Antelopus Selan Energy Limited (ANTELOPUS) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Entenuropel Stellan Energy Limited. Too few FY27 on this conference call hosted by Equal Area Securities Private Limited. As a reminder, all participant clients will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Khushbu Balani from Imperial Securities Private Limited. Thank you, and over to you, ma'am.

Thank you, Sagar. Good evening, everyone, and thanks for joining in. Also, thanks to Antelope's management for giving the opportunity to Icarus for hosting the call. We have with us from Antelope Salon, Mr. Suniti Bhattar, MD and CEO, Mr. Shivakumar, Director, COO, and Mr. Radhi Tirupati, the CFO of the company. I would request Suniti, sir, to give his opening remarks on the quarterly performance and outlook for the industry. Thank you, and over to you, sir.

Thank you. We will see us growing, which we call in short term, and then we will focus a little bit on this quarter's numbers and results that Raji can go through the stock exchange website. We start with pretty good news. We had already started out there that we have finally signed the RFCs or Renew Sharing Contracts with the Government of India. Two large ones, one on east of India in onshore KG, one on the west coast, which is our backyard, which is the Cambay Basin. These were substantially large contract areas compared to the contract areas that used to get offered in the previous breakdown. So finally, those are officially, we got those contracts with us. So that has really invigorated the team. Take a step back and look at what has happened in the growth of Antelope's work. We want to look at it with a length of production growth, with a length of putting capital into the business, with a length of maintaining EBITDA, in spite of us having seen a down cycle as well as an up cycle into commodities. And how we see our company that's at least 5,000 barrels of souring production, 11 barrels, then through consistent understanding our resource and reserve base and trying to exploit it. And we landed up to 740 in the year 24. 740 became around 1200 in the year 25. Last year, we were at around 1355. We are hoping that this year we'll exit at around 2500. We are reasonably sure that we should be able to deliver on our promise to you of ramping up to 2,500 barrels of oil, gas, fuel, and production form. It has been pretty simple that your resource is what is underground. So we try and focus with what I call a world-class technical team on understanding the resource and unlocking it. And while we are doing it, we generate surplus cash, and we have been consistently flowing back the surplus cash into the business, growing it further. And while we did it, we are also creating a portfolio of opportunities for all our stakeholders within the Entlopers portfolio of assets that will help us grow multi-fold over the next 5-10 years. While we did so, we have remained a debt-free company, which is growth-focused. Year-on-year is showing and learns from things that work, and learns from things that don't work as well, and is useful enough to keep on as the business or will change in our industry. If I look at, I just talked about 24, we exited there at around 982 barrels. The next year, we exited around 200 barrels. That went up to 1758 barrels. We are hoping that will go to 2,500 barrels this year. Next year, that should be around 0,500 barrels. The year after, that should be 5,000 barrels. What it is going to be beyond 29? We have some idea. We will share those numbers with you once we understand our KG onshore a lot better. So we should be able to do a lot better news as we go forward. And while we did it, you see we started out by spending around 51 crores of capital in year 23, then we went to 160, again we went to 87, then 220, hopefully 250 crores this year. The idea is we are also understanding and learning fiscal discipline as a group, and as we go through it, we are learning that, okay, we are able to spend money, get it back within a year, year and a half, deploy it back while it generates a lot more cash than deployed, and hopefully give you a return on liquidity, which is much, much better than the peer group that we have. Also, we can actually go on a growth path and just keep on eroding our margins. That also doesn't help. You can see our EBITDA margins historically have stayed around 50% mark even in the low oil prices. Currently, they are much better. I think last year's EBITDA margin was around 58%. We are expecting this to be substantially better this year, largely due to commodity prices being good. So, while this is happening from a strategic perspective, what we are also doing is, we are trying to define, rather than focusing on everything that is in our city, that will dilute the outcome, we start focusing on one or two frontier areas every year or every couple of years. Last few years have been a huge focus on the cannization and the Bakrul Kandishan assets which are the backbone of that basin for us as of now. Then we started understanding the Asha Marakan basin with our Dwarmara drilling that gave us some interesting results, interesting what we call gas, turns out to be probably oil, and we got a little bit of KG production going. As we will get into the remaining part of this year or next two years, we think that given the portfolio that we have developed in KG Basin, a lot of our strategic focus for sinking caps will get on to the KG on-show. Because we pretty much think that the Campey Basin core access to Bakharul and all are on what I call a