Q1 2027 Hindustan Oil Exploration Company Ltd Earnings Call

August 13, 2026

Speaker #1: Ladies and gentlemen, you have been connected to our Hindustan Oil Exploration Company Limited conference call. Please stay connected; the call will begin shortly. Ladies and gentlemen, you have been connected to our Hindustan Oil Exploration Company Limited conference call.

Speaker #1: Please stay connected; the call will begin shortly. Ladies and gentlemen, good day, and welcome to the Hindustan Oil Exploration Company Limited Q1 FY27 earnings conference call.

Operator: [IVR/AVR] Ladies and gentlemen, good day and welcome to the Hindustan Oil Exploration Company Limited Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touchscreen phone. Please note that this conference is being recorded.

Speaker #1: I would now like to hand the conference over to Ms. Saloni Soni from EY. Thank you, and over to you, ma'am.

Operator: I would now like to hand the conference over to Ms. Saloni Soni from EY. Thank you, and over to you, ma'am.

Speaker #2: Good day, everyone, and welcome to the Q1 FY27 earnings conference call of Hindustan Oil Exploration Company Limited. The company published its results yesterday, and I have uploaded the investor presentation on the exchanges earlier today.

Saloni Soni: Good day, everyone, and welcome to the Q1 FY27 earnings conference call of Hindustan Oil Exploration Company Limited. The company published its results yesterday and have uploaded the investor presentation on the exchanges earlier today. I trust all of you would 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 the actual results to differ from those anticipated. These statements are based on management's beliefs and assumptions on information currently available to the management. Audiences 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 in today's conference call.

Speaker #2: I trust all of you would 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.

Speaker #2: Such forward-looking statements are subject to risks and uncertainties, which could cause the actual results to differ from those anticipated. These statements are based on management's beliefs and assumptions, and on information currently available to management.

Speaker #2: Audiences 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 on today's conference call.

Speaker #2: We have with us Mr. Baruchi Mishra, Managing Director and CEO, and Mr. Alan Joseph Andrade, CFO. Without further ado, I'd like to hand over the call to Mr. Mishra.

Saloni Soni: We have with us Mr. Baroruchi Mishra, Managing Director and CEO, and Mr. Allen Joseph Andrade, CFO. Without further ado, I'd like to hand over the call to Mr. Mishra. Thank you, and over to you, sir.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you, Saloni. Good afternoon to all of you who are on the call. Before we start, may I request you to spend 20 seconds looking around for your escape and evacuation routes, just in case of an emergency?

Baroruchi Mishra: Thank you, Saloni. Good afternoon to all of you who are on the call. Before we start, may I request you to spend 20 seconds looking around for your escape and evacuation routes, just in case of an emergency. Familiarize yourselves, because that's a good thing to do when we start any conference calls or anything. The standard thing to do. This is a standard thing that we should all be doing. With that, let me start with a brief on how the quarter has been, what have we been doing, and what is the look ahead for us. The quarter unfolded against a backdrop of continued focus on energy security, as you know. Domestic hydrocarbon production and infrastructure development across the entire oil and gas sector has been a heavy lift for the country.

Speaker #3: Familiarize yourselves, because that's a good thing to do when we start any conference calls or anything.

Speaker #4: A standard issue.

Speaker #3: So, this is a standard thing that we should all be doing. With that, let me start with a brief on how the quarter has been, what we have been doing, and what the outlook is for us.

Speaker #3: The quarter unfolded against a backdrop of continued focus on energy security, as you know. Domestic hydrocarbon production and infrastructure development across the entire oil and gas sector has been a heavy lift for the country.

Speaker #3: While the broader industry continues to navigate operational and market challenges, the long-term fundamentals remain very encouraging for us, supported by the huge demand that the country continues to see now and in all times to come. To be able to propel our growth by 7–8 percent, energy becomes the bedrock of this growth for the country.

Baroruchi Mishra: While the broader industry continues to navigate operational and market challenges, the long-term fundamentals remained very encouraging for us, supported by the huge demand that the country continues to see now and in all times to come, to be able to propel our growth by 7% to 8%. Energy becomes the bedrock of this growth for the country. Against this backdrop, our focus for this quarter remained absolutely clear. We continued to prioritize operational execution, production optimization, and continued to work on our development projects while all the time trying to have a strict discipline in our capital allocation. While certain assets faced short-term operational challenges, we made meaningful progress across the portfolio in positioning our key projects for future growth. So one by one, I'll take you through the progress across our portfolio, beginning with our offshore assets.

Speaker #3: Against this backdrop, our focus for this quarter remained absolutely clear. We continue to prioritize operational execution and production optimization, and we continue to work on our development projects while, all the time, trying to have a strict discipline in our capital allocation.

Speaker #3: While certain assets faced short-term operational challenges, we made meaningful progress across the portfolio in positioning our key projects for future growth. So, one by one, I'll take you through the progress across our portfolio, beginning with our offshore assets.

Speaker #3: So, at BAT, our flagship offshore asset, production during the quarter was impacted by higher water cuts from one of the producing wells, resulting in lower output.

Baroruchi Mishra: At B-80, our flagship offshore asset, production during the quarter was impacted by higher water cuts from one of the producing wells, resulting in lower output. If you remember, we had said last time that we have to do workover on these wells to shut off the water zone, et cetera. Incidentally, the water cut continued to increase, and that has impacted production, but we continue to produce from these wells. In order to sustain production at near similar or slightly higher rates, we have changed the configuration of the compressor trains on the platform, on the MOPU, so that the compressors are now able to operate with a lower suction pressure. What that does is that allows the well to flow more even when the flowing pressures of the well decreases. That configuration change has been done, and we are in a test mode now.

Speaker #3: Now, if you remember, we had said last time that we have to do work over on these wells to shut off the water zone, etc.

Speaker #3: Incidentally, the water cut continued to increase, and that has impacted production, but we continue to produce from these wells. In order to sustain production at near similar or slightly higher rates, we have changed the configuration of the compressor trains on the platform, on the MOPU, so that the compressors are now able to operate with a lower suction pressure.

Speaker #3: What that does is it allows the well to flow more evenly even when the flowing pressure of the wells decreases. So, that configuration change has been done and we are in test mode now.

Speaker #3: The workover of two existing wells, which are D1 and D2, continues to stay on track. We are in discussion with the RIC for the final award this month, and then they would be mobilized by October. At that time, they will work over the two wells, which are currently producing. They will shut off the water zones, open up new oil and gas zones, and ensure that we have increased production from these two wells.

Baroruchi Mishra: The workover of two existing wells, which is D1 and D2, we continue to stay on track. We are in discussion with the rig for the final award this month, and then they would be mobilized by October, at which time they will work over on the two wells which are currently producing, shut off the water zones, open up new oil and gas zones, and ensure that we have an increased production from these two wells. We have made meaningful progress on resolving our Hindustan Petroleum Corporation Limited issue, albeit that there were delays in the offtake by road. With that said, the offtake continues, and we are reselling the crude to third parties. Moving to B-15, which is the new block which has been awarded to us. The FDP is under preparation. We are looking at all concepts. We are evaluating three or four concepts at this stage.

Speaker #3: We have made meaningful progress on resolving our HPCL issue. There were delays in the off-take by road, but that said, the off-take continues.

Speaker #3: And we are reselling the crew to third parties. Moving to B-15, which is the new block that has been awarded to us, the FDP is under preparation.

Speaker #3: We are looking at all concepts. We are evaluating three or four concepts at this stage. One of them includes connecting to the existing ONGC platform to reduce our capital costs.

Baroruchi Mishra: One of them includes connecting to the existing Oil and Natural Gas Corporation's platform to reduce our capital costs. All of that is being worked now, and we will do the drilling in FY 2028. The reserve levels are 16 MMBOE, which will be reappraised after we have done some more processing and after the first well. We are hopeful that we will see an upside. At PY1, which is in our East Coast, the relay platform, the three wells, we have suffered serious production loss, and now we are in discussion, or we have already awarded a contract for rig-less intervention on the wells, which will increase production from these wells in the short term before we come back and drill two new wells.

Speaker #3: So all of that is being worked now, and we'll do the drilling in FY 2028. The results levels are 16 BOE, which will be reappraised after we have done some more processing and after the first well.

Speaker #3: We are hopeful that we'll see an upside. At PY-1, which is on our East Coast, the wellhead platform and the three wells have suffered serious production loss.

Speaker #3: And now we are in discussions, or we have already awarded a contract for rigless intervention on the wells, which will increase production from these wells in the short term before we come back and drill two new wells.

Speaker #3: Now, the drilling of those two new wells, while we had planned for quarter four of next year, has become contingent upon the ability of the gas buyers, IOCL's obligation to lift our gas. Because otherwise, we will have sat on these new wells, having drilled them, ready to produce, and if they keep them shut for X number of months, they will again be watered out.

Baroruchi Mishra: The drilling of those two new wells, while we had planned for Q4 of next year, they have become contingent upon the ability of the gas buyers, Indian Oil Corporation Limited or GAIL, to lift our gas because otherwise we will have sat on these new wells, having drilled them, ready to produce, and if we keep them shut for X number of months, they will again be watered out. This time, we are trying to get it right. As far as possible, we will have a take or pay agreement either with GAIL or with Indian Oil Corporation Limited, and only then we will spot the wells. That is the intent that we have. We are going to have that. But in the interim, we are doing the rig-less completion to increase production from PY1. Let us get back to the onshore portfolio. We have Dhemaji in Assam, a highly prosperous field.

Speaker #3: So this time we are trying to get it right. As far as possible, we'll have a take-or-pay agreement either with GAIL or with IOCL, and only then we will spot the wells.

Speaker #3: So that's the intent that we have and are going ahead with. But in the interim, we're doing the rigless completion to increase production from PY-1.

Speaker #3: Now, let's get back to the onshore portfolio. So, we have DIROC in Assam, a highly prosperous field. We are the operator with approximately 27 percent.

Baroruchi Mishra: We are the operator with 27-odd percentage in the field. There isn't a reservoir in India and in large parts of the world where your production header pressure from six wells is 3,000 psi. That speaks to the prospectivity of this reservoir. With that said, we are producing only 60% or 70% or 50% of the capability from the existing well stock because of the lack of evacuation route. Now, stuff have happened in the evacuation route improvement. The PNGRB has made the DNPL line as a common carrier. Earlier, it was a captive of NRL of Oil India. Of course, operated by Assam Gas Company Limited, but now it is a common carrier. There were some areas or some sections in this pipeline which had degraded, and therefore the overall capacity of the pipeline has been reduced.

Speaker #3: In the field, there isn’t a reservoir in India and in large parts of the world where your production header pressure from six wells is 3,000 psi.

Speaker #3: That speaks to the prospectivity of this reservoir. But that said, we are producing only 60% or 70% of 50% of the capability from the existing well stock because of the lack of evacuation route.

Speaker #3: Now, things have happened in the evacuation route improvement, and the PNGRB has made the DNPL line a common carrier. Earlier, it was a captive of NRL slash Oil India.

Speaker #3: But now it's, I mean, of course, operated by AGCL, but now it is a common carrier. There were some areas or some sections in this pipeline which had degraded, and therefore the overall capacity of the pipeline has been reduced.

Speaker #3: So they have laid pipelines along the main pipeline for sections which are seen as set integrity challenges. They have to tie back into the main pipeline.

