustan oil manage risk and uncertainty in the B80 field and the developed phase 2 development, particularly around reservoir performance, regulatory approvals and execution timelines? What frameworks will ensure... Resilience if outputs or approvals don't move as flat. I want to understand your point of view on this. Thank you.

Okay. First of all, two questions you raised. One is about the uncertainty, another one is about the risk. So, we don't find any uncertainty in these events. Risk is akin to the oil and gas business, which is below the subsurface, and that is the only risk, and the risk is more mitigated by already drilled the number of wells. So, Dirac, we don't have any risk as expected. And the risk is much limited. And similarly, in DIT also, there is no problem on the reserves. There is no problem on the reservoir. And at the moment the government of India is pushing for drilling maximum number of wells, there would not be any constraint from the government of India to getting the approvals. So, as usual, some small delays here and there will take place. That won't impact the operations to build the wealth as well as polygons production.

Thank you, and best wishes.

Thank you. We will take the next question from the line of Sabri Hazarika from MK Global Financial Services. Please go ahead.

Yeah, good morning. So, first question is on D-Rock. So, how much production you expect it to go up to once this notice gas grid DNPL connectivity happens?

I think we can go to the full potential, which is about 42-45 million cubic feet per day.

And currently, what is the production?

13.

13, right. So, this DNPL will have enough capacity to take care of your growth as well as Oil India's own increase, right?

This will be about additional minimum about 1 to 1.25 million cubic meters per day. That itself is about, say, 35 to 45. So, even our volume additional is... Assume it another 30 million, the balance is still available for additional protection from oil India. I think this will at least give us some stability and improved uptake.

Right, and your, I think one pipeline from your fields to the Dulyajaan gathering station, that has been done?

30% has already been completed, that has been hooked up for the production. And the balance line is in progress, but that is not going to hamper our 45 million by any means.

Okay, so the evacuation for 45 million up to Dulyajan is ready from your side.

Even if it is tomorrow, it's ready.

Okay, and you mentioned that March end, this hookup is March end or probably Q1 of FY27, this hookup is expected. So, this is subject to, I mean, it's just a technical hookup, or is there some, I mean, from Royal India, we have come to know that there's some PNGRB approval also, which is required to make it a common carrier, something of that sort. But, if that doesn't come, then also this technical hookup can happen, or both the things should happen simultaneously?

The PNGRB will give a clearance once it is fully hooked up.

Okay, once first the hookup will happen, then the PNGRB clearance will come, right? Okay. And for that, NRL will have to take a shutdown also for this hookup to happen.

That's right. That should not be more than about a weekage.

Right. And BAT, right now, what is the guidance? Are you, like, giving a target in terms of increase in production, or are we at this range only and trying to, like, reduce the impact?

It will be in this range only till the workover is completed.

Okay, those two, three wells which you are planning after that, there will be an increase in production. Is that right?

Just workover may improve, but till the time, till all the three wells are drilled, it will be on the similar line.

Okay, got it. And last question, so what's the assessment for Kharsan?

You have 35% stake right now, correct?

Okay, and what is, you mentioned that you've got the environmental approval, I mean, A12s you've already drilled, right? And they've been put into production or they are being tested right now?

You could listen to me that around five wells are already on production, and the other two wells along with the sixth well is completed as a gas well, and it is on the same plinth, you know, two rigs cannot work simultaneously, so the two completed wells are to be perforated, and this will happen along with the third well completion, so which we are expecting by the end of this. Month or 15, by all probability by 15th of March, we will be able to cook it up.

Do you have a plan, production plan for next, say, two years, how do you see the production of Kharsang, both oil as well as gas?

This is actually a field which is having, see, 28 wells are already on production which are all depleted, which are all on the old legacy wells. These nine wells are the new wells. And we are expecting the new wells can produce better and the old wells needs to work over.

Right.

The production plan per se is about targeting about 1000 plus barrels.

Okay.

With the existing wells.

Right. And is there any pricing upside to it in terms of new wells gas or how the pricing be for this incremental gas which is coming?

Yeah, I think we have the government of India as the policy but it's not subject to the demand, right?

Okay, only if it is like sent to sectors like CDD and all, you will get that premium pricing. Is that right? Otherwise, it is like classified as a standard gas, so maybe like it's like at that EPM rates only. Is that right right now?