factory mode. We understand them reasonably well. We are a lot more comfortable having a multi-year drilling program in our Bakharul-Tarjithan field growing. So, we think those fields will keep on providing a solid ground for us to stand on and keep on journeying a healthy profit and cash flow towards our further growth over the next few years. And we'll also basically provide the seed money that we'll need to leapfrog into unlocking substantially larger reserve bases at KC. and everything goes well. And then the fracking is finished. Fracking is primarily due to supply chain conflict with what is happening with the world. But that's all sorted. We have started to see actual full impact of the fracking and the tendons in Bucrol. Bucrol itself is set around the October average production was around 950 barrels of oil in 12 plus. So that data is pretty good. But more importantly, it is telling us that buckroll is one of the fields where if you keep on drilling wells, it will keep on giving your production increase. Maybe one to two wells every year will go towards offsetting the decline. Rex is going to end. So that is going to be a backbone at least for the next three, four years in terms of generating. Karjishan is already drilled two wells, which looked very interesting on the walk. Hopefully we will pursue it over the next week. One of the first wells will start seeing some of the results. But by the looks of it, Karjishan again is opening up areas towards this. We will keep on pushing these frontiers. So hopefully Karjishan, we will be able to finish all the seven wells that we had planned to drill in Karjishan in this fiscal district. As we enter next year, hopefully, which way they lean in terms of oil or gas. We will take a view on what to do next year for these ones. It's a large field. That's why we like it from an option perspective, 160 square kilometers. The successful wealth or more successful wealth could mean that it will become not equal to, but definitely, subsequently, equal to Bagdol in terms of its potential as we will go. We should have that with us towards the end of this fiscal year, the potential of Cambage Relief 10. And then we can take a call on whether or not to keep our career at the same or increase our career or whatever we want. The exciting thing for us is that in the big rounds that we got, we basically tried to increase our position in both KV Onshore and Canvey. In Canvey, we managed to get Pasunia 1 and Pasunia 2. We also got Ogunaj back, which we had relinquished because it was a package. We got it back. We'll figure out what to do with it. It was our relinquished field, but we also got a field called Uba, which is close to our Cambay field, a small little gas field, we think, that has shown a good potential, and it's something like Kharjishan in terms of sand quality, but we need to see how much oil and gas is there, but we are excited about the Cambay piece, because we have existing operations, so it should not take us long to start production from these Cambay discoveries. We have around 9, only one of them is producing, which is Mukamala. But some of these fields in KG are substantially large fields such as Bantumalli is there, what are the rules there? I understand we must be definitely within the top 3 interest holders in onshore KG as of today. And we think that over the next year or so we will formulate an overall exploitation plan of KT. Then we've got some exploitation plan which will look at existing wells and getting some opportunistic early production out of KT difficulty. But the long-term plan would be just like we did in Buckroll. We will go with the rig, drill a couple of wells across the portfolio here, and then we risk it. Just to put it in context, potentially KG onshore has more resource base than the offshore portfolio that we have today. Last quarter has been slattish. If anything, the production is a little lesser than last quarter. Karjishan has declined and Bakrol took a little bit longer to complete and track. So Bakrol has increased, Karjishan has dropped, but that is the temporary blip The point is that you see this water, because when it is back in Karchi-San and with 7 wells that will come in there, we should start seeing large uptick in production. Actually, the October production itself, we are at around 2000 is what this month's production across the portfolio has been. So, we have 7 more wells to add to the kitty and if we get some good results by in the campaign ruling this year. So, we are pretty confident on the two-and-a-half supplement. What are we still looking at? We are basically looking at an integrated view. We are looking at old and new wells together. What I can add to this is that twice so far we have gone into the well. We have recircled back the well, the TS1 flow, and every time we have gotten oil out of it, out of the well. So, we are now trying to figure out what should be our next We are getting some quick steps for looking at potential oil development, fracking, not fracking, if not straight to get fracking organized in Atfrans. So we are putting the full plan together. We will then discuss with our joint venture partner and hopefully figure out what is the next for Dormara because as far as gas development in Dormara is concerned, I think the transportation issues and all will take its full time. We are going to focus if we can monetize oil quickly I will now hand over to Rajiv to tell us a little bit more around the numbers of this quarter compared to previous quarter, and then after that, we can open for questions. Thank you.