Baroruchi Mishra: They have laid pipelines along the main pipeline for sections which are seen as such integrity challenges. They have to tie back into the main pipeline. They are looking at hot tapping to tie back and get back the total capacity back to 2.5 million standard cubic meters from the current degraded capacity of 1.1 to 1.5 MMSCMD. That work is being done by Assam Gas Company Limited and we are in discussions with them just to be there to support with any technical requirements that they may have on this hot tapping. Coming to Kharsang, we had successfully completed nine wells program, and we doubled the production from last year. But we haven't rested there. We have continued to do workover on a few of the wells.

Speaker #3: They're looking at hot tapping to tie back and restore the total capacity to 2.5 million standard cubic meters per day from the current degraded capacity of 1.1 to 1.5 million standard cubic meters per day.

Speaker #3: So that work is being done by Assam Gas Company Limited. And we are in discussions with them just to be there to support with any technical requirements that they may have on this hot tapping.

Speaker #3: Coming to Katsang, we had successfully completed a nine-well program, and we doubled production from last year. But we haven't rested there. We have continued to do workovers on a few of the wells.

Speaker #3: We have, now, 23 additional wells there. We were sat for without production, and we have been working over them. Five or six workovers have been completed.

Baroruchi Mishra: We have 23 additional wells there where we were without production, and we have been working over on them. Five or six workovers have been completed, and we are incrementally increasing production. We are also getting ready for the second phase of nine wells. The rig has been identified. The award is imminent. We are looking at tubular. We are ordering the tubulars, which should be there in one or two months' time. Then we should be good to go for our second phase of drilling in Kharsang. The problem remains that if we find gas, then we don't have a buyer. In fact, we have found virgin gas in two of the wells in Kharsang. That's a good problem to have, but only thing is, it delays the monetization of the reserves because we don't have a pipeline.

Speaker #3: As we are incrementally increasing production, we are also getting ready for the second phase of nine wells. The rig has been identified, and the award is imminent.

Speaker #3: We are looking at—we are ordering the tubulars, which should be there in one or two months' time. And then we should be good to go for our second phase of drilling in Katsang.

Speaker #3: The problem remains that if we find gas, then we don't have a buyer. And, in fact, we have found virgin gas in two of the wells in Katsang.

Speaker #3: That's a good problem to have, but the only thing is it delays the monetization of the reserves, because we don't have a pipeline. So, we have started a pipeline route survey as we speak; the tender is out.

Baroruchi Mishra: We have started a pipeline route survey. As we speak, the tender is out. It will close tomorrow. Then we will have parties to start the route survey. There is a challenge there that it goes through a forest area, and so regulatory clearances might be an issue. But given where we are and the confidence that we give to the environmental teams and to the forest officials about not disturbing the fauna and flora of the forest, we should be able to navigate this regulation and should be able to start laying the pipeline in six to eight months' time. That will then connect us to a continuous gas flow path that Oil India has already created, and that will help us monetize the Kharsang gas molecules. Oil we are already selling to the Digboi refinery to various buyers, mostly Indian Oil Corporation Limited.

Speaker #3: It will close tomorrow. And then we will have parties to start the route survey. There is a challenge there, as it goes through a forest area, so regulatory clearances might be an issue.

Speaker #3: But given where we are, and the confidence that we give to the environmental teams and to the forest officials about not disturbing the fauna and flora of the forest, we should be able to navigate this regulation and should be able to start laying the pipeline in six to eight months' time.

Speaker #3: So that will then connect us to a continuous gas flow path that Oil India has already created, and that will help us monetize the Katsang gas molecules.

Speaker #3: Oil, we are already selling to the DICOY refinery and to various buyers, mostly IOCL. So, coming to Gujarat, in the Cambay Basin, we have, as well, Balol and Palej.

Baroruchi Mishra: So coming to Gujarat, in Cambay Basin, we have Asjol, Balol, and Palej fields. In Balol, we have started a new technology, which is a belt technology where the belt goes down and soaks up the oil and comes up and we squeeze out the oil. That new technology has been implemented. It is in the trial phase. Then we have also debottlenecked the Palej facility to be able to increase production by using thermionic heaters and those kinds of things. So overall, 20% to 30% increase in production we will see going forward, although we have already seen a 5% to 6% increase in the last quarter. But more to come. Palej has a lot of potential. We have to drill additional new wells. We have also ordered sucker rod pumps. So we are on track to increase production from our Cambay assets.

Speaker #3: In Balol, we have started a new technology, which is a belt technology, where the belt goes down and soaks up the oil and comes up, and we squeeze out the oil.

Speaker #3: That new technology has been implemented, though it is in the trial phase. And then we have also de-bottlenecked the Palej facility to be able to increase production by using thermohonic heaters and those kinds of things.

Speaker #3: So overall, we will see a 20 to 30 percent increase in production going forward, although we have already seen a 5 to 6 percent increase in the last quarter.

Speaker #3: But more to come. Palej has a lot of potential. We have to drill additional new wells. We have also ordered sucker rod pumps, so we are on track to increase production from our Cambay assets. A new block, which has to be given to us for exploration, is in the final stages of approval.

Baroruchi Mishra: A new block, which has to be given to us for exploration, is in the final stages of approval. Once that happens, and it is close to our Palej field, we will be drilling new exploratory wells as well. So that is the long and short of our portfolio, and we are on track to both grow value, create value, as well as preserve value for our organization and for you shareholders. With that, let me stop, and I will hand over to Allen for a quick two minutes, five minutes update on the financials, and then I will be very happy to take questions.

Speaker #3: Once that happens, it's close to our Palej field. We'll be drilling new exploratory wells as well. So that is the long and short of our portfolio.

Speaker #3: And we are on track to both create value, as well as preserve value, for our organization and for you, our shareholders. So with that, let me stop, and I'll hand over to Alan for a quick two- to five-minute update on the financials, and then I'll be very happy to take questions.

Speaker #1: Thanks, Viruthi. I will now take you through the financial and operational performance of the company for the quarter. During the current quarter, the company recorded standalone revenues from operations of ₹117.5 crore.

Allen Joseph Andrade: Thanks, Baroruchi. I will now take you through the financial and operational performance of the company for the quarter. During the current quarter, the company recorded standalone revenues from operations of INR 117.5 crores compared with negative of INR 194 crores in the previous quarter. After accounting for profit petroleum and revenue share of INR 9.83 crores, the net revenue stands at INR 107 crores, 107.6. The previous quarter was impacted by the reversal of the HPCL sale of INR 259 crores, as we are well aware. The consolidated revenue from operations for the quarter were INR 124 crores, and after profit petroleum and revenue sharing, the net consolidated revenue stands at INR 114.17 crores. The improvement in the current quarter, as Baroruchi has mentioned, was driven by higher production from the Kharsang field, mainly crude and favorable Brent prices.

Speaker #1: Compared with a negative of 194 crores in the previous quarter. After accounting for profit petroleum and a revenue share of 9.83 crores, the net revenue stands at 107.6 crores.

Speaker #1: The previous quarter was impacted by the reversal of the HPCL sale of ₹259 crore, as we are well aware. The consolidated revenue from operations for the quarter was ₹124 crore.

Speaker #1: And after profit petroleum and revenue sharing, the net consolidated revenue stands at ₹114.17 crores. The improvement in the current quarter, as Viruthi has mentioned, was driven by higher production from the Kutsang field.

Speaker #1: Mainly crew and favorable rent prices. This was augmented by the commencement of the liquidation of the BAT crew, although at a slower-than-expected pace.

Allen Joseph Andrade: This was augmented by the commencement of the liquidation of the BAT crude, although at a slower than expected pace. Even from an operational perspective, the production from Kharsang has been most encouraging, where production increased from approximately 12,300 barrels of oil, to 17,400 BOE. The average realization of crude and condensate improved significantly to about $95.5 a barrel compared with approximately $70.8 per barrel in the previous quarter on a standalone basis. In addition, the average gas price realization improved to $12 a barrel to MMBtu, compared with 9.8 MMBtu in the previous quarter. So quarter on quarter, price changes and the volume changes from Kharsang has delivered a really good top line. Coming to profitability, the standalone profit before tax and exceptional item was INR 112.54 crores for the quarter, compared to INR 30.4 crores in the previous quarter.

Speaker #1: Even from an operational perspective, the production from Katsang has been most encouraging, where production increased from approximately 12,300 barrels of oil to 17,400 BOE.

Speaker #1: The average realization of crude and condensate improved significantly to about $95.5 per barrel, compared with approximately $70.8 per barrel in the previous quarter, on a standalone basis.

Speaker #1: In addition, the average gas price realization improved to $12 per MMBTU compared with $9.8 per MMBTU in the previous quarter. So, quarter-on-quarter, price changes and volume changes from Katsang have delivered a really good top line.

Speaker #1: Coming to profitability, the standalone profit before tax and exceptional items was ₹12.54 crore for the quarter, compared to ₹30.4 crore in the previous quarter.

Speaker #1: This is mainly due to the offset to cost from higher inventory of crude in the previous quarter. As you know, in the previous quarter we reversed out the sale from HPCL, and hence that resulted in a lower cost offset to the overall operating cost.

Allen Joseph Andrade: This is mainly due to the offset to cost from higher inventory of crude in the previous quarter. As you know, the previous quarter, we reversed out the sale from Hindustan Petroleum Corporation Limited, and hence, that resulted in a lower cost offset to the overall operating cost. On a consolidated basis, the profit before tax and exceptional items was INR 6.5 crores, compared with INR 9.01 crores in the previous quarter. The other income for the quarter was INR 19.37 crores on a standalone basis and INR 20 crores on a consolidated basis. The standalone other income includes the release of a long due escrow balance pertaining to cost recovery of approximately INR 8 crores, income from an insurance claim which was admitted by the insurance company of INR 2 crores, and a topping up of the Agut acquisition as at March of approximately INR 2.3 crores.

Speaker #1: On a consolidated basis, the profit before tax and exceptional items was ₹6.5 crore compared with ₹9.01 crore in the previous quarter. The other income for the quarter was ₹19.37 crore on a standalone basis and ₹20 crore on a consolidated basis.

Speaker #1: The standalone income includes the release of a long-due escrow balance pertaining to cost of recovery of approximately ₹8 crore income from an insurance claim, which was admitted by the insurance company of ₹2 crore, and topping up of the adult acquisition as at March of approximately ₹2.3 crore.

Speaker #1: The movement of profitability needs to be viewed in the context of the quarter's cost structure, mainly the impact of changes in inventory of crude, which is stored in tankers and not sold until the appropriate time.

Allen Joseph Andrade: The movement of profitability needs to be viewed in the context of the quarter's cost structure, mainly the impact of changes in inventory of crude, which is stored in tankers and not sold till the appropriate time. Standalone total expenses for the quarter at INR 114 crores included depletion of INR 51 crores, royalty cess and other statutory dues of INR 13 crores, and stock adjustments of INR 41 crores. On a consolidated basis, the total expenses were INR 128 crores, with costs including depletion at INR 58 crores, royalty cess and other statutory dues at INR 15 crores, and stock adjustments of INR 41 crores. The consolidated statements include the 10% G&P sales from Kharsang. As we look ahead, our focus will be cost reduction and cash management to ensure, as Baroruchi Mishra said, the allocation of funds to maximize full potential of the existing reserves.

Speaker #1: Standalone total expenses for the quarter at ₹114 crores included depletion of ₹51 crores, royalty, cess and other statutory dues of ₹13 crores, and stock adjustments of ₹41 crores.