It has to be now. The grid connectivity comes, it is no longer standard. So then you will be looking for all the price, the premium thereon.

Okay, okay. And just one last question.

Sorry to interrupt. I would request you to rejoin the queue.

Yeah, yeah. Thanks, and all the best.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer all the questions from the participants in the question queue, we request you to kindly limit your questions to two poor participants. If you have a follow-up question, please rejoin the queue again. We will take the next question from the line of Mehul Panjwani from 40 cents. Please go ahead.

Hello, sir. Thank you so much for the opportunity. Sir, what is the update on the PY3 arbitration?

So, it is, the tribunal has been constituted. Now, the tribunal will be deciding on this seat and venue, and after that, they will get on to the substance of the matter.

Sir, what is the timeline for this? Any idea?

Arbitration, what timeline I can give you? It is up to the tribunal can give you the timeline.

Right. Okay. Okay, sir. How many days was VAT operational in this quarter, sir?

This quarter, almost 90 days we have been operating, except one or two days. It is about 89 days, right?

Okay, okay. And sir, this HPCL issue, what they have mentioned that it is, they have found contamination, that was, that was expected to be resolved, get resolved in the last quarter itself. So, why is it such a overhang, I mean, if it's such a trivial issue?

We have been requesting, and we continue to request, and we hope some resolutions will come. Because our substantial money get blocked. So, we wanted to have an early resolution and we have been doing all the best possible efforts and trying to talk to our people, talk to HPCL. That's the status now.

Sir, how much funds are pending on this one? 259 crores plus interest.

Okay. Okay, sir. Thank you so much. I'll come back to you.

Thank you. We have the next question from the line of Amit Mehendali from RoboCapital. Please go ahead.

Hi, thanks for the opportunity. So, my first question is on the production, net production. So, if you were to move to, say, from our current levels of 2500-3000x to, say, 6000 level, what is the bi-field net production that we are estimating? Can you please get numbers like Kharsan, DAT, that is split of 6,000?

No, I think we are waiting for that. I have already told Kharsan we will be ramped up up to 1,000 barrels, and Dirac should go about to three times of the current production. These are the two immediate things, and smaller volume can come out from the cam bay, and we cannot give the exact numbers as such, we will be wrong.

Right, sir, if I look at the math, because that way DROC will add only 600 incremental, I mean, DROC will become essentially, you know, yeah, about 600 barrels, and Carlson, sir, you won't.

Your math is wrong, you can recheck the numbers. Your math is wrong, you can recheck.

We're doing 237, right, or 250 for DROC, so we'll go to 750.

Okay, now, Dirag, how much is it? You see, you have to convert into the gas into oil, right?

B-O-E-P-D, okay.

To do that, it will be a much better number.

Okay, understood. And the second question is on the transition part. So, what is the path there, and do you wish to hold your personal liquidity in the company going forward?

So that's the personal equity remains to be the company like any other investment. Okay, now I think the NR committee and board is looking for the new CEO, which you will get an announcement shortly on that.

Right. So, how long do you plan to stay with the company? I mean, color on the transition that will be helpful.

Change is the law of life, yeah. Sorry? Right. Change is the law of life, right? Constant is the change. My last question is, I have a teacher at home.

Sir, last question on the EBITDA margins, maybe for 27-28. Broadly, what type of, in percentage now, what type of margins do we expect?

It should be somewhere around 60%.

Okay, sir. Great. Thanks a lot.

Thank you. We will take the next question from the line of Radej Gandhi from Discover Capital. Please go ahead.

Hi, sir. Just want to understand, you know, when we had initially spoken about doing incremental actually wells after the pipeline was actually up and running, Just wanted to understand the reason why we are already starting to do it, despite, you know, we were earlier expecting this pipeline to be completed in... The middle of last year, then the end of this year, then early this year, and we have talked about, I mean, March and April, actually now, given we've got a limited resource, I just wanted to understand the logic of actually starting it, given that delays appear to be actually indefinitely.

It's not the work carried out by us. It is carried out by the government companies, and they are the one running the...

No, no, I think the incremental wells which we are exploring, I thought the logic was we will start the additional exploration only after the pipeline is complete, given the completion of the pipeline isn't in our hands.