Let me now take me through the numbers, starting with the P&L. The oil price averaged $88.2 per barrel in Q2 against $95.3 per barrel in Q1. So, sharply within this quarter, about $76 is what we realized in July, $84 is what we realized in August, and around $100 plus is what we realized in September. Gas realizations which moved in line with the oil prices also fell from $10.33, which It was our average realization, $10.33 per MMBTU, which was our average realization in Q1, to $8.84 per MMBTU, which was our average realization. The rupee was broadly stable at about 95 volumes. On the other hand, as Sumati mentioned, the remainder of the revenue from operations stood at around 120, 1.7 crores. Seeing other income was 127.2. EBITDA was 90 crores, almost three times to what we reported in Q2 last year, with a margin at about 71%. In the interest of clarity, I would want to add that in this quarter hour, other income includes one of 6.5 crores refund, which we had intimated you guys in the last quarter presentation as well. Now, that amount we have realized in cash. So, even if we exclude that, the EBITDA was about 83 crores. So, that takes the margin to about 69%. Cost stayed tight. Angin cost came down to demand stipulate around 16% of the revenue, which totals around 20.5 crores. So, now, margins when the oil price falls. Depreciation rose to 13.2 crores as the new buckroll wealth came into production. So to sum it up, the net profit for the quarters stood at 57.3 crores, nearly 5 times 11.8 crores, 180 crores. And net profit at around 100 crores. Moving on the balance sheet, as of 30th September, shareholder equity currently stands at around 780 crores. We have no borrowings, we hold roughly So, the balance sheet remains debt-free. So, we continue to demonstrate strong cash generation, which aids us to fund our drilling program through our own cash flows. So, to sum it up, the three key takeaways are first three oil prices, one through the quarter, but our volumes and margins head. Second, our growth engine continues to run. The buckroll The third one is what Suniti updated on DSF-4. It gives us a second growth hub in KG and to the chamber barrels, which add to our cash flows. So therefore, we remain confident and on track for a 2,500 barrels of oil equivalent exit this year. And we are building towards FY29.

Thank you very much. We will now begin with a question and answer session. Anyone who wishes to ask a question may press star and then 1 on their original phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press star in 1. Your first question comes from the line of Raman J.B. with Sequent Investments. Please go ahead.

Hello, sir.

Can you hear me?

Yes, we can hear you, Raman.

So, I have a few questions. First of all, congratulations on a very good set of numbers and very strong quarters. One, starting off, on the margin aspect, on quarter-on-quarter basis, despite a decline in the average cruise prices on quarterly basis, our margins have improved drastically. Exactly. So, when I see it on a y-o-y basis also, our operating expense didn't increase despite our production and revenue increasing by 50%. So, going forward, our operating expense is expected to remain same. And can you guide whether we will be operating at the same margins for the coming quarters?