Speaker #1: On a consolidated basis, the total expenses were ₹128 crores, with costs including depletion at ₹58 crores, royalty, cesses and other statutory dues at ₹15 crores, and stock adjustments of ₹41 crores.

Speaker #1: The consolidated statements include the 10 percent GEO and Pro sales from Katsang. As we look ahead, our focus will be cost reduction and cash management to ensure, as Viruthi said, the allocation of funds to maximize the full potential of the existing reserves.

Speaker #1: Thank you, and I will hand it back to you, Soloni. I think we're done.

Allen Joseph Andrade: Thank you, and I will hand it back to you, Saloni Soni. I think we are done.

Speaker #2: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone.

Operator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Dhruv from Leo Capital. Please go ahead.

Speaker #2: If you wish to remove yourself from the question queue, you may press star and. Participants are requested to use handsets while asking a question.

Speaker #2: Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. We have our first question from the line of group from Leo Capital.

Speaker #2: Please go ahead.

Speaker #3: Thanks for the opportunity. I have a couple of questions. My first question is: What is the current status and expected timeline for the North East Grid connectivity that DIROC depends on?

[Analyst] (Leo Capital): Thanks for the opportunity. I have a couple of questions. My first question is, what is the current status and expected timeline for the northeast grid connectivity that Dirok depends on? Is the pipeline interconnection actually complete now, or is it still pending? Once it is ready, by when do we expect Dirok production to ramp to the decent levels?

Speaker #3: Is the pipeline interconnection actually complete now, or is it still pending? And once it's ready, by when do we expect DIROC production to ramp up to decent levels?

Speaker #1: So, I would take it that by December this should be completed. The Assam Gas Company Limited, which owns and operates the pipeline, is in discussion for hot taps to be carried out.

Baroruchi Mishra: Our take is that by December, this should be completed. The Assam Gas Company Limited, which also operates the pipeline, is in discussion for hot taps to be carried out. In the NRL, there is 100 odd meters of pipeline which has to be done. That also needs a hot tap. We are told that by December, all of this will be completed because right now, after the hot tap option has become available, NRL shutdown is no more needed. It is roughly 16 to 20 months lead time for hot taps. That work is going on with the Assam Gas Company. December is what we are looking at.

Speaker #1: And then in the NRL, there is a 100-odd kilometers, 100-odd meters of pipeline which has to be done. That also needs a hot tap.

Speaker #1: We are told that by December all of this will be completed because, right now, after the hot tap option has become available, NRL shutdown is no more needed.

Speaker #1: So, it is roughly 16 to 20 months lead time for hot taps, so that work is going on with the Assam Gas Company. So December is what we are looking at.

Speaker #3: Okay, thank you. My second question is regarding your view on BAT currently. How is the production and monetization progressing given the HPCL dispute, and when do we expect the issue to be resolved?

[Analyst] (Leo Capital): Okay. Thank you. My second question is regarding what is your view on B-80 currently? How is the production and monetization progressing given the HPCL dispute, and when do we expect the issue to be resolved?

Speaker #1: So, if you mean the BAD crude which is stored in HPCL tanks, commingled with their crude, we are in—the sale continues through tankers to third parties. We had reversed the sale, as Alan said, by March–April of this year, and we agreed to sell it to third parties. The speed at which it is being picked up by the third parties is slower than expected, but we hope that by end of October or early November, the entire crude inventory will be gone from the B50, from the HPCL refinery in Chembur in Mumbai.

Baroruchi Mishra: If you mean the B-80 crude which is stored in HPCL tanks commingled with their crude, the sale continues through tankers to third parties. We had reversed the sale, as Alan said, in March, April of this year, and we agreed to sell it to third parties. The speed at which they are being picked up by the third parties is slower than expected, but we hope that by end of October, early November, the entire crude inventory will be gone from the HPCL refinery in Chembur in Mumbai.

Speaker #3: Okay, sir, that was really helpful. Thank you, and all the best for the next quarter.

[Analyst] (Leo Capital): Okay, sir. That was really helpful. Thank you, and all the best for the next quarter.

Speaker #1: Thank you.

Baroruchi Mishra: Thank you.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star and one. The next question is from the line of Shubham Jain from NB Alpha Fund.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Shubham Jain from NV Alpha Fund. Please go ahead.

Speaker #2: Please go ahead.

Speaker #4: Hi, sir. Thank you for taking my question. My first question is: how much was the impact on the P&L because of mark-to-market rate losses on the inventory that we're holding?

Shubham Jain: Hi, sir. Thank you for taking my question. My first question was how much was the impact on the P&L because of sort of mark-to-market losses on the inventory that we are holding?

Speaker #1: So the jury has to still come back home. We are in the process of selling it, and it is dependent upon the Brent price. So we have sold roughly 15 percent of the crude as we speak, and the realization has been—we have incurred some losses, which is another in the range of ₹4 to ₹5 crores, maybe ₹6 crores. But we still have to go with the remainder of the crude, which is now picking up as the monsoon wears out.

Baroruchi Mishra: The jury has to still come back home. We are in the process of selling it, and it is dependent upon the Brent price. We have sold roughly 15% of the crude as we speak, and the realization has been, we have incurred some losses, which is another 4 to 5 crores, maybe 6 crores. But we still have to go with the remainder of the crude, which is now picking up as the monsoon bears out. We will suffer a loss. Now, how much? I will put my number to around 7% to 10%, but please don't take it as a guidance.

Allen Joseph Andrade: The jury has to still come back home. We are in the process of selling it, and it is dependent upon the Brent price. We have sold roughly 15% of the crude as we speak, and the realization has been, we have incurred some losses, which is another 4 to 5 crores, maybe 6 crores. But we still have to go with the remainder of the crude, which is now picking up as the monsoon bears out. We will suffer a loss. Now, how much? I will put my number to around 7% to 10%, but please don't take it as a guidance.

Speaker #1: So we will suffer a loss now. How much? I will put my number at around 7 to 10 percent, but please don't take it as guidance.

Speaker #4: Correct. And if I adjust for this number in this quarter's number, what would the EBITDA have been?

Shubham Jain: Got it. If I adjust for this number in this quarter's number, what would the EBITDA have been?

Speaker #1: EBITDA?

Baroruchi Mishra: EBITDA?

Allen Joseph Andrade: EBITDA?

Speaker #4: Yeah. So if we've done a six-year EBITDA and there is a certain adjustment that's happened because of the inventory levels, what would the EBITDA have been after these adjustments?

Shubham Jain: Yeah. You've done a 60-hour EBITDA, and there is a certain adjustment that's happened because of the inventory levels. What would the-

Baroruchi Mishra: Right

Allen Joseph Andrade: Right

Shubham Jain: EBITDA have been as of these adjustments?

Speaker #1: Okay, let me come back to you on that because I don't want to give you—it's a bit of a technical issue, because there is inventory adjustment, there is profit petroleum adjustment, there's a cost, there's a sale adjustment.

Baroruchi Mishra: Okay, let me come back to you on that because I do not want to give you. It is a bit of a technical issue because there is inventory adjustment, there is profit petroleum adjustment, there is a sale adjustment.

Allen Joseph Andrade: Okay, let me come back to you on that because I do not want to give you. It is a bit of a technical issue because there is inventory adjustment, there is profit petroleum adjustment, there is a sale adjustment.

Speaker #1: Okay.

Speaker #4: Understood. My second question was, how is the sort of realignment in October, and where is that you want to dig in BAT, progressing?

Shubham Jain: Understood. My second question was, how is the sort of, rigs alignments, work over on wells that we want to dig in B-80 progressing?

Speaker #1: Can you speak slightly more slowly? We couldn't hear you. I mean, you were not clear.

Baroruchi Mishra: Can you speak slightly slowly? We could not hear you. You are not clear.

Speaker #4: So sorry. I mean, I hope I'm clear now. I was asking, how is the sort of alignment of rigs happening for the workover plus the new wells that we want to dig in DAT? Do we already have it in place, and are we on track to complete it by Q3 and Q4 '27, respectively?

Shubham Jain: Sorry. I hope I am clear now. I was asking.

Baroruchi Mishra: Yeah

Shubham Jain: how is the alignment of rigs happening for the work over plus the new wells that we want to dig in B-80? Do we already have it in place? Are we on track to complete it by Q3 and Q4 2027, respectively?

Speaker #1: Yeah. So we'll start so if you're wanting to understand about the campaign this is a single campaign that we will be looking to to deliver the first one would be 2 work hours which are which are in the range of 10 to 15 to 20 days each and then we'll have three wells which would be in 30 to 40 days each and that will take us towards the end of March early April and then we'll install a a jacket on it and a and a production deck and on that basis we will start production now these are offshore wells stuff happens sometimes the tubing gets stuck and so there could be delays so we are we are but the plan remains that by June of next year we'll bring three wells on production and by November and December of this year which is 2026 we will have two wells that we have worked over on production.

Baroruchi Mishra: Yes. If you are wanting to understand about the campaign, this is a single campaign that we will be looking to deliver. The first one would be two work overs, which are in the range of 10 to 15 to 20 days each. Then, we will have three wells, which would be in 30 to 40 days each. That will take us towards the end of March, early April. Then we will install a jacket on it and a production deck. On that basis, we will start production. Now, these are offshore wells. Stuff happens. Sometimes the tubing gets stuck, so there could be delays. But the plan remains that by June of next year, we will bring three wells on production. By November and December of this year, which is 2026, we will have two wells that we have worked over on production.

Speaker #4: Got it. Understood. Thank you so much. I'll get back in the queue.

Shubham Jain: Got it. Understood. Thank you so much. I will get back in queue.

Speaker #1: Thank you.

Baroruchi Mishra: Thank you.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star and one. The next question is from the line of Ritesh Gandhi from Discover Capital.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Riddhesh Gandhi from Discovery Capital. Please go ahead.

Speaker #2: Please go ahead.

Speaker #3: Hi, sir. So, I just have a few questions. You know we've obviously had a long delay in terms of Assam with regards to, you know, for the last—I mean, two years. It's been a few months away, right, with regards to it starting?

Riddhesh Gandhi: Hi, sir. I just have a few questions. We have obviously had a long delay in terms of FDP with regards to for the last two years. It has been a few months away with regards to it starting. Just want to understand what is giving us the confidence now, and just wanted to understand what are the actual risks involved with regards to the Assam connectivity to the national grid.

Speaker #3: I just want to understand what's giving us confidence now, and I also wanted to understand what the actual risks are with regard to the PSM connection and its connectivity to the national grid.

Speaker #1: It's a very good question. So, the current circumstances have posed issues with the stakeholders because the country needs gas. There are supply chain disruptions; energy security has become a big issue.

Baroruchi Mishra: It is a very good question. The current circumstances have posed issues with the stakeholders because the country needs gas. There is supply chain disruptions. Energy security has become a big thing. There has been a lot of push from all stakeholders to align and get this done. To that extent, the PNGRB has hastened to ensure that the line which would carry the gas is no more a dedicated pipeline. It is a common carrier where anybody can pump the gas, if there is demand. That aspect is taken care of. The other aspect was, the degraded sections of the DNPL line had to be replaced to increase the capacity. Those lines have been laid. Those sections of lines have been laid.

Speaker #1: So there has been a lot of push from all stakeholders to align and get this done. And to that extent, the PNGRB has hastened to ensure that the line which would carry the gas is no longer a dedicated pipeline.

