Hindustan Oil Exploration Company Limited (500186) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q2 FY '24 Earnings Conference Call of Hindustan Oil Exploration Company Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you. And over to you, Mr. Sonpal.

Thank you, Michelle. Good morning, everybody, and a very warm welcome to you all; also wish you a very happy Diwali. My name is Anuj Sonpal from Valorem Advisors. We represent the investor relations of HOEC Limited. On behalf of the company, I'd like to thank you all for participating in the company's earnings call for the second quarter and first half of financial year 2024. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We, firstly, have with us Mr. R. Jeevanandam, Managing Director; Mr. Krishnan Raghavan, Chief Technical Officer. Now without any further delay, I request Mr. Jeevanandam to start with his opening remarks. Thank you. And over to you, sir.

Okay. Thank you, Anuj. Good morning. Wishing you a very happy Diwali. Hope everyone has received the updated earnings presentation. It is on our website for your reference. I have with me Mr. Krishnan Raghavan, Chief Technical Officer, heading the operations and subsurface team. We will be strengthening our team by inducting a CFO, Senior Production Engineers, Senior Drilling Managers and Technical Advisers to increase the operating and managerial capability of the company. Some of the technical persons have already joined, and others will also join shortly. We are pleased to inform you that quarter 2 gas offtake from Dirok has increased to an average of 23 million standard cubic feet per day from 10 million standard cubic feet per day in the previous quarter. I'll start with the operational update from the Eastern region. Dirok gas sale is 0.56 Bcf and condensate is 10,350 barrels compared to 0.24 Bcf of gas and 4,573 barrels of condensate in the previous quarter. Though, this field can produce about 50 million standard cubic feet a day, we have to restrict the production due to lack of demand and the volatility in offtake due to breakdown of planned maintenance of major consumers. This is further compounded by dual pricing for gas produced from the nominated fields of Oil India Limited and private players. The ceiling price fixed by the Government of India for nominated field is $6.5 per MMBtu. Whereas for private players and for non-nominated fields, the price fixed by PPAC is $9.2 per MMBtu as on October '23. Therefore, the customers who are mostly public sector undertakings would like to avail the low-price gas of $6.5 per MMBtu before availing the gas from private players at a higher price. This has caused a lower offtake of Dirok gas. And the situation would get reversed once the gas line of IGGL, GAIL and DNPL are connected and commissioned. We believe that this gets completed, latest, by first quarter of '24-'25. When IGGL lays its own line from Duliajan to Numaligarh, which is about 180 kilometers, the demand constraint will further be eased out, and the connectivity within the gas grid in Central India will be -- by the time it will be -- get fully established. This will ensure an increased and stabilized offtake from 2025 onwards. In order to keep ourselves prepared and to ramp up production, 3 legacy wells, Dirok-1, Dirok-2 and Dirok-4, will be worked over to enhance the production as well as to get additional data. This program is expected to start in the fourth quarter of this financial year. I'm happy to inform that the reprocessed seismic data is quite encouraging and the material balance in the field would be higher than expected. In-house G&G study is in progress, which will get validated by third-party reserve auditors, and the new reserve numbers will be updated as soon as the study is completed. Data from workover results would also include the production data to reestimate the potential of a block. After these workovers, we plan for drilling 2 additional producers to ramp up, up to 70 million standard cubic feet per day, subject to the growth of demand and connectivity to national gas grid. As informed earlier, the balance 50% share capital of GeoEnpro is transferred and is now a wholly owned subsidiary of HOEC. GeoEnpro is the operator to Kharsang block, and HOEC will have both directly and indirectly 35% participating interest in the block. There are 70 wells drilled in the block, out of which 28 wells are on production, 9 are gas wells, 4 exploration wells were abandoned. The wells were drilled and produced from upper Girujan formations. New wells were drilled and tested to know the potential of deeper formations such as lower Girujan, Tipam and Barail. This block is producing from upper Girujan formation for over 40 years. Current production is about 432 barrels against the 350 barrels in the previous 6 months average. This was possible after some [ acid ] jobs and workover in some wells. We have an approved work program already exists for drilling 6 wells to the depth of about 1,500 meters to target additional production from upper Girujan. Tangibles required such as wellheads, X-mas trees and tubulars were already procured. On obtaining EC clearance, which is expected by end December '23, we should be drilling in 6 wells, which should increase the production to about 1,000 barrels per day. Substantial upside has been identified and evaluated by GCA both in the lower Girujan, Tipam and Barail formations. While drilling 6 development wells, we will finalize an appraisal program for deeper formations by drilling a well to the depth of 3,000 meters by obtaining consent from JV partners. The deeper formations are expected to be gas and on discovery, monetizing gas will not be difficult. We believe, by the time, eastern regional pipelines will get connected to the national gas grid. Block 19 exploration block, called Greater Dirok, where seismic reprocessing is completed, our team will release the geotechnical order before this month end. GTO of the exploration well will be evaluated and [ risked ] before the commencement of drilling. This block is located between Dirok and Kharsang, which is 100% owned by HOEC. We have work program lined up for drilling 6 development wells and 1 exploration well in Kharsang and 1 more exploration well in Block 19; in addition, planned for intervention of 2 wells per workover in '24-'25. We also planned for 2 development wells in Dirok and 1 appraisal in Kharsang in '25-'26. The expected capital outlay for the next 2 financial year is about 200 crores. Now I'll move to Cambay blocks. In Cambay, all the 3 blocks are having marginal production. And total contract area is about 38 square kilometers, with 34 drilled wells; and the data is available. In-house G&G and the reservoir's team is evaluating the potential of all the 3 blocks to enhance the production. Currently these fields are breaking even