I think there are two parts here. I'll try to attempt it, and whatever I try to attempt, I'll ask Rajiv to answer it. I think, look, one thing we have been saying consistently to all of you guys is that a lot of our costs are fixed costs, and we have good handle on that. Right, we have said that we have, we have, the way we have structured ourselves, it is a company that is poised for growth. So, therefore, whenever production increases, we have said this time and again, the incremental barrel cost is lesser than our base barrel cost because our fixed costs start getting distributed to a larger volume. So, you will start seeing the impact that you are seeing. How long will it continue? We haven't been so long, right, in terms of our cost efficiency and fiscal display. As far as the margins, cost is one part of the margin. The second The oil price for us is always going to be the oil price. Oil price, so we have no control. The more it is with mostly net of royalty and shares, it basically flows into our bottom line. But cost, what we have said is, all incremental barrels, at least in campaign AG, will start getting a good steel product. In the campaign basis, every incremental barrel is going to cost lesser than the free-less barrel, because fixed costs start getting distributed. Rajiv, what I have something to say, so I think you pretty much covered it.

So, can we expect this margin to be continued, like more than 65% for the whole year?

So, our endeavor is to maintain those numbers.

Okay. Understood, sir. And, sir, my second question is, with respect to Rajasthan, we are planning to drill 7 wells by April 2027. And you also mentioned that 2 wells will be drilled by Q4. So, how much incremental revenue are we expected from this basis?

I think, look, there are two aspects. At this time, we have already been drilled. Two years of drill. But they have not come into production yet. So, we hope that it will start-done production. Quantitude impact. I was talking about one as big as a big drill. It's a 50% joint venture participant. So, we need synergy also to be aligned with them. But that's the growth.

So, if my understanding is right, For example, during this quarter, as of October, the buckroll production is around 750 barrels per day, so you are saying that this buckroll 2X will be delivering more than, will be delivering 2X of the buckroll capacity, which rounds up to around 1,500 barrels per day.

The throne is already flowing. I think the throne is doing around 950 odd barrels, right? Kaji-san, speaking of Kaji-san adding, we are going towards 2500. It is the can-way field near Thumbath, whereby we are 50% partners in it. There we are drilling, hoping to drill one to two, what I call optionality level, as a part of our common agreement with our partner. And if they do work, then in future, not this year, in future, may be next year or may be the year after, the consistency itself potentially has coming as large as buckroll, if not bigger. The details on how we get to that large will depend upon. So that is going to help us totally deliver beyond the 5,000 if it works as we go.

Yeah, understood, sir. Yeah, understood, sir. Just a follow-up on another oil field, the KG Online, which you mentioned is one of the promising portfolio. Thank you. So, you have added two or seven new things with respect to the KG online portfolio. How are you planning? You also mentioned that the incremental CapEx required, like the recovery with respect to KG online is very quicker and faster. So, how will you ramp up the KG online basis going forward?

So, I think KG online is a little bit different than what we have tried. Now, KG online, what I said is we got seven new fees. We are excited because it's a large fee. The resource base in these fees is larger than the offshore portfolio we have. So, we are getting access to a resource base in an onshore setting that we trustfully would have to go offshore for. Right? So, that's the positive piece. KT is a high temperature, high temperature basis. So the res and KT are going to cost substantially more than on the average. If I spend a million and a half dollars, I will end up spending very estimating. We haven't done the full costing, but a million dollars a cost. Roughly speaking, right? What we are now going to do is we are going to understand this resource base fully, then come up with a strategy of deploying one rig across at least the first phase of it. I mean, you guys have seen us how we do. We do not go and stand up. We will say, get a read, drill a couple of wells, try to do our understanding before we then start opening up the purses and go for an aggressive drilling campaign. In case of how campaign has worked for us in the campaign basis, KG is going to start replacing it at March, March. Thank you for the KG announcement from us as we go through because the first thing that we will at some point is what the resource has been based on.

And all of this drilling, including all the three patients mentioned earlier, will be funded via internal accruals, right?