As you say that, we are constantly drilling one well per month, on an average, and that progress will continue on it. Karseng drilling is going on it, and we are looking for the rig to drill the North Dirog. North Dirog, I mean, Dirog extension is pending with the Government of India, which we get at the earliest. Once the extension comes, then we have to start the drilling of the North Dirog. And that is about, and Canberra, we have drilled two wells in North Ballon, and we are waiting for the extension of the college, and as well as the ring pens, the RFC from the Government of India. Once the extension comes, then we can ask our partners to put the money, and we can start doing.

Okay. Sir, and, you know, if you could sort of explain this HPCL issue slightly in detail, because it's slightly strange that they were able to take the oil without actually really testing it. And then, you know, given that they've actually made a large release, the refinery was closed down, and on the conference call also sort of indicated it was all linked to our oil. Just, you know, if you could give a little bit of granularity on what the issue is, how the resolution is expected, and the exact status right now, because obviously it's going to impact our future capex, and is there any risk of this happening with other oil which is produced in the BAT?

So, one thing is that there is no risk associated with the production of any oil from any of our fields. That is the first thing. Second thing, normally we sell the oil on FOB basis. You fully aware FOB basis means the risk and the risk, insurable interest and the title transfer to the buyer. It is not with the seller. The buyer takes the delivery of the crew and putting into the tanker. And then blending it with the other crudes and then using it to the refinery and that's what is happening in this case. So we are requesting these issues all happening after the transfer of the title. So as far as we are concerned, the sale is fully completed and the amount is due to us. They are saying your oil is having some contamination, but We do not know, we are not responsible for those contamination, if any, or anything, anywhere it happened. So, we are open and transparent, and we have told them, these are the oil we are going to sell, and that, accordingly, we transfer to their tanker, which has gone and taken by them, and blended by them, and refined by them. Now, we are requesting them kindly release our payment. Our request will continue to be with HPCR. That's all from our side.

And have you taken any legal action against them?

Actually, that is, so whatever the legally they are asking, we are replying on legal manner, that's all. And we are wanted to have amicable resolution of this, and if that happens, it is well and good. If nothing happens, then that is the last resort, right?

And typically, how long do these things legally take? Suppose it goes down the legal route, how long do these things...

In the COSA, any arbitration on this should be dealt within a period of four months.

Got it. But we have not started the arbitration.

No, no. We have no intention of doing anything on this thing. We want an amicable settlement. They are, after all, our big brother. We have to deal with them in the subsequent period also. We don't be in a litigation mode in life. Got it, sir.

And so, we are hopeful it's that close to being resolved.

I think we hope and we pray for that.

Okay, and on the Karsang side, if you could expand on the potential we have from Karsang, and how we are looking at the opportunity there.

So, Karsang, as you see, there is a well control issue on the well drilled, and that means the potential of the gas is substantial enough to connect to the grid line. So, Oil India is interested to drill additional number of, more number of wells. So, we will be in a continuous mode of drilling there, and the deeper prospects also. And this will unlock substantial value on the block. That's what we believe in. And every well would be adding at least about 100 barrels per day additional production. And if the gas are get, we are expecting even by incorporating the... So, if you have a stallower part of the existing wells and some other one or two new wells, we can go up to a minimum of 10 million cubic feet per day.

Thank you. That's all.

Thank you. We will take the next question from the line of Rajiv Agarwal from Stirling Capital. Please go ahead.

Sir, thank you for the opportunity. Some data questions. What is the conversion factor you use to convert gas into equivalent barrels of oil? That is my first question. Six thousand.

First question, can I answer? Then before I ask the second question. Yeah. 6,000 standard cubic feet is roughly equivalent to one barrel of oil. Okay, okay. Okay.

Now second question. Second question, sir, if I see the consolidated P&L, sir, this revenue has declined from the last year, from 156 to 81, so I just want to understand what is happening there.

This is mainly due to the reduction on the Dirac optic as well as the BIT. Both were not performing as expected. Okay. Okay. Thank you. Thank you.

Thank you. We will take the next question from the line of Nirbhai Mahavar from N2 Capital. Please go ahead.

What is the net debt or cash in the book?

55 crore as on date.

55 crore debt or cash?

55 crore debt. And the cash is about? 30 crore cash is there.

Would it be fair to assume, based on current expectation, that Dirog production next financial year would be at least double of this year? We expect double of this year. For next financial year, FY27. So, we would be expecting around 40,000 mmB tube daily production from there?