Speaker #1: It is a common carrier where anybody can pump the gas if there is demand, so that aspect is taken care of. The other aspect was the degraded sections of the DNPL line had to be replaced to increase the capacity.

Speaker #1: So, those lines have been laid—those sections of lines have been laid. Now it is just a matter of tying back to the original line so that the capacities can be increased.

Baroruchi Mishra: Now it is just a matter of tying back to the original line so that the capacities can be increased and the pressures can be increased. That was earlier dependent upon NRL shutdown, because to be able to cut the line, you would have to empty the entire pipeline, depressurize it, flush it with nitrogen, and that would mean 7 to 10 to 15 days of shutdown for the Numaligarh refinery. In discussions with Assam Gas Company Limited, many stakeholders, including us, we have been able to convince or we have been able to discuss that hot tapping could be a solution for ensuring that NRL does not have to take a shutdown. In fact, for hot tapping in a pipeline, you actually have to produce gas, continue to flow gas so that the heat can be dissipated. Assam Gas Company Limited has taken on this concept.

Speaker #1: And the pressures can be increased. That was earlier dependent upon NRL shutdown, because to be able to cut the line, you would have to empty the entire pipeline, depressurize it, flush it with nitrogen, and that would mean 7 to 10 to 15 days of shutdown for the Numaligarh refinery.

Speaker #1: In discussions with Assam Gas Company Limited, many stakeholders including us—we have been able to convince, or we have been able to discuss, that hot tapping could be a solution for ensuring that NRL does not have to take a shutdown.

Speaker #1: In fact, for hot tapping in a pipeline, you actually have to continue to flow gas so that the heat can be dissipated.

Speaker #1: So, Assam Gas Company Limited has taken on this concept. They are in the process of awarding the hot tapping contract. We have been in discussions with them to provide technical support. Although we are not directly connected, just as a responsible stakeholder, we have been in discussions with Assam Gas Company to provide support on the technical aspects they might need on the hot tap.

Baroruchi Mishra: They are in the process of award of the hot tapping contract. We have been in discussions with them to provide technical support. Although we are not directly connected, just as a responsible stakeholder, we have been in discussions with Assam Gas Company to provide technical support that they might need on the hot tap. That gives us a level of confidence. It could have started a bit early, the tender, et cetera, but floods have made a lot of disruption in Assam as we speak. Things are getting back to normal. In talking to the service providers of the hot tap, they are saying 16 to 20 weeks, although they are trying to bring it forward now.

Speaker #1: So, that gives us a level of confidence. But it could have started a bit earlier—the tender, etc. But floods have made a lot of disruption in Assam as we speak.

Speaker #1: Things are getting back to normal. In talking to the service providers for the hot tap, they're saying 16 to 20 weeks, although they are trying to bring it forward now.

Speaker #1: So we're hoping that in December the hot taps will be completed, and we should be able to get higher capacity in these lines and then be able to flow to the national gas grid.

Baroruchi Mishra: We are hoping that in December the hot taps will be completed, and we should be able to get higher capacity in these lines and then be able to flow to the national gas grid.

Speaker #1: So that.

Speaker #3: But NRL has been refusing to take a has been refusing to to take a shutdown for the last few years is it because I mean that's the easiest solution which was there right.

Riddhesh Gandhi: NRL has been refusing to take a shutdown for the last few years, is it? Because, I mean, that's the easiest solution which was there, right?

Speaker #1: Also, it would not be fair for me to say that they have been refusing to take a shutdown. It also depends on whether they are allowed to take a shutdown, given the shortage of products, etc.

Baroruchi Mishra: Also, it would not be fair for me to say that they have been refusing to take a shutdown. It is also dependent upon whether they are allowed to take a shutdown, given the shortage of products, et cetera. There are multiple things that play there, and I will not be the right person to comment. Long story short, the shutdown was delayed. We agreed with Assam Gas Company. They were looking for options, and we discussed that hot tap could be an option.

Speaker #1: So there are multiple things that play there and I'll not be the right person to comment but long story short the shutdowns shutdown was delayed and we agreed with Assam Gas Company they were looking for options and we discussed that hot taps could be an option and on that basis they are they are they are progressing.

Riddhesh Gandhi: Okay.

Baroruchi Mishra: On that basis, they are progressing.

Speaker #3: Got it. Sir, and the other question, you know, similarly with regards to BAT as well—you know we've done a number of reworkings over the last few years, right? Whether it was having the chemicals brought in and all of the equipment, etc.

Riddhesh Gandhi: Got it. Sir, the other question is similarly with regards to B-80 as well. We have done a number of reworkings over the last few years, right? Whether it was having the chemicals brought in and all of the equipment, et cetera, over the last few years. Now, again, there appears to be another solution here. What is, again, giving us the confidence that it is going to work this time around when, historically, it has not? Just wanted to understand, actually, what would give us the confidence that there is not anything structurally wrong with the B-80 and that it is actually fixable?

Speaker #3: Over the last few years, now again, there appears to be another solution here. What, again, is giving us the confidence that it's going to work this time around, when historically it hasn't? I just wanted to understand actually what would give us the confidence that there isn't anything structurally wrong with the BAT and that it's actually fixable.

Speaker #1: That's a good question. In the oil and gas sector, we have to continue to pursue production so long as we have a level of confidence that the recoverable reserves are still in the ground.

Baroruchi Mishra: That is a good question. In the oil and gas sector, we have to continue to pursue production so long as we have a level of confidence that the recoverable reserves are still in the ground. In India, we do not have an ecosystem where you can make a phone call and get a vessel to do work on a subsea completion well. These two are subsea completion wells. Stuff have been tried in the past where we have used chemicals to shut off water zones, et cetera. Some of it has worked, some of it has not, but now we are getting a rig to be able to completely shut off the water zone through rig intervention. So the level of confidence in making an improvement towards higher production is high.

Speaker #1: In India, we don't have an ecosystem where you can make a phone call and get a vessel to do work on a subsea completion well.

Speaker #1: And these two are subsea completion wells. So, things have been tried in the past where we have used chemicals to shut off water zones, etc.

Speaker #1: Some of it has worked. Some of it hasn’t. But now, we are getting a rig to be able to completely shut off the water zone through rig intervention.

Speaker #1: And so the level of confidence in making a making a improvement making an improvement towards higher production is high. We will have to do reperforation etc.

Baroruchi Mishra: We will have to do reperforation, et cetera, because the flexibility to operate increases if you have a rig on the well. These are subsea wells, so if they were dry Christmas trees on a wellhead platform, we could have brought a coil tubing like we are doing in PY1 or a well line and would have done stuff inside the well. But these are subsea wells, and to be able to make an intervention in these wells, physical intervention through a tubing, et cetera, to change zones, to reperforate new gas and oil producing strata, you need a rig. That rig we are getting now. We believe our 2P reserves are still there, 26 million, of which 1.5, 2 million has been produced so far. So there are reserves to be produced. So we are giving it our best shot.

Speaker #1: Because the flexibility to operate in freezes if you have a rig on the well. And these are subsea wells. So you can't—if they were dry Christmas trees on a valet platform, you could have brought a coil tubing, like we are doing in PY1, or a wireline, and would have done stuff inside the well.

Speaker #1: But these are subsea wells and to be making an and to be able to make an intervention in these wells physical intervention through a tubing etc.

Speaker #1: To change zones to reperforate new gas and oil producing strata, you need a rig. And that rig we are getting now. We believe our 2P reserves are still there—26 million, of which 1.5 to 2 million has been produced so far.

Speaker #1: So, there are reserves to be produced. We are giving it our best shot. We are planning properly, and we hope that we will be able to minimize the rest. Risks are always there in the oil and gas sector.

Baroruchi Mishra: We are planning properly, and we hope that we will be able to minimize the risks. Risks are always there in the oil and gas sector. We are hopeful that we will minimize the risk and recover our investments with very good margins after we do this work.

Speaker #1: We are hopeful that we'll minimize the risk and recover our investments with very good margins after we do this work.

Speaker #3: Got it. Sir, the other question was: in your latest presentation, we seem to have increased our capex budget from the Q4 presentation. Is this because of escalating actual costs, or is it because of incremental opportunities that we are pursuing?

Riddhesh Gandhi: Got it. Sir, the other question was in your latest presentation, we seem to have increased our CapEx budget from the Q4 presentation. Is this because of escalating, actually, costs or is it because of incremental opportunities that we are pursuing?

Speaker #1: So at this stage, unless we have awarded the rig contract, we'll always have to have a contingency. The rigs have come into very short supply now.

Baroruchi Mishra: At this stage, unless we have awarded the rig contract, we will always have to have a contingency. The rigs have come in very short supply now. As the oil prices increase, everybody wants to drill. So we have to have some increases in the contingency. It is not that whatever we have said as a CapEx will be spent. That is the kind of facility that we will be creating, and we will draw down on the facility on a need basis. After doing these two workovers, our own cash flows will also improve, and a part of that would be funded off from our internal cash flows. But just to be cautious, we are going into the market.

Speaker #1: As the oil prices increase, everybody wants to drill. So we have to have some increases in the contingency, and it is not that whatever we have said as capex will be spent.

Speaker #1: That is the kind of facility that we will be creating, and we'll draw down on the facility on a need basis. After doing these two workovers, our own cash flows will also improve, and a part of that would be funded from our internal cash flows.

Speaker #1: But just to be cautious, we are going into the market. We are talking to the investors and to the banks to be able to raise a pot of money, which will allow us to do the work over and the three wells and bring them on production unhindered from a cash position.

Baroruchi Mishra: We are talking to the investors and to the banks to be able to raise a pot of money which will allow us to do the workover in the three wells and bring them on production unhindered from a cash position.

Speaker #3: Got it, got it. Okay, sir, I'll rejoin the queue. Thank you.

Riddhesh Gandhi: Got it. Okay, sir, I will rejoin the queue. Thank you.

Speaker #1: Thank you.

Baroruchi Mishra: Thank you.

Speaker #2: Thank you. We have our next question from the lineup. Arora from Aurora Wealth Advisors, please go ahead.

Operator: Thank you. We have our next question from the line of Mandeep Arora from Arora Wealth Advisors. Please go ahead.

Speaker #3: Yeah, thank you for the opportunity. Sir, one clarification first. Mr. Andrade, you mentioned that we realized $12 on the gas side. Now, is this blended realizations across Bate and Diroc?

Mandeep Arora: Yeah, thank you for the opportunity. Sir, one clarification first, Mr. Andrade. You mentioned that we realized USD 12 on the gas side.

Mandeep Arora: Now, this is blended realizations across B-80 and Dirok?

Speaker #1: Yes. This this is blended.

Allen Joseph Andrade: Yes, this is blended across both.

Speaker #3: Okay. So just a request—you know, in the previous presentations, we used to give asset-wise realizations on the gas and oil.

Mandeep Arora: Okay. Just a request. In the previous presentations, we used to give asset-wise realizations on the gas and oil.

Speaker #1: Yes.

Allen Joseph Andrade: Yes.

Speaker #3: Yeah. And you know, it would be good if we can continue that practice because I believe that BAT is IGX-related and then on the DROC side we have the PPAC pricing. And you know, the blended realizations kind of make it a little difficult to model, especially you know, when DROC, in the next few quarters, will start scaling up. It will help us to model it a bit better, on how DROC will start contributing.