True, all is the same. I think it will depend upon our appetite of ramp-up. I mean, you can fund any sort of a growth internal accruals that takes long. Now, we will have to then decide that given you guys with answers around that, from either Yeah,

but at least the production plan that you have

has a very subdued or a Canberra option in it. Okay. Okay. Understood. Understood.

Thank you.

I'll just join back in the team.

Thank you. The next question comes from the line of Shukam Jain with N.V.

Alpha Fund.

Hello. I hope I'm audible.

Yes. If you could tell your name again because we couldn't hear your name.

My name is Shukam Jain from N.V. Alpha Fund. Congratulations, sir, firstly on your maiden call and on a fantastic set of numbers.

Sorry to interrupt, Shubham sir, we have lost your audio once again in between.

Can you hear me now?

Yes, sir, this is much better.

Yeah, so, sorry, I want to understand two pieces. One was on the cost part. You know, when we had last interacted, what we explained was broadly of 1,500 per barrel of oil equivalent of cost structure,

I think we lost substantially your person, but the part we could hear was that you were saying how would we maintain our cost structure. The last time we talked about, we were at 1,500 barrels. We wanted to get to a 1,500 barrel of sort of production now that we are targeting much higher numbers. How will it impact the cost? Was that the question in the context of campaign? Correct.

So, we are trending lesser than our 1,300 per barrel oil equivalent number that we had initially guided for. So, how will this trend? Because it seems to be giving us quite a bit of operating leverage.

Correct. Correct. Correct. Correct. Correct. Correct. Correct. Correct. Correct. Correct. Correct.

We know that we need the right skill set and the right kind of people to posit for growth, and 1,500 or even 2,000 or 5,000, at least in my head, it's just an infinite number. We are hoping to be a much larger player in the energy landscape of this country. And we think we have the team already plugged in that will take us there.

Understood. So just to follow up to this, so I understand on the royalty bit, this mix will change and the 16-17% will start inching up as we do sort of buckroll and KG onshore. But just on the fixed cost and the handling and other operating expenses, is it fair to assume that this will grow much lower than what our volumes are going to increase?

So the fixed cost now will eventually get an option with a larger margin start.

So hopefully we will get KG into the same product, the cost structure of our Cambay operation. And once that is done.

Understood. My second question was on both Capex and how we have seen growth. In the sort of FY28-29 that we have built out in terms of the mix, there is a significant portion that is coming from KG on-land and offshore. So, Drift wanted to understand both the timelines of Capex that we are planning and the quantum of Capex that we are planning to reach these numbers on the on-land and the offshore bit specifically.

I think, look, if you look at the, so this is also, there is really no offshore capital expenditure or corruption involved in this 5,000 guidance we are doing in July. We are saying we still treating offshore as an optionality that we will execute, but the other, the thing that we will do in fiscal year 28, 29 is we will start focusing management and technical teams See, because we think by that time, in terms of understanding the basin and maturity of understanding, KG onshore will also be at the same place that Canvey basin is today. So we, for us, Canvey basin is more like an operating mill now, and therefore we are getting all our sinkers and also going to the KG onshore KG basin. So, other days come a year, year and a half. We should probably be in a place whereby these guys can start trawling through and digging an opportunity set. That's how we look at life across our portfolio today. It is not the production and capital that we are showing you in strategic focus area. Even for the three and a half, how much capital we need, we will come at the right time and give you full capital guidances as we put in the field of your plan for them with the regulators.

Understood. That was helpful because I assumed that the strategic focus was on in terms of production, but it seems to be in terms of CAPEX.

It is more of a strategic management focus on opening up the optionality for us.

Got it. Just a follow-up on this. Across Cambay and KG, is it fair to say that we can get to about 7,000 plus of barrel equivalents per day in terms of production?

I am submitting 5,000 to you guys as of today. Let's just understand KG a bit more. We will talk about any changes to this guidance as these calls.

Okay, that's perfect. Thank you so much.