Yeah, that's right. Okay, thanks.

Thank you. We will take the next question from the line of Anubhav Goel from Cosmo Ventures. Please go ahead.

Sir, if I heard you right, if the HPCL issue is not resolved in the next three to six months and we don't get the money, then we would mostly delay the drilling for PY1 and BE80 post-monsoon?

I think, see, once the money is get blocked, then you have to look at other options of raising funds, right?

Right, sir. So, sir, the October timeline you mentioned for PY1, that is independent of the HPCL issue?

That is independent of the HPCL issue. We are trying all possible. See, once an issue is there for a substance of blockage of the revenue, and every day you look at actually you may realize it. Now, we come to a state when you can't realize it will take more time, then that point in time you have to look for alternative source of funding, right?

So then, this would mean you would take on more debt, or are we more open to equity as well?

It's up to the board to have a look at it, and both options are open at the moment. Got it.

And so, you mentioned the new CEO, do we expect him or her to come within the next three to six months?

I think much earlier than that, I hope.

All right, thank you.

Thank you. We will take the next question from the line of Prashant Bhaiya, an individual investor. Please go ahead.

Yes, sir. First question. Wanted to understand, you know, on the HPCL issue only, you know, In the current scheme of things, how much does it delay our plans? And secondly, do we also have, what is the amount of fuel do we have on the floating storage vessel? I mean, is there an option to sell more? That's one.

See, I don't think we have got an immediate option to sell anything on store. That's ruled out. In my opinion, I may be wrong. It should be much earlier, but it will delay the whole process by about four to six months.

Yeah. Okay. So second question is on B15. I mean, we had spoken about a year back that, you know, once discovery was there, that it would take about two years, you know, for us to start realizing. Now, given that we have 100% participating interest in this, and it's a shallow field, etc. And there are already some wells there. I mean, are we more aggressive? What is the, what is our, because this could be a significant, you know, revenue changer for the company in the long run. So, where are we with the development plans and environmental experiences, et cetera?

I think we have already waiting for the mining lease. Once that is expected shortly, once the mining lease comes and we will, our people are already working on the development plan, that will be given to the government of India for approval. After that, we will start placing orders for the materials and things required in a slow and steady manner. So, in a manner that we will be able to put the field on production within about two years from the submission of the development plan.

So, overall, are you happy with the, you know, as management, are you happy with the last couple of quarters production and the way things are going? Really, the stock is almost 50% down from a year. So, what is your, like, management view in terms of, you know, development, all the fields and the progress that was committed versus what is actually happening on the ground?

I'm not happy about it. That's for sure. Say, one is even because you are able to produce, you are not able to sell. And second thing, you are continuing with the capital commitments. And the BIT is not performing as expected. These are the more of an issue, the surface issues, which has to be resolved. Till the resolution comes, some of the things are not within our hands to do it. So, till all these things are getting resolved, we are not able to achieve what we are expecting. There are gaps, and these are the gaps are getting filled up now. So, we will be able to do much better once the grid connectivity comes into play.

Thank you for the transfer and all the best.

Thank you. We will take the next question from the line of Manan Patel, an individual investor. Please go ahead.

Am I audible? Yes, Mandan. Hello. Yes. Hello. Good morning, sir. Sir, first question is regarding the, just wanted to understand the accounting, because if I see the difference between standalone and console, the revenue is just 4 crores. While I understand Kharsan and the subsidiaries like Hindej and all those comes. Is consolidated apart from standalone. So I would have assumed that revenue in standalone would be much higher than just 4 crores. So can you throw some light on that?

I think, Vandan, clearly I have seen what is happening is they are asking us to edit off some of those. That might be the one of the issues for it. And you can send me that questions. I can, because after the call, I am not able to answer to you clearly. I will, you can give me a call and I will go through the numbers and explain to you. Okay. Okay, sir.

And, sir, second question on Kharsan. So, you mentioned thousand plus barrels. So, is that only oil or that is including gas? Because you said gas. Okay. Okay. So, once gas connectivity is there, you can produce a lot better in Kharsan as well, right? That's right. Okay. Thanks a lot, sir. I'll get in touch with you. Thanks.

Thank you. We have the next follow-up question from the line of Mehul Panjiani from 40 Cents. Please go ahead.