Mandeep Arora: Yeah. It would be good if we can continue that practice, because I believe that B-80 is IGX related, and on Dirok side, we have the PPAC pricing and the blended realizations kind of make it a little difficult to model, especially when Dirok will, in next few quarters, will start scaling up. It will help us to model it a bit better on how Dirok will start contributing. I mean, if we can continue that practice that you used to.

Speaker #3: So, I mean, if we can continue that practice that we used to.

Allen Joseph Andrade: Point well taken. We will, in our next presentation, make sure that we include the offshore and onshore realizations as well, so we can get an idea of what individual fields are realizing. Please remember that the B-80 gas which is produced is traded on the exchange, and we realize approximately about USD 15 to USD 16 per MMBtu, on that exchange. The other prices at Dirok and at PY1 are pegged at sometimes 10, sometimes 12. So it is a blend. That is why it is a little difficult to tell you what exactly is the thing, but we can certainly. We got that information. We can provide that without a problem.

Speaker #1: One one point, point well taken. Point well taken. We will, in our next presentation, make sure that we include the offshore and onshore realizations as well, so we can get an idea of what individual fields are realizing.

Speaker #1: But please remember that the Bati gas, which is produced, is traded on the exchange. And we realize approximately about $15 to $16 per MMBtu.

Speaker #1: On that exchange, the other prices that DROC are, DROC and at PY1, are pegged at sometimes 10, sometimes 12. So it is—it's a blend.

Speaker #1: That's why it's a little difficult to tell you exactly what is within. But we can certainly get that information, and we can provide that without a problem.

Speaker #3: Great, great. That was really helpful. Thank you.

Mandeep Arora: Great. That will be really helpful. Thank you.

Speaker #1: Yeah. Because because sorry just to add I mean it's we have a JV obligation to report these figures. So every joint venture has a quantitative information as well as as well as the sales information.

Allen Joseph Andrade: Yeah. Because, sorry, just to add, we have a JV obligation to report these figures. So every joint venture has quantitative information as well as sales information. So it is not difficult to pull that figure out. So we will make sure that all the investors are provided with that information as well.

Speaker #1: So, it's not difficult to pull that figure out. We will make sure that all the investors are provided with that information as well.

Speaker #3: Great, great, thank you. The other question was on the BAT synthesis and the monsoon time right now. Is the production still ongoing, or...?

Mandeep Arora: Great. Thank you. The other question was, on the B-80 synthesis monsoon time right now, is the production still ongoing or?

Speaker #1: Yeah. Production is ongoing. Yes. No, we're just ongoing. We have never had a day where we shut the production. Although we had to do some things related to asset integrity in the splash zone on one of the wells, we had very severe corrosion, etc.

Mandeep Arora: Yeah, production is ongoing as-

Baroruchi Mishra: Yeah, production is ongoing as-

Mandeep Arora: Monsoon. Yeah.

Baroruchi Mishra: No, it is ongoing. We have never had a day where we shut the production, although we had to do some work, things related to asset integrity in the splash zone on one of the wells. We had very severe corrosion, et cetera, which we had to figure out. One of the wells have a very high water cut. By itself, it would have produced very little. So we have reconfigured the compression, so from parallel, we have gotten them into series so that they can suck higher at a lower suction pressure. So the production continues, albeit that it is partial at this stage. Probably towards the end of the month, it should be completely 100%.

Speaker #1: which we had to figure out. And one of the wells has a very high water cut. And by itself, it should have produced very little.

Speaker #1: So we have reconfigured the compression. From parallel, we have moved them into series so that they can achieve higher suction at a lower suction pressure.

Speaker #1: So, the production continues, albeit it is partial at this stage. We believe towards the end of the month it should be completely at 100%.

Speaker #1: Just to add just to add I think you asked the question about the average price realization. If you I mean I hate to make you do this but if you want the the BAT realization on an average is 16.5 dollars an MB per MMB to you.

Baroruchi Mishra: Just to add, I think you asked the question about the average price realization. I hate to make you do this, but if you want, the B-80 realization on an average is $16.5 per MMBtu. The Dirok is $12.5. Okay? Compared with that-

Speaker #1: The DROC is 12 and a half. Okay. Compared with that.

Allen Joseph Andrade: Sorry, sir, again, 16.5 for B-80?

Speaker #3: Again 16.5 for BAT?

Speaker #1: Yeah, yeah, okay. And the DROC was 12.5.

Baroruchi Mishra: Yeah.

Baroruchi Mishra: Yeah, okay.

Mandeep Arora: Yeah, okay.

Baroruchi Mishra: The Dirok was 12.5.

Speaker #3: Okay, great. Great. Thank you. And sir, am I audible?

Allen Joseph Andrade: Okay, great. Thank you.

Mandeep Arora: Okay, great. Thank you.

Mandeep Arora: And, sir, am I audible?

Allen Joseph Andrade: And, sir, am I audible?

Speaker #1: Yeah. You are.

Baroruchi Mishra: Yeah, you are.

Speaker #3: Yes, yeah. So sir, on the DNPL side, just to understand what you described about NRL and the shutdown, can you explain the sequence of events from now on? Because this was also mentioned in the Oil India con call.

Baroruchi Mishra: Yes. Yeah. Sir, on the DNPL side, just to understand what you described about NRL and shutdown. The sequence of events from now on, because this was also mentioned in the Oil India's con call. I think DNPL is now a common carrier, but there is a 200-meter pipeline gap which needs to be done, where IGCL to connect IGCL and DNPL. And then once that is done, then we will go for the DNPL capacity augmentation, whatever the degradation has happened, we will do the hot tappings. And then, at the end of December, we expect that gas to flow from DNPL to IGCL. Is that the-

Allen Joseph Andrade: Yes. Yeah. Sir, on the DNPL side, just to understand what you described about NRL and shutdown. The sequence of events from now on, because this was also mentioned in the Oil India's con call. I think DNPL is now a common carrier, but there is a 200-meter pipeline gap which needs to be done, where IGCL to connect IGCL and DNPL. And then once that is done, then we will go for the DNPL capacity augmentation, whatever the degradation has happened, we will do the hot tappings. And then, at the end of December, we expect that gas to flow from DNPL to IGCL. Is that the-

Speaker #3: So I think DNPL is now a common carrier. But there is a 200-meter, you know, pipeline gap which needs to be done for IGTL to connect IGGL and DNPL.

Speaker #3: And then once that is done then we will go for the DNPL capacity augmentation whatever the you know degradation has happened we will do the hot tapping and then you know at the end of December you know we expect that gas to flow from DNPL to IGGL.

Speaker #3: Is that a correct?

Speaker #1: Yeah, so it is in parallel. Your point is well— I mean, you have made the right point. The only thing is, AGCL are working on it; there is no dependency on the hot tap. And at the NRL, there are 100 or 150 to 200 meters of pipeline which has to connect the DNDL to the gas grid inside NRL’s facilities.

Baroruchi Mishra: Yeah. It is in parallel. Your point is well taken. I mean, you have made the right point. The only thing is IGCL are working on. There is no dependency on the hot tap, and the NRL, there are 100 or 150, 200 meters of pipeline, which has to connect the DNPL to the gas grid inside NRL site.

Baroruchi Mishra: NRL's facilities, and that is not such a big thing. The main thing is this hot taps. They are continuing to work on the hot taps now, and at any suitable time, this 150 to 200 meters of pipeline will be laid inside NRL to connect DNPL line, which enters the gate of NRL to the exit where it connects with the Indradhanush Gas Grid. That shortcut bypassing NRL is in the gift of NRL to do it at any time. It should not be such a big problem. The big thing is some of these hot taps are in the middle of the fields, paddy fields, and they have water, et cetera, in them, which have all been planned now, and the awards are imminent, and the vendors have gone and seen, have submitted the procedures.

Speaker #1: And that is not such a big thing. The main thing is these hot taps. So they are continuing to work on the hot taps now.

Speaker #1: And at any suitable time, this 150 to 200 meters of pipeline will be laid inside NRL to connect the DNPL line, which enters the gate of NRL, to the exit where it connects with the IG—the internet, the gas grid.

Speaker #1: So, that shortcut bypassing NRL is at the discretion of NRL to implement at any time. It should not be such a big problem.

Speaker #1: The big thing is, some of these hot taps are in the middle of the fields, in paddy fields, and they have water, etc., in them.

Speaker #1: Which has all been now which have all been planned now. And the awards are imminent. And the vendors have gone and seen have submitted the procedures so that is the critical path if you will for start.

Baroruchi Mishra: That is the critical path, if you will, for start. And of course, this 200 meters of pipeline, as Oil India told you, is absolutely necessary. But that is within the premises of NRL. And as you can see, 200 meters line is not a very big thing.

Speaker #1: And of course, this 200 meters of pipeline, as Oil India told you, is absolutely necessary. But that is within the premises of NRL, and as you can see, a 200-meter line is not a very big thing.

Speaker #3: Yeah. Yeah. Thank you. And one last thing on the BAT, sir. You know, in the last investor call, we had asked about the storage that we have, already 118,000 on the SSO.

Mandeep Arora: Yeah. Thank you. And one last thing on the B-80, sir. In the last investor call, we had asked about the storage that we have already 1,18,000 on the FSO. You had mentioned that we can technically sell it, but there are demurrage charges that will come into picture, and therefore, we have to take that into account, if we want to sell what we have currently in our FSO now. And you also mentioned that we are looking at how we can do that. So is that still-

Speaker #3: Now, you had mentioned that we can technically sell it, but there are demurrage charges that will come into the picture, and therefore, you know, we have to take that into account.

Speaker #3: If you want to sell what we have currently in our SSO now—I mean, and you also mentioned that we are looking at how we can do that.

Speaker #3: So, is that still, you know?

Speaker #1: So in October, we'll sell. In October, we'll have sufficient volumes for a small tanker to be able to take it, and we'll be able to sell.

Baroruchi Mishra: In October, we will sell. In October, we will have sufficient volumes for a small tanker to be able to take it, and we will be able to sell. That would be around 120 to 130,000 barrels of crude we will be able to sell in October. Because if you have lower volumes and you send a large tanker, those tankers ask for demurrage charges, and there is some dead volume which remains. So it is not an optimal number. 120 to 150, we are looking at smaller tankers, and in October, as soon as the monsoon gets over, we will sell.

Speaker #1: That would be around 120,000 to 130,000 barrels of crude we'll be able to sell in October. Because if you have lower volumes and you send a large tanker, those tankers ask for demurrage charges, and there is some dead volume which remains, so it is not an optimal number.

Speaker #1: 120 to 150, we are looking at smaller tankers. And in October, as soon as the monsoon gets over, we'll sell.

Speaker #3: Okay. So, sir, let's say the oil price is $85.

Mandeep Arora: Okay. So, sir, if let's say the oil price is $85.

Speaker #2: Sorry to interrupt you, Manpreet. Maybe I can request you to interrupt.

Operator: Sorry to interrupt you, Mandeep. May I please request you to interrupt? Thank you.

Speaker #3: Thank you. Thank you.

Mandeep Arora: Sure. Thank you.

Speaker #2: Thank you. We have our next question from the line of Nishant Maheshwari, an individual investor. Please go ahead.

Operator: Thank you. We have our next question from the line of Nishant Maheshwari, an individual investor. Please go ahead.

Speaker #1: Hello. Am I audible, sir? Yeah, you are.