You're welcome. Thank you.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to make these questions from all the participants in the conference, we request you to limit yourself to two questions each and rejoin the queue for any further follow-up questions. The next question comes from the line of Venkatesh Urdamanian with Logitech Tree Consultants Private Limited. Please go ahead.

Thank you very much for hosting this call, and I really like your interactive thing. It came out very refreshing, very clear, lots of clarity. So, I have two questions, as told by the moderator. I want to understand the pricing formula, because how do you actually fix something for the customer? Is it on the spot or is it an advanced contract, say, three months, two months, one month before? And is it pegged to the Brent crude price plus a discount or something like that? That's my first question. And second question is, when you have this kind of a formula in place, when you are doing the next three to five to seven years kind of growth plan, in your sensitivity analysis blueprint, what's the worst case scenario you assume for crude? And possibly a blue sky scenario over a 5 year period in your experience. Say, a range of $50 to $120, or what could that range be that we can work out on profitability?

Thank you, Inputesh. First question, I'll let Rajiv answer. And then the second question, I'll give you my case. Rajiv, what did you take the first question? How is it?

On the pricing formula.

10% discount.

Okay. Right. Right. Right.

Is it an average?

Basically figure out the product and third parties last and then based on the yield of our product compared to a benchmark route, we can rent from a modeling perspective. And then we figure out that product list discount gets calculated. So it's not so much of a negotiated term. The only negotiation in it is which is the closest crew that matches my crew, that we decide whether it is crew A, crew B, crew C, but eventually it becomes much simpler. I don't get into the complexity of it to tell you guys because that on average should be a pretty process that determines the price of a crew. The key tagline is that our pricing is tied to international benchmark. So, it's not controlled by government or anyone else. Nobody mandates the price. It's the market that does it for us. I think you could say President Trump mandates the prices for pretty much everybody in the world today. But apart from that, you think it's the market that drives it. Then for the second piece. It's a very tricky question of how we look at this one, but I have always said, and between me, Radeeshwar, we maintain, that we take a look at investments in terms of, that, look, the only thing we cannot predict and have any control on is the commodity price in our business. So, $65, $70, if a project gives me double-digit return and gets me back my cash within year to year and a half, that's a goal project for me. If anything more happens, I'm happy, but I also want to make sure that at $50 of oil price, I get my cash back. If at $50 of oil price, I'm losing money, I will speak twice about executing that capital project. So those are some basic rules that we apply, the fiscal capital allocation that we apply that seem to have helped us, and this is not an aspiration, this is something that over the last 30 or years that I have been in this industry I have learned, that look, what you can't control, as long as you get back your money within the time frame, shorter time frame, then you have some sort of certainty on prices. That's why the one and a half, one to one and a half years becomes important for us.

Yeah, that's very helpful. I think that's very helpful. That dollar will see the dollar 60 as the bottom range to breaking when I'll produce cash flows. Thank you so much, sir.

Thank you. Ladies and gentlemen, we request all the participants to limit to one question each for participants and rejoin the queue for further follow-up questions. Your next question comes from the line of Pawan Kumar with Ratna Triad Capital. Please go ahead.

Hi, I just wanted to understand what is the potential in terms of the Assam fee that we have. I understand there is a partner also, so if you could also give us an idea of Apex for REL, as you stated in the Camday and KG version that you expected, what can that be there, and what is the potential you see there, and by what time can we scale up? What is the word on expecting, your expectation on that?