with a meager contribution to the P&L account. In Palej, plan to have artificial lifts in all 3 wells, and the required SRPs are being sourced. After seeing the results and on signing the PSC for R2 contract area, we intend to have 3D seismic acquisition and drilling of additional wells. In North Balol, we are producing from 2 wells, and one well drilled by ONGC and one by HOEC. We plan to drill additional 2 producers immediately after getting the environmental clearance. Similarly, to drill, 2 producers in Asjol. And the number of wells will increase based on the drilling results. Now I move to offshore blocks. In B-80, we have removed the wax deposition in the export line and restarted the production from D2 well. Production from this field is only for 1.5 months in this quarter. D2 well production is a little over 1,000 barrels per day, and the gas is about 5 million standard cubic feet per day. D1 well was producing before the cyclone and was shut in during the cyclone. Post cyclone and post clearance of the wax, we were trying to open the well for production, but it could not be activated. It is believed there could be some mechanical obstruction which needs to be removed. We have engaged with Baker Hughes to study the issue and come out with a solution. Baker Hughes have commenced the study, and based on the recommendations, we will do the remedial actions to restart the production from D1 well. Under-buoy hoses have been received and are in stock. Replacement work will begin after securing a [ DSV ] for this job. We endeavor to carry out this work before the onset of monsoons. We are currently focused on activating the D1 well. Presently, the total oil in stock in the FSO is about 372,000 barrels. Revised samples were sent for analysis, and the results are expected by end of November '23. We've engaged with mjunction, an auction platform, to auction the crude among the potential buyers. This process is expected to be completed by December '23, and the first offtake would be in January '24. In PY-1 offshore, USD 383 million was invested and mostly impaired but this block has 8 slots platform, 56-kilometer pipeline, onshore processing facilities for about 55 million standard cubic feet per day, with storage tanks for oil. Currently, this field is producing less than 1 million standard cubic feet per day to break even. Seismic data of this block was reprocessed. And our in-house G&G team is reviewing. After the in-house studies, we will engage a third-party expert in the fractured basement reservoirs in London to review and confirm the proposed well locations. We plan for 3 development wells. If everything goes as per plan, drilling first well will commence in the end of first quarter '24-'25. Now I'll update the financial results of this quarter. We report that the stand-alone revenue for this quarter is INR 72.56 crores compared to INR 108.69 crores in the previous quarter. Revenue from offshore B-80 block is INR 19 crores, and the previous quarter is INR 83.44 crores. This reduction is mainly due to shutdown of the field for [ want of ] cleaning of the oil export line, which took about 1.5 months. In case of Dirok, revenue in this quarter is INR 49.68 crores compared to INR 21.17 crores in the previous quarter. The total reduction of INR 36.13 crores in sales is due to shutdown of B-80 field for a substantial period in this quarter. We have an improved offtake of gas in Dirok, but this volatility in offtake will end once the Duliajan gas station is connected to the national gas grid. Field operating expenses for this quarter in the stand-alone account is INR 50.46 crores compared to INR 73.07 crores. This reduction is mainly to nonoperating days of B-80 field. Total expenses, excluding DDA, finance costs, including stock adjustment, is INR 21.78 crores comparing INR 62.64 crores in the previous quarter. DDA for this quarter is INR 4.77 crores compared to INR 8.85 crores in the previous quarter. Oil in stock in FSO as on 30th June is 292,000 barrels and now increased to 329,000 barrels as on 30th September '23, out of which 60% belongs to HOEC. Stock adjustment and credit for the current quarter is INR 43.52 crores, whereas it was INR 27.7 crores in the previous quarter. This difference is mainly because of price of crude oil, which is 74.93 per barrel in -- on 30th of June and USD 93.54 per barrel on 30th of September '23. Stand-alone EBITDA is 49.05 crores compared to 37.82 crores. And the profit after tax is INR 38.74 crores compared to INR 21.34 crores in the previous quarter. In the consolidated account, the total revenue for the quarter is INR 119.74 crores compared to INR 187.14 crores in the previous quarter. This was due to the loss of day rates for FSO and MOPU of INR 33.77 crores due to shutdown of the B-80 field. Operating expenses including facilities in the consolidated accounts for this quarter is INR 63.6 crores compared to INR 84.38 crores in the previous quarter. This reduction in cost due to reduction in the field operating costs due to shutdown of the B-80 field for about 1.5 months. The total cost, excluding DDA and finance and including stock adjustment, the consolidated accounts for this quarter is INR 42.91 crores compared to INR 77.43 crores in the previous quarter. DDA for this quarter is INR 18.37 crores compared to INR 20 crores in the previous quarter. The consolidated profit after tax is INR 43.17 crores against INR 66.07 crores in the previous quarter. EBITDA for the current quarter in the consolidated account is 70.64 crores compared to 96.86 crores in the previous quarter. This reduction is mainly to the shutdown of the B-80 field and the loss of production from D1 well, as well as the charter rates for FSO and MOPU. GeoEnpro Petroleum Limited hitherto as an associate of HOEC is consolidated in the current quarter, which makes our additional -- which makes the consolidated book value of the equity shareholders to INR 1,090 crores. As of October '23, the outstanding loans in the stand-alone books are INR 112 crores. And in the subsidiary books, it's INR 78 crores. Company has obtained A stable rating for INR 500 crores from -- for bank loan from India Ratings. With the current cash position and with the continued production, we'll meet all our obligations, including the proposed work program for a contracted -- for the coming 3 years as planned. Our discretionary planned capital expenditure for the next 3 years is estimated to be INR 835 crores from '24-'25, '25-'26 and '26-'27. This is mainly for drilling 11 development wells, 2 exploration wells, and 5 rig intervention for workover in '24-'25; planned 5 development wells in '25-'26; 3 development wells in B-80 in '26-'27. This CapEx can be met from internal accruals, and when necessary, additional equity will be raised. Now I -- and now -- we can open the forum for questions now.