Nishant Maheshwari: Hello. Am I audible, sir?

Baroruchi Mishra: Yes, you are.

Speaker #3: Sir, we read something in the bill that there is a protest in Tamil Nadu regarding the drilling of two wells. That too is related to the area of allocation.

Nishant Maheshwari: Sir, we read something in, well, that there is a protest in Tamil Nadu regarding drilling of two wells. That, too, is related with the area of allocation. So can you brief us about this?

Speaker #3: So, can you brief us about this?

Speaker #1: Yeah. So look, these fields are all approved by the MOPNG. As a matter of good practice, we keep the state governments informed, but the final arbiter on the approval to drill, etc., is the MOPNG.

Baroruchi Mishra: Yeah. Look, these fields are all approved by the Ministry of Petroleum and Natural Gas. As a matter of good practice, we keep the state governments informed, but the final arbiter on the approval to drill, et cetera, is the central government, which we have for the entire field. There were indeed some protests around drilling these two wells, and we have taken up the matter with the state government, explained to them the way these environmental clearances work, and we have showed them all the approvals that we have, and we hope that it will not be such a big issue. Let me rest it there. But you are right, there was an article there. But essentially, as you will read anywhere, the approvals are from the central government. We keep the state government completely informed, though.

Speaker #1: is the central government, which we have for the entire field. So there were indeed some protests around drilling these two wells, and we have taken up the matter with the state government, explained to them the way these environmental clearances work.

Speaker #1: And we have showed them all the approvals that we have, and we hope that it will not be such a big issue.

Speaker #1: So let me rest it there. But you're right, there was an article there. But essentially, as you will read anywhere, the approvals are from the Central Government.

Speaker #1: We keep the state government completely informed, though.

Speaker #3: In the last con call, sir, you said that the realization of that SPCL crude was ongoing and the turnover might have been booked. But as of now, the same situation is canceled, and we are more or less confident on what we have stated in the last investor presentation—that we will be achieving 11,000 barrels per day from now to June 2027.

Nishant Maheshwari: In the last con call, sir, you said that the realization of that Hindustan Petroleum Corporation Limited route was ongoing and the turnover might have been booked. As on the date, the same situation is standstill and we are now less confident on what we have stated in the last investor presentation that we will be achieving 11,000 barrels per day from now to June 2027, and that's really now under a big risk. How we can trust it? Because from last three years, we are constantly seeing that the production will increase. As on date, the production has drastically reduced from 2024 level. Now, how we can trust that 11,000 barrels per day production will be there in this company?

Speaker #3: And that's really now under a big risk. I mean, how can we trust? Because for the last three years, we are constantly seeing that production will increase, production will increase, but as of date, the production has drastically reduced from 2024 level.

Speaker #3: That's now how we can trust that 11,000 barrels per day production will be there in this company.

Speaker #1: Because, you know, that point is well taken, and I understand your line of thinking on it. It has not been delivered so far, and one of the key reasons why there was a further delay was the stuck-up of our invoice in HPCL, which was a black swan event in many ways.

Baroruchi Mishra: That point is well taken, and I understand your line of thinking on it has not been delivered so far. One of the key reasons why there was a further delay was the stuck-up of our invoice in Hindustan Petroleum Corporation Limited, which was a black swan event in many ways, where INR 260 crores plus, if you add the interest, roughly INR 300 crores got stuck. Otherwise, the workovers would have been done in November of last year, and we should have been on track. We should have drilled these three wells to be able to get on production. That is the nature of the beast here. Globally, $400 billion are spent every year to keep the production plateau, not from declining, not from growing production. That, unfortunately, we could not do for various reasons. Now we are in the market to be able to raise funds to deliver that.

Speaker #1: Where ₹260 crores, plus if you add the interest, roughly ₹300 crores got stuck. Otherwise, the workovers would have been done in November of last year, and we should have been on track to drill—we should have drilled these three wells.

Speaker #1: To be able to get on production—that is the nature of the beast here. Globally, $400 billion are spent every year to keep the production plateau.

Speaker #1: Not from declining, not for growing production. That, unfortunately, we could not do for various reasons. Now we are in the market to be able to raise funds to deliver that.

Speaker #1: And again, there could be a challenge if we don't get the funds, but at least some part of it we are funding from our own accruals, so we are hopeful that we will be able to deliver.

Baroruchi Mishra: Again, that could be a challenge if we don't get the funds, but at least some part of it we are funding from our own accruals. So we are hopeful that we will be able to deliver. In the offshore, in reservoir, there are always uncertainties. So when I say 11,000, it could be 8,900, or it could be 13,000. But that's the range that we are looking at on the basis of the technical work that has been done on the reservoir and the prospectivity of this reservoir to produce these volumes. Yeah?

Speaker #1: In the offshore, in a reservoir, there are always uncertainties. So when I say 11,000, it could be 8,900, or it could be 13,000.

Speaker #1: But that's the range that we are looking at on the basis of the technical work that has been done on the reservoir and the prospectivity of this reservoir to produce these volumes.

Speaker #1: Yeah.

Speaker #3: Are we looking into the Samudra Monsoon scheme and getting some expenses to be, I mean, borne by the Government of India?

Nishant Maheshwari: Are we looking into Samudra Manthan scheme and get some expenses to be borne by the Government of India?

Speaker #1: So those are for deep water. Samudra Monsoon is essentially for deep water, as far as I understand. And we are for shallow water.

Baroruchi Mishra: Those are for deep water. Samudra Manthan is essentially for deep water as far as I understand, and we are in shallow water. So right now, the eligibility for us to get some support, we are still in the process of evaluation. But you are right. This is a huge flip for the oil and gas sector in the country. Whether it supports shallow water drilling, that is something that we still have to understand.

Speaker #1: So, right now, the eligibility for us to get some support—we are still in the process of evaluation. But you're right, this is a huge flip for the oil and gas sector in the country.

Speaker #1: Whether it's support for shallow water drilling, that is something that we still have to understand.

Speaker #3: Have we started selling crude to HPCL, or...

Nishant Maheshwari: Have we started selling crude oil of HPCL or

Speaker #2: Sorry to interrupt you, Nishant. Maybe I can request you to rejoin with us.

Operator: Sorry to interrupt you, Nishant. May we request you to rejoin the queue?

Speaker #3: Sure. Sure. Sure. Sure. It can be addressed.

Nishant Maheshwari: Sure.

Operator: Thank you.

Nishant Maheshwari: It can be addressed, please.

Speaker #1: Yes. We have.

Baroruchi Mishra: Yes, we have.

Speaker #3: Okay. Thank you.

Nishant Maheshwari: Okay. Thank you.

Speaker #2: Thank you, gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit yourself to only two questions per participant.

Operator: Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit yourself to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. Next question is from the line of Nirbhay Mahawar from N Square Capital. Please go ahead.

Speaker #2: Should you have any follow-up questions, we request you to rejoin with us. Next question is from the line of Nirbhay Mahawar from N Square Capital.

Speaker #2: Please go ahead.

Speaker #3: Yeah, thanks for the opportunity. I just wanted to know, when do we see our cash flow being sufficient for our capex commitments? Because you mentioned that, due to the delay from HPCL, we have delayed our capex.

Nirbhay Mahawar: Yeah. Thanks for the opportunity, sir. Just wanted to know, when do we see our cash flow sufficient for our CapEx commitment? You have mentioned that because of the delay from HPCL, we have delayed our CapEx. With whatever operating improvement we are expecting, when do we see our CapEx from internal accruals?

Speaker #3: So with whatever operating improvement we're expecting, when do we see our capex from internal approval?

Speaker #1: So, for delivering the BAT program, we will have to rely on debt, and we are in the process of raising debt. By Q4, that is by November-December of next year, 2027, our cash flows will be sufficient to fund our growth for B15.

Baroruchi Mishra: For delivering B-80 program, we will have to rely on debt, and we are in the process of raising debt. By November, December of next year, 2027, our cash flows will be sufficient to fund our growth for B-15, and if we get awarded another block, then from point forward, we will have to take a call. For now, we have to raise debt in the market, to be able to fund our B-80 program of three wells and two workovers, and then the pipeline, et cetera.

Speaker #1: And if we get awarded another block, then from that point forward, we'll have to take a call. But for now, we have to raise debt in the market to be able to fund our BAT program of three wells and two workovers.

Speaker #1: And then the pipeline etc.

Speaker #3: So, what is the net debt right now—or net cash, whichever number it is?

Nirbhay Mahawar: What is the net debt right now? Or net cash, whatever number is.

Speaker #1: Our gearing is very low at this stage; it is 0.04. We have some debt on the books. Alan, would you like to quickly talk about that?

Baroruchi Mishra: Our gearing is very low at this stage. It is 0.04. We have some debt on the books. Alan, would you like to quickly talk about that?

Speaker #3: Yeah. We have a ₹20 crore loan from the bank; that is another follow-up on DNPL, sir. Is there any quantity cap in terms of common carrier being a common carrier, or can it take us?

Allen Joseph Andrade: Yeah. We have a 20 crore loan from the bank. That is it.

Nirbhay Mahawar: Another follow-up on DNPL, sir. Is there any quantity cap in terms of it being a common carrier or it can take us?

Speaker #1: So the quantity—the quantity cap—is not related to it being a common carrier. It is related to the asset integrity of the maximum pressure containment capability of that line.

Baroruchi Mishra: The quantity cap is not related to it being a common carrier. It is related to the asset integrity of the maximum pressure containment capability of that line, which is 90 bars. At 90 bars, it can produce 2.5 MMSCMD, and that is the capacity of the pipeline. If you do hydraulics and you have sufficient residual strength, you could go in slightly more. Right now, because the line is degraded, they are operating it in the range of 40 to 50 bars. Allow me to tell you how much is it exactly. Therefore, the line capacity has come down to 1 to 1.2 or 1.3 million standard cubic meters.

Speaker #1: Which is 90 bar. So at 90 bars it can produce 2.5 SCM per day at 2.5 SCM per day. And that is the capacity of the pipeline.

Speaker #1: If you do hydraulics and you have sufficient residual strength, you could go slightly more. Right now, because the line is degraded, they are operating it in the range of 40 to 50 bars.

Speaker #1: Allow me to tell you how much it is exactly. Therefore, the line capacity has come down to 1 to 1.2 or 1.3 million standard cubic meters.

Speaker #1: But as soon as the degraded sections are isolated and newly laid sections are connected back, then the entire asset integrity of the pipeline would be restored, and they should be able to then operate the facility at 90 bar.

Baroruchi Mishra: But as soon as the degraded sections are isolated and new laid sections are connected back, then the entire asset integrity of the pipeline would be restored, and they should be able to then operate the facility at 90 bar, the pipeline at 90 bar, which will take the capacity to 2.5 million standard cubic meters per day.

Speaker #1: The pipeline at 90 bar, which will take the capacity to 2.5 million standard cubic meters per day.

Speaker #3: Okay. So, would it be fair that...

Nirbhay Mahawar: So would it be fair that

Speaker #2: Sorry to interrupt. I request you to rejoin the queue.

Operator: Sorry to interrupt you, Nirbhay. May we request you to rejoin the queue?

Speaker #3: Fair. Yeah. Thanks.

Nirbhay Mahawar: Sure. Thanks.

Speaker #2: Thank you. Ladies and gentlemen, please limit yourselves to only two questions per participant. Should you have a follow-up question, we request that you rejoin the queue.