Okay, this is around our Dormara field. I think what I said, we have already talked about the central well. Having said that, that is the well that was looking and targeting three typical, three different reservoir zones at different depths in this basin. We were looking at TPUM 1, TPUM 2 and TPUM 3 reservoir zones. Actually, we were looking at Thipam 2 and Thipam 3 as gas-bearing zones. We saw some indications of gas, definitely in Thipam 2, some in Thipam 3, but what we found out is we saw oil which we had not factor in our plants in Thipam 1. So, currently, our team is putting its heads together, looking at not only the wealth that is ruled, which is Gormara 4-0, but we are also looking at some of the old wealth that already had ruled, which might be accessible. We are wanting to see how to express them safely, which is Gormara 1 and Gormara 2, and look at a collective plan of entering 1, 2, and 4, if we can, to try and understand the potential of the TIPOM 1-0. The reason we are focusing on C-form 1 zone rather than C-form 2 and C-form 3 is because C-form 1 zone is an oil zone, it does not involve the same dependence on gas evacuation infrastructure out of Assam that the gas has. Oil, I can trust, like we have seen in us doing KJ in the whole gamification. That is where we are.

What is the potential of an oil production from these wells?

Early days, all we know is that we have managed to circulate out oil twice through the wellbow. We've seen oil come out. In both the times, we are now going back and looking at whether we want to flow it, whether we want to frack it, to understand that potential. I really tell you, not just based on one well, we will look at all the sea wells together. But the capital will be for well, will be of the order of around 60 to 70 crores. Even if I shorten the well, make it simpler than just targeting this one. We are hoping to formulate a full plan to do what to do over the next high to six months as Paraj Dormara is concerned. And we will come up with a concise plan for you guys about how we look at Dormara going forward. We have to take our partner's views also into accounts in this one. So typically, wherever these are joint major operations, that is our candidate, we will have to get everybody along 100% of the operations team. It's just us as a management team making a call on what to do.

Okay, and once the OPEX for REL is done, my understanding would be the OPEX could almost be the same for all the types, right? Or is that also very different?

No, the OPEX is not fundamentally large. In this one, it's not going to be drastic. There might be a little bit of Assam element in there because the cost structures are fundamentally different in Assam than the Gujarat, which is a lot different as far as oil and gas operations concerns. But office is not going to be an order of magnitude number like 70 crores or so. That's more of a capex issue because that's because the wells are deep, but there's a 3.5-kilometer well, unlike 1.5-1.6-kilometer wells that we drilled in Canada.

Got it, got it, got it. So we would be able to have leniency composition only coming back, maybe, I mean, we have an estimate only next year, right? Correct?

If there is no back to how much we might need to take it out, I mean.

Got it. Thank you. Thank you. Our next question comes from the line of Mantris, Aurora, with the Northern Lights belt. Please go ahead.

Yeah, thank you. So, sir, just following up on the previous participant's question on Dwarna, you mentioned that, you know, we found our oil instead of gas, which we were not expecting. And then the decision is on whether we want to flow oil or not. So my question is, you know, if we decide to flow, then it means that we'll be able to monetize it earlier than if we had found gas there because we had to check out evacuation pipelines, etc. Is that the right way to think?

That would be it, but I just want to give a little bit more color to it. I think, look, even in the gas system, we would have been able to develop a facility and monetize earlier as well, because gas, the challenge in the gas evacuation and monetization in Assam is that Assam is not connected yet to the national list. So, therefore, even if you have capacity to produce gas, all the gas that Assam has capacity to doesn't get sold in the market. So, therefore, you end up selling gas at a discount to ATM prices in Assam. That's the story there. There's a lot of other things happening in terms of the industrialized gas. Gas in Assam is easy to monetize in terms of putting up a facility, but it has its own challenges which are more to do with structural in terms of your ability Thank you.

Thank you for that. Just clarification. Yeah, on Guamara, is it dependent on the Dulyajan-Nomuligar pipeline or it is a separate pipeline?

It's all dependent. It is all dependent on exactly your pickups, the exact piece that is causing problems to everybody in that part of the world. Yes. Till that is not sorted, everybody is in the same voting as well. As far as the answer, our question is clear.

All right.

I think there's another clarification, sir, on the TV online. Sorry to interrupt, man, please, sir. If we can request it, we'll return to the view for all of the questions. Right.

Anything you have, you drop us an email. We will answer it over email. No problem. Thank you very much.

Thank you. The next question comes from the line of Priyankar Sarkar with Square64 Capital Advisor 70. Please go ahead.

Hi, great deal, sir. I hope I'm audible.

Yes, yes, yes.

Not audible. Sir, one basic question, while I understand that you don't have the QC reserve as yet for the new fields that we have won in the DSF round 4, but just wanted to get a sense in terms of, let's say, you know, the existing portfolio and X amount of reserve. What is the kind of reserve that we are talking about that we have won in DSF? So, I'm sure you must be having some estimates, 2X of that, 2.5X. Any kind of sense that would be helpful to you?

I think, sir, in my introduction, I did say that potentially KG offshore has reserve base that is bigger than, if not equal, our offshore base. As I already mentioned, we would like to understand it a little bit better ourselves, but it potentially is equal, if not bigger, than our offshore reserve base. Our offshore reserve base, we have already declared, sir. Okay, sure, sir.

And is there any specific update you have on the pipeline connectivity in Assam? I know you stepped upon this in the last question which you answered, but any more specific update on the pipeline connectivity in Assam? Has there been a push from the government then due to the ongoing crisis in the Middle East?

Friends, sir, not that I am having any update to it, you know, this is something that is between North East Pipeline, Connectivity, the group thing that happens, which we are always inviting to, and we go in, but it hasn't yet been as far as we are aware.

Sure, sir. Thank you. That's it for me.

I wish you all the best. Thank you. The next question comes from the line of M. N. Kumar, an individual investor, Congratulations, Sanya. Very good results and I definitely appreciate the cost control that they have put in the place for the last three years and the way the assets are being used. I have two questions related to balance sheet.

Why does CWIP have been so high because most of our assets are in production, right?

All the campaign assets are being put onto production but we have plenty of offshore assets which include studies, marketing studies. So out of the 190 crore we will see getting capitalized once the production is produced. And the other ones are towards the other fields wherein either as of 30th September because we are in a continuous campaign, you will see some of it get capitalized. As in when the wells are getting, being more into production, but we get capitalized once.

Okay, I hope that answers. Yeah, that answers. The second one that I have is that, why is our tax liabilities are growing substantially?

Sir, it is a late work, Kumar, is that we are entitled to all the effects which we are incurring towards drilling of a well. We are able to claim our ITXM. This is an incentive which is not only given to us, but it is given to us as an industry as a whole. We are given this benefit, and you will see this as we continue to...

But when does this reverse law return to Mr. MNKamal, we requested to return to Q4 for the follow-up screen, as there are several participants waiting for that answer.

So, maybe I'll just answer that. As long as we are continuing to drill the well, the tax liability is thought of getting at least partially in a row, given that we are in a road trajectory. The intent is not to do a, if the entire intent of the policy was to give certain tax incentives to, it is not about a reversal, we will end up having these reverse, not finding enough opportunity to see a cache or these numbers in your language.

Thank you. The next question comes from the line of Sashwat Jalan with NVAlpha. Please go ahead. Hi, sir. Thank you for the opportunity. I just have a couple of questions. Firstly, as we are guiding for our 5000 BOPT number for F529, I just wanted to check within the Duarmara field, are we assuming the gap of tick is given in that number or is it purely Cambly plus BOPT? Thank you, ladies and gentlemen. Thank you. We will take that as our last question for today. I now have the conference over to the management for closing comments. Over to you, sir.

So, thank you very much. Of course, it is time to end because this was our first talk. So, therefore, there will be a lot of... Please feel free, as Rajiv has said, to reach us at our investor email and we commit that we will get back to you with our responses within a... Thank you very much, and look forward to speaking with you at the end of next quarter.

Thank you members of the Managing. On behalf of E-CREDIUS Securities Private Limited, that concludes this conference. Thank you everyone for joining us and even now disconnect your lines. Thank you.