Hello, sir. Thank you so much for all the responses. Sir, one update which I missed out is maybe I was not there in the commentary. So, can you please brief on the new CEO and changes in the management?

I think NRC, what you call the Nomination Revolution Committee, and the board is discussing with the people, and they will come out with the new CEO, and we will announce it, actually.

Sir, are you taking a different position at the executive level, or are you...

I won't be in any executive position.

Sir, you are, you are leaving your position, is it?

Yeah, I will not be in this position.

But, sir, there has not been any update to the stock exchanges. Has this been announced only in the call today or?

No, no, it has been already announced in the exchange a long time, but, Jan 22nd.

Okay, so, sir, how long will you be able to continue?

If the new CEO comes, this is very clear in the message actually to the stock exchange.

Okay, sorry, sir, I missed out. And, sir, about the BAT, as you said that, you know, it is not performing optimally. So, how would we rate the performance of the BAT currently?

See that what we are struggling with that we need to have a workover of the well and that is getting delayed. Once the workover is done, the D1 will... Good morning, everyone. D1 well will do much better and the D2 well as usual need the zone transition and both the things, we could do it and it will be doing much better than what we expect. What is the current lead?

So what do you, can you let that on zone transition? Sorry to interrupt Mehul, I would request you to rejoin the queue again.

No, just a follow-up question on the zone.

Thank you. Okay, next question.

We have the next follow-up question from the line of Anubhav Goel from Cosmo Ventures. Please go ahead.

So the approval now for the next nine wells for Kharseng, we mentioned we have to take partners' approval. Any color you can provide on this?

So, we have, we are ready to drill the wells, but we are only 35 percent. The balanced 65 percent approval is expected. As we speak, we have already circulated operating committee approval for the nine wells, or immediately almost six wells, and then followed by another three wells a little later. But the budget is proposed for the nine wells, and one deeper well.

So, this is something we have recently submitted to the partner?

Jay has been in discussion and we have to finalize the location. After finalizing the location, we have submitted to the partners.

All right, sir. Got it. Thank you.

Thank you. We have the next question from the line of Radej Gandhi from Discover Captain. Please go ahead.

Hi, sir. You know, you indicated that you needed an extension on SM. Just wanted to understand, is this just procedural or is there any risk attached to it or how should we be looking on that?

There is no risk attached. It has been already approved by DGH. It is in the regular procedural issue at the ministry, nothing else.

Got it. Okay. And this will happen after the pipeline or it's independent of when the pipeline happens?

This has nothing to do with the pipeline or anything. It is just a procedural thing and which we have been pursuing with the ministry. It may be expected any moment. Okay, sir. Thank you.

That's awesome.

Thank you. We have the next follow-up question from the line of Mehul Panjwani from 40cents. Please, go ahead.

Thank you so much for the follow-up presentation. Sir, you are saying something about the zone transition. If you can elaborate, it will be helpful for D2.

What has happened was in D2 well, we have separated the gas zones. Now, there are other three zones on the top. Once the gas zone started depleting on that, then we have to perforate on the top zones, which will also produce oil and gas. Right. So, this will be normally being done during the workover.

And, sir, we expect to finish all the workover by October 2026, is it?

I think if you are not able to do anything on this season, then the next season starts end of October. From October to April, we can do that work.

Right, sir. And, sir, I heard you about the DRock offtake, that it can be triple of what we are doing right now. So, what would be the timelines we can expect on that one?

Yes, we are ready with the 6-well production, and the 6-well can be 5-wells, and the 6-well can be hooked up for production. Once the line, once there is a demand access, right? Now, the demand will increase only when the grid connectivity is over, so which will be on a day's job, right? So, the demand is there, it is a day's job.

Okay, so as soon as the demand is there, we are kind of ready for the optic. Right, sir. Okay, thank you so much, sir. Thanks a lot.

Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Jeevanandam for closing comments.

Thank you all for joining this call. Our onshore drilling program is progressing well, and we intend to maintain this momentum as we work to unlock the full value of our onshore assets. We will commence our offshore drilling campaign once the temporary operational issues are resolved. Given the substantial underlying resource potential, these short-term challenges do not diminish our long-term value creation outlook. Thank you.

Thank you, members of the management. On behalf of Hindustan Oil Exploration Company Limited, that concludes this conference. Thank you all for joining us today, and you may not disconnect your lines.