[Operator Instructions] We'll take the first question from the line of Rikesh Parikh from Rockstud Capital LLP.

Sir, I would just like to understand the problem on B-80 D1, so exactly what is the nature of the problem? When it was being impacted? And kind of what will be the costs to remediate it? And when do we expect it to restart?

Okay, thanks. Two possibilities: one, mechanical issue; second, reservoir issue. This is -- this would be the 2 possible issues. Based on in-hose analysis, it is a mechanical issue. It is being studied by Baker Hughes and we expect a solution to this issue shortly. So this is not going to be a very expensive proposal at this moment. And once the study is completed, we will get -- we'll have a full update on this.

Sir, when the problem was occurred? And tentative, when do we expect it will be activated?

So when we recommence the production, then after opening the D2 well, we plan to open the D1 well. That well is not getting activated. Since then, we have been addressing this problem with the various experts in-house and third-party experts from outside. Now finally we engage with Baker Hughes to carry out it.

And my understanding is that D1 well is largely an oil parcel -- oil-producing well, so the oil production capability at B-80 will be majorly hampered because of this, right?

Yes, that's right till the last quarter.

Sir, second, regarding the Dirok field. It's a good progress. You have made 85% completion. I just wanted to understand. How fast can we increase the ramp up of the production to [ 50 MMBtu of gas ], assuming that Indradhanush pipeline get activated from 4Q?

So as stated as such, we are going to workover 3 wells with the -- right now, these wells are capable of producing up to 50 million cubic feet. And the workover will not take a longer time. With the 3 well workovers and existing 3 new producers, we will be able to go ahead with the 50 million cubic feet per day.

But will it be like 3 to 6 months or post our connectivity of Indradhanush...

No, no, as soon as the connectivity is ready, we will be able to do that.

Okay. And last, sir, on the PY-1, what is the estimate we are taking for the drilling of the 3 wells' costs? And do we presume that timely approvals will be there by this 4Q?

So we estimated the total cost. The first well, we expect it to be successful, which will be followed by drilling 2 more wells, the total well drilling and the facilities referred to be connected estimated to be USD 50 million. And this next financial year, we will be drilling the first well.

Next financial year. Means, [ weather window ] will be open in the...

I think at that time it should not be -- before October, the weather should be good. We should be able...

The next question is from the line of -- [Operator Instructions] We'll take the next question from the line of [ Abhishek Menon ] from Motilal Oswal.

Sir, first question is if I look at Slide 5 in the presentation. So your gross production is sort of 6,694 in first quarter, 6,531 in the second quarter, but net production has gone down quite a bit, so I mean, why is there a decline in net production but not so much in the gross production? So that's my first question.

This is -- I think that the net production is the right number. And the gross production, I have to check. I'm sorry about it. And...

Okay. No worries.