Operator: Thank you. Ladies and gentlemen, please limit yourself to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. Next question is from the line of Anubhav Goel from Kosmos Ventures. Please go ahead. Anubhav, are you there?

Speaker #2: Next question is from the line of Anubhav Goel from Cosmo Ventures. Please go ahead. Anubhav, are you there? Anubhav, are you there?

Speaker #1: Yeah. Hi, team. So just one question: For Q4, realistically, given the funding crunch, how firm is our plan for drilling wells in Kharsand and TY1?

Anubhav Goel: Hello?

Operator: Anubhav, are you there?

Anubhav Goel: Hello?

Operator: Anubhav, are you there?

Anubhav Goel: Yeah. Hi, team. Just one question for Q4. Realistically, given the funding crunch, how firm is our plan for drilling wells in Kharsang and PY1? My question largely is which field will take priority. Is it B-80? Because there could be some chance we do not drill any new well, especially if the workovers do not give us the output we are aiming for in Q3.

Speaker #1: My question, largely, is: which field will take priority? Is it BAT? Because, you know, there could be some chance we don't drill any new well, especially if the workovers don't give us the output we are aiming for in the third quarter.

Speaker #1: So, priority-wise, Kharsand is paying for itself, so that's not such a big thing. PY-1, the regular intervention that we are doing, we are paying from our own books.

Baroruchi Mishra: Priority-wise, Kharsang is paying for itself, so that is not such a big thing. At PY1, the rigorous intervention that we are doing, we are paying from our own books, so that is not also a big issue. B-80 is dependent upon the debt that we raised from the market. You are absolutely right, we would drill the first well, test it, understand the deliverability, then go to the second well, and then to the third. Right now, through the reservoir simulation works, we have found that all of these three are very feasible to drill with production in the range of 1,000 to 1,500 barrels per well.

Speaker #1: So that's also not a big, big issue. BAT is dependent upon the debt that we raised from the market. And you are absolutely right.

Speaker #1: We would drill the first well, test it, and understand the deliverability. Then go to the second well, and then to the third. Right now, through the reservoir simulation work, we have that all of these three are very feasible to drill, with production in the range of 1,000 to 1,500 barrels per well.

Speaker #1: With that said, we will continue to do the logging, and logging is the surest, surest way of understanding what is the oil and gas situation in the individual state of the reservoir.

Baroruchi Mishra: With that said, we will continue to do the logging, and logging is the surest way of understanding what is the oil and gas saturation in individual strata of the reservoir, and then how should we tweak our next well trajectory to be able to target the sweet spots. That is a work that we continue to do. No drilling campaign is ever started with a self-doubt in the mind that we will not be able to complete. We will only start the drilling campaign once we have a level of confidence that the results would be there. Or we believe that if you are plotting 1,000, it could be 700 or it could be 1,400. That is something that will always be there, Sunil, because we are talking about stuff which is 4 kilometers below the main mud line.

Speaker #1: And then, how should we tweak our next well trajectory to be able to target the sweet spots? But that is a work that we continue to do.

Speaker #1: No drilling campaign is ever started with self-doubt in the mind that we will not be able to complete it. We will only start the drilling campaign once we have a level of confidence that the results will be there, or that if you're plugging 1,000, it could be 700 or it could be 1,400.

Speaker #1: So that's something that will always be there, because we are talking about stuff which is 400 kilometers or 4 kilometers below the minimum mud line.

Speaker #1: So that uncertainty will remain, but going by the reservoir models that we have, we believe we have infill locations for three wells that we'll need to drill.

Baroruchi Mishra: So that uncertainty will remain, but going by the reservoir models that we have, we believe we have infill locations for three wells that we will need to drill. These are development wells.

Speaker #1: These are development wells.

Speaker #3: So sir, for Kharsand I understand. But for PY1, since the amount would be high, it would be fair to say, like, if we don't get the results we want by the third quarter, then we might just push up the deadline on that to be conservative.

Anubhav Goel: So, sir, for Kharsang, I understand, but for PY1, since the amount would be high, it would be fair to say, if we do not get the results we want by Q3, then we might just push up the deadline on that to be conservative.

Speaker #1: No. So for PY-1, the dependency is the gas sales agreement. If we have buyers for the gas only, then we will drill the two new wells.

Baroruchi Mishra: No. So PY1, the dependency is the gas sales agreement. If we have buyers for the gas, only then we will drill the two new wells, because we have burnt our fingers. If you remember, 15 years ago, these wells came on with 50 million standard cubic feet per day production. Not heard of from three wells in most of Bombay Offshore also. But we got that, and then we were done in by lack of buyers, and we had to keep these wells shut, and the water overwhelmed the gas wells because there is a basement reservoir. And then we had to reprocess, and we had to get PetroVietnam to analyze it. And they have said that we still can make 15 to 20 million standard cubic feet per day from two new wells, but we will drill those only after we have the firm gas sales agreement.

Speaker #1: Because we have burnt our fingers—if you remember, 15 years ago these wells came on with 50 million standard cubic feet per day production.

Speaker #1: Not heard of from three wells in most of Bombay Offshore also. But we got that, and then we were done in by lack of buyers and had to keep these wells shut.

Speaker #1: And the water overwhelmed the gas zones because there's a basement reservoir, and then we had to reprocess, and we had to get PetroVietnam to analyze it.

Speaker #1: And they have said that we still can make 15 to 20 million standard cubic feet per day from two new wells. But we'll drill those only after we have the firm gas sales agreement.

Speaker #1: But in the meantime, we are doing a reckless intervention to increase production from the existing wells. And that would be in the short term, which will be funded from our books.

Baroruchi Mishra: But in the meantime, we are doing a rigorous intervention to increase production from the existing wells. And that would be in the short term, which will be funded from our books.

Speaker #3: And, sir, post-December for the—

Anubhav Goel: And sir, post December for the-

Speaker #2: Sorry to interrupt, Anubhav. Thank you.

Operator: Sorry to interrupt you, Anubhav. May I please request you to conclude? Thank you.

Speaker #3: Just my last question. So for the DROC offtake post-December, is it like once the pipeline is completed, then we will spend some time forming contracts with buyers, or can we expect a quick ramp-up?

Anubhav Goel: Just my last question. Sir, for the Dirok offtake post December, is it like once the pipeline is completed, then we will spend some time forming contracts with buyers, or can we expect a quick ramp-up?

Speaker #1: So, then NRL has also been made a reseller, and the DNPL pipeline has been made a common carrier. So, technically speaking, therefore, NRL can take our gas and sell it on the exchange, like we are doing in the Bombay offshore.

Baroruchi Mishra: NRL has also been made a reseller, and the DNPL pipeline has been made a common carrier. Technically speaking, therefore, NRL can take our gas and sell it on the exchange like we are doing in the B-80 field where we are selling gas on the exchange. It could be done in three days' time. We do not have to have a firm buyer if we are going to the exchange. The route, a critical or a credible technical path to the national gas grid is all that is needed for us to monetize the reserves. Then we could have intermediate buyers who can charge a marketing margin. Even so, we will be able to sell on the exchange without much hassles.

Speaker #1: In the BAD field, where we are selling gas on the exchange, it could be done in three days' time. We don't have to have a firm buyer.

Speaker #1: If we are going to the exchange, the route—a critical or a credible technical path to the gas exchange, to the national gas grid—is all that is needed for us to monetize the reserves.

Speaker #1: And then we could have intermediate buyers who can charge a marketing margin, but even so, we will be able to sell on the exchange without much hassle.

Speaker #3: Got it, sir. Best of luck. I'll get back in the queue.

Anubhav Goel: Got it, sir. Best of luck. I will get back in touch with you.

Speaker #1: Thank you.

Speaker #2: Thank you. We have our next question from the line of Manan Patil, an individual investor. Please go ahead.

Baroruchi Mishra: Thank you.

Operator: Thank you. We have our next question from the line of Manan Patel, an individual investor. Please go ahead.

Speaker #4: Thank you for the opportunity, sir. The first question is on DROC. DNPL has been made a common carrier, but it's only at 25% of that capacity.

Manan Patel: Thank you for the opportunity, sir. Sir, the first question is on Dirok. DNPL had been made a common carrier, but it is only 25% of that capacity. I want to understand who are the other players we will be competing with for that capacity? Once that is online, how much production can we ramp up due to this capacity constraint?

Speaker #4: So, I want to understand who all the other players are that will be competing for that capacity, and once that is online, how much production can be ramped up due to this capacity constraint.

Speaker #1: So I will not be able.

Baroruchi Mishra: Sir, I will not be able to give you a complete answer on what is the locked-in volumes of other operators. Our locked-in volumes are 0.6 to 0.7, sometimes 0.5 million standard cubic meters on a gross basis, which we should be able to ramp up. The capacity will be more than doubled from the current 1.1.1 or whatever is that number, to 2.5. Technically, 50 million to 60 million standard cubic feet can flow additional in that pipeline. We will have to see. As far as we understand from the discussions that we have had, we should be able to sell all our wellstock gas once the pipeline capacity is brought online.

Speaker #3: To give you a complete answer on what the locked-in volumes of other operators are: our locked-in volumes are 0.6 to 0.7, sometimes 0.5, million standard cubic meters on a gross basis.

Speaker #3: Which we should be able to ramp up. The capacity will be more than doubled, from the current 1.1—1.1 or whatever that number is—to 2.5.

Speaker #3: So technically, 50 million to 60 million standard cubic feet can flow additionally in that pipeline. So, we'll have to see. But as far as we understand from the discussions that we have had, we should be able to sell all our well stock gas once the pipeline capacity is brought online.

Speaker #4: And that should happen by Q4.

Manan Patel: That should happen by Q4?

Speaker #3: Q4 is what—January to, yeah, December end is what is our target. But we'll see; there are some things controllable, there are some things not controllable.

Baroruchi Mishra: Q4 is what? January to December End is what is our target. We will see there are some things controllable, there are some things not controllable. Even the uncontrollable ones, we are continuously talking. AGCL, we are continuously in dialogue with them for hot taps, et cetera. We are trying to do our best. Hopefully by December we should be on it.

Speaker #3: But even the uncontrollable ones—we are continuously talking, so AGCL, we are continuously in dialogue with them for hot taps, etc. So we're trying to do our best.

Speaker #3: Hopefully, by December we should be on it.

Speaker #4: Got it. And sir second question is on BAT. So work over we're planning to do in October once the monsoon stops. So how long does a work over of the well take and what kind of production ramp up can we expect from each well after the after that work over happens?

Manan Patel: Got it. Sir, second question is on B-80. Work over, we are planning to do in October once the monsoon stops. How long does a work over of the well take, and what kind of production ramp-up can we expect from each well after that work over happens?

Speaker #1: Roughly 10 to 15 days, up to 20 days, if we got a pipe stuck in or some fish in the well, etc. There are some problems, so 10 to 20 days is the standard time for a workover.

Baroruchi Mishra: Roughly 10 to 15 days to 20 days if we got a pipe stuck in or some fish in the well, et cetera. There are some problems. So 10 to 20 days is a standard time for a work over. We are looking at 500 to 800 barrels per well, and 3 to 4 to 5 million scuffs per day from these wells. So that's the range that we are talking about.

Speaker #1: We are looking at 500 to 800 barrels per well, and 3 to 5 million scuffs per day from these wells. So, that's the range that we are talking about.

Speaker #4: Got it, sir. Thank you, and wish you all the best.

Manan Patel: Got it, sir. Thank you, and wish you all the best.

Speaker #3: Thank you.

Speaker #2: Thank you. We have a follow-up question from Ritesh Gandhi from Discover Capital. Please go ahead.

Baroruchi Mishra: Thank you.

Operator: Thank you. We have a follow-up question from the line of Riddhesh Gandhi from Discovery Capital. Please go ahead.

Speaker #3: I sir you know just want to understand that you know what our understanding was from the from the the last call that you all had explaining the HPCL situation.

Riddhesh Gandhi: Sir, just want to understand that, what our understanding was from the last call that you all had explaining the Hindustan Petroleum Corporation Limited situation was that because you all were getting a similar price and there was not going to be too much of a loss, you had gone ahead with the resale. Now, if you're indicating that there is a 10%, 15% loss because the price of the Brent has been reduced and our agreement is strong enough with Hindustan Petroleum Corporation Limited that is taken on and as a well basis, then why aren't we then passing on the liability onto Hindustan Petroleum Corporation Limited?

Speaker #3: Was that because you all were getting a similar price, and there was not going to be too much of a loss, so you went ahead with a resale?

Speaker #3: Now, if you're indicating that there is a 10–15% loss because the price of a print hasn't reduced, and our agreement is strong enough with HPCL that it is taken on an as-is, where-is basis.

Speaker #3: Then why aren't we passing on this as a liability to HPCL?

Speaker #1: Oh, okay. So how do I say this? We already have an agreement signed where we have reversed the sale, and HPCL has been very cooperative.

Baroruchi Mishra: Okay. We have an agreement already signed where we have reversed the sale, and Hindustan Petroleum Corporation Limited has been very cooperative. They have kept the crude, and we are continuously working with them. We have created additional gantries for offloading the crude. There is a very collaborative atmosphere. We would like to preserve it and keep it that way rather than having double-barrel guns at each other and then fighting. Of course, there will be a conciliation process, but we want it to be very cordial and amicable because they are long-term partners. We are a producer, and they are a consumer, so why not?

Speaker #1: They have kept the crude, and we are continuously working with them. We have created additional gantries for offtaking the crude. So, there is a very collaborative atmosphere.

Speaker #1: I don't, and we would like to preserve it and keep it that way, rather than having double-barrel guns at each other and fighting.

Speaker #1: Of course, there would be a conciliation process, but we want it to be very cordial and amicable because they are long-term partners. And we are a producer and they are a consumer.

Speaker #1: So why not?

Speaker #3: But at the end of the day, it is a commodity, right? So, I mean, if HPCL isn't going to take it, someone else will take it.

Riddhesh Gandhi: But at the end of the day, it is a commodity, right? I mean, if Hindustan Petroleum Corporation Limited isn't going to take it, someone else will take it. It is oil at the end of the day. So if they are-

Speaker #3: It's—it is oil at the end of the day. So if they are on an agreement that we have, why wouldn't we just sort of—I mean, as long as there was, as long as there was actually, like, no loss, then it was okay, right? Because the print has run up materially.

Baroruchi Mishra: No, no. We are selling it to them.

Riddhesh Gandhi: reneging on the agreement that we have, why wouldn't we just sort of, I mean, as long as there was actually no loss, then it was okay, right, because the Brent has run up materially. Now we are saying that if Brent goes down, we are taking exposure, et cetera. Shouldn't that be effectively an any risk portfolio? Even, I mean, they have accepted the oil. They have probably tested the oil. So effectively, them being cooperative and sort of holding the oil should not really be, I mean, could be a basic expectation, right? Given it is

Speaker #3: Now we are saying that if print goes down, we're taking exposure, etc. Shouldn't that be effectively—and any shortfall—even, I mean, they have accepted the oil, right?

Speaker #3: They have probably tested the oil, right? And so, effectively, them being cooperative and sort of holding the oil should not really be—I mean, we have a basic expectation, right, given it is—take your point.

Baroruchi Mishra: Yeah. No, I take your point.

Riddhesh Gandhi: their portion of oil.

Speaker #1: I wish it were that easy, and you were our lawyer. But it doesn't work that way. We have had a situation where we agreed on a way forward, and as far as a responsible corporate like HOEC is concerned, we will not renege on whatever we have agreed to.

Baroruchi Mishra: I wish it were to be that easy, and you were our lawyer, but it doesn't work that way. We have had a situation where we have agreed on a way forward. As far as a responsible corporate like HOEC is concerned, we will not renege on whatever we have agreed with. Going forward, the matter would be in the conciliation. The High Court chief justice has been appointed, and we are hoping that it would be an amicable conciliation process, and then we will move on. We will sell the crude, and we will move on. Your points are taken. These things have crossed our minds also and others' minds also. But where we are now is an agreed position to off take our crude, and we are not doing anything different.

Speaker #1: But going forward, the matter would be in the conciliation, where the High Court Chief Justice has been appointed, and we are hoping that it will be an amicable conciliation process, and then we'll move on.

Speaker #1: We'll sell the crude and we'll move on. But your points are taken. These things have crossed our minds also, and others' minds as well. But where we are now is an agreed position to offtake our crude, and we are not doing anything different.

Speaker #3: Okay. All right. Thanks. That's awesome. Thank you.

Riddhesh Gandhi: Okay. All right. Thanks. That is all from me. Thank you.

Speaker #1: Thank you.

Speaker #2: Thank you. We have a follow-up question from the line of Nirbhay Mahavar from N Square Capital. Please go ahead. Nirbhay, are you there?

Baroruchi Mishra: Thank you.

Operator: Thank you. We have a follow-up question from the line of Nirbhay Mahawar from N Square Capital. Please go ahead. Nirbhay, are you there?

Speaker #5: Yeah. Hello. Yeah, I'm there. On Kharsang gas evacuation, how fast can it happen, sir? How much time would it take?

Nirbhay Mahawar: Yeah. Hello. Yeah, I am there. On Kharsang gas evacuation, how fast it can happen, sir? How much time would it take?

Speaker #1: Good question. So, we have to lay a 24-kilometer pipeline to tie into the Oil India pipeline, which has already been laid.

Baroruchi Mishra: Good question. We have to lay a 24-kilometer pipeline to key into the Oil India pipeline, which has already been laid. That pipeline, 24 kilometers, we have started the route. I mean, the tender for the route survey will close tomorrow, and then we will appoint a route survey agency. They will do the route. They will come up with all the requirements of the right of way there, and then we will apply to the agencies for the right of way. All going well, we believe in six to eight months, we should be able to get the right of way. If we get the right of use for the way, for the pipeline route, then it is another six to eight months. It is just a 24-kilometer pipeline to lay.

Speaker #1: That pipeline is 24 kilometers. We have started the route—I mean, the tender for the route survey will close tomorrow, and then we'll appoint a route survey agency.

Speaker #1: They will do the route. They will come up with all the requirements for the right of way there, and then we'll apply to the agencies for the right of way.

Speaker #1: All going well, we believe in six to eight months we should be able to get the right of way. And if we get the right of use for the way for the pipeline route, then it is another six to eight months.

Speaker #1: It's just a 24 kilometer pipeline to lay. And if it were to be an ideal situation we would believe that by the end of next year December next year the pipeline could be completed.

Baroruchi Mishra: If it were to be an ideal situation, we would believe that by the end of next year, December next year, the pipeline could be completed. But we are where we are. Oil India has already laid a pipeline from Kumchai field to Bordumsa, and we have to tie into that pipeline at Bordumsa, which will then connect us all the way up to NRL and then to the national gas grid. That, given the difficult terrain and the forest areas through which it will pass along the highway and below a riverine, et cetera, we believe 14 to 18 months is the time it will take to lay that.

Speaker #1: But we are where we are. Oil India has already laid a pipeline from Kumchai fields to Borodumsa, and we have to tie into that pipeline at Borodumsa, which will then connect us all the way up to an RL, and then to the national gas grid.

Speaker #1: So that given the difficult terrain and the forest areas through which it will pass along the highway and below a riverine etc. We believe 18 months 14 to 18 months is the time it will take to lay that.

Speaker #5: Sir, post our Dirok ramp-up, would it be fair to assume that all cash flow constraints will be over? Which you are expecting by the end of the financial year at least.

Nirbhay Mahawar: Sir, post our Dirok ramp-up, would it be fair to assume that all cash flow constraints will be over, which you are expecting by the end of financial year, at least?

Speaker #1: So, we have, I mean, cash flow constraints depending upon what your work program and budget are. If you're wanting to draw more, you definitely need more cash.

Baroruchi Mishra: We have cash flow constraints, depending upon what is your work program and budget. If you are wanting to do more, you definitely need more cash. We are not resting after B-80, we will immediately go to B-15. I am not saying it is a constraint in the sense that it will prevent us from delivering what we want to do. It will help, but Dirok will definitely buoy up the balance sheet of the company if we are able to produce all the molecules that are currently locked in in the wells. But your point is right. We will definitely have a better cash flow situation if Dirok is completely on stream.

Speaker #1: And we are not resting after the 80; we'll immediately go to B15. So I'm not saying it's a constraint in the sense that it will prevent us from delivering what we want to do.

Speaker #1: It will help, but Dirok will definitely buoy up the balance sheet of the company if we are able to produce all the molecules that are currently locked in the wells.

Speaker #1: But your point is right. We will definitely have a better cash flow situation if Dirok is completely on stream.

Speaker #5: Okay. Thank you.

Nirbhay Mahawar: Yeah. Thank you.

Speaker #2: Thank you. Ladies and gentlemen, that was the last question of the day and I now hand the conference over to the management for closing comments.

Operator: Thank you. Ladies and gentlemen, that was the last question of the day, and I now hand the conference over to the management for closing comments.

Speaker #1: Thank you. I am very delighted by the interest our esteemed shareholders have in the prospects of the company, how it is doing, and what the future holds.

Baroruchi Mishra: Thank you. I am very delighted by the interest that our esteemed shareholders have about the prospects of the company and how it is doing and what is the future. That keeps me honest. That keeps us very sharp, and we have a burden that we carry, which is to be responsible to you and to be able to do everything that we can to be able to create wealth for yourselves. In the process, help the energy security of the country, and to grow HOEC to new heights. Thank you very much for your very active participation, and we stay in hot standby to support you with any queries that you might have. Thank you for that, and we are very happy to interact again next quarter where we might have some better stories to say or some new stories to say.

Speaker #1: That keeps me honest, that keeps us very sharp, and we have a burden that we carry, which is to be responsible to you and to be able to do everything that we can.

Speaker #1: To be able to create wealth for yourselves, and in the process, help the energy integrity and energy security of the country, and grow HOEC to new heights.

Speaker #1: So, thank you very much for your very active participation. We remain on hot standby to support you with any queries that you might have.

Speaker #1: So thank you for that, and I'm very happy to interact again next quarter, where we might have some better stories to share or some new stories to tell—better meaning new stories to say.

Baroruchi Mishra: Better meaning new stories to say. Let me stop there. Thank you.

Speaker #1: Let me stop here. Thank you.

Speaker #2: Thank you very much sir. On behalf of Hindustan Oil Exploration Company Limited that concludes the conference. Thank you for joining us and you may now disconnect your line.

Operator: Thank you very much, sir. On behalf of Hindustan Oil Exploration Company Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your line.

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Q1 2027 Hindustan Oil Exploration Company Ltd Earnings Call

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