Because of the B-80 and Assam increase, and probably the right number -- and what has happened was Assam increase in production is -- our share is only 27%, so that's why the gross number is right and the less number is due to the B-80.

Okay. Perfect. That sums it up very nicely. And second, I think my understanding is, B-80, one of the wells started towards the end of September. So if you could let us know gross and net production from that well. And will that...

As I told in my presentation, it is currently about more than 1,000 barrels of oil and about 5 million cubic feet of gas per day from the D2 well. And D1 well, we are working on to activate.

Okay, okay. So which should come through in -- like we should have a full contribution in the second quarter -- in the third quarter, right, October-to-December quarter?

It's difficult to state a time line for the D1 well. We are waiting for Baker study. Once the study is completed, then what type of intervention, we will be looking for it, either -- then accordingly we'll decide.

Okay. So basically Q2 production will at least be maintained and will be slightly higher in Q3, right? That's a good number to work with.

We believe that so.

That should be a good number to work with, okay, okay. Fair enough. And sir, I also wanted to check your standalone versus consol. So stand-alone numbers have gone up, but consol have gone down, so again, what has happened over there? Is that Assam which is contributing to this or is there something else?

When you look at it as such in standalone, we had better revenue from Assam Dirok, and that's the reason it has gone up. And the consol, it is less because we are not able to get the full production from D1 well. And second thing is MOPU and FSO charges are getting reduced, it's just for 50%. That's the reason there is a reduction.

The next question is from the line of Tejas Shah from Unique Stock Broking.

One is just as an information. Mr. Elango joined Deccan Gold in form of Nonexecutive Director, but I think, at last con call, what he said, he is retiring completely and he wants to give time to the family, so I really do not understand why he joined over there and why did he not continue with Hindustan Oil? On a personal level, if you are aware of something you can throw some light, just as an information. Now my questions are...

Okay, okay, you ask your questions, Tejas...

Yes. You can take it up together.

Yes.

So questions is, one is this D1 gas production, I think we had a contract with GAIL where we were getting 22% of the value of the oil. Now in the March '22-'23 quarter, they had a call where they said they -- for the first year of the contract, there is no penalty. It is take-or-leave kind of thing, but second year, there is a penalty clause, which will be considered at the end of the year, looking at how much we were able to supply and not supply. But I'm saying, in the last con call, what Mr. P. Elango said, he said there is no penalty as such. So why there is divergence in the -- with the statements. So if you can clarify how much penalty will be levied? And on the second thing, Dirok, what is the average top line that we are expected to generate that is starting from '24-'25, onwards? And do we not again face the problem of the dual pricing when the whole gas grid is connected? Please, can you go ahead?

Okay, your first question, I have no idea. And the D1 is an oil well, and the D2 is a gas producer. And we have a gas sales agreement with GSPC, not with GAIL. So that will be valid till '24 -- March '24. That is an year-end adjustment, so we have got 6 more months to go on it. And we expect that at the end of the year only we will be knowing whether we are short or we are over supply. So there is, in between, 1-month shutdown by GSPC also, with overall looking into this, and we should be in a position to say that number is not a big number, and we believe that there may not be any penalty on it. And in case of Dirok, that the current production numbers I have given to you, it is a little over 20 million cubic feet per day for the gross 100%. And once the lines are getting connected, the 3 lines are getting connected, we should be able to ramp up our production to 50 million cubic feet per day. And once IGGL line is get connected and the national gas grid is fully established with the GSAT, we will be able to ramp up the production to 70 million cubic feet per day effectively from the financial year of '25-'26.

Sir, the current participant has left the queue. We'll move on to the next question, which is from the line of Ajit from Nirzar Securities.

Sir, I just have one question. How is the stock valued? Like is in -- whether at cost or NRV which ever is less or some other way?

It is mark to market, Ajit, so whatever the price based on the closing of the books, that price will be taken into it.

The next question is from the line of [ Darshil Jhaveri from Crown Capital ].

I hope I'm audible?

Yes.

Yes.

Yes. Sir, just wanted to know, sir, with our B-80 field shut down, I think, sir, you mentioned the figure of how much revenues was around INR 33 crores, right, sir?

It's a bit more than INR 33 crores because, the reason for it, the difference in amount totally, because there is an improvement in the Dirok, and there is a reduction in the B-80.

I'm so sorry, sir. Sir, my line just got disconnected. Sorry, sir. Could you repeat, sir? Very sorry for that, sir.

What I was saying is there is an increase in the revenue in Dirok. And there is a reduction in the revenue for about 1.5 months in the B-80, so the overall net reduction is about the amount which I told you, INR 33 crores.

Okay, So but, sir, from the field maintenance shutdown of B-80, how much would it be? And will that come in Q3 because of maintenance shutdown?

No. I don't think Q3, the shutdown is not expected for a longer duration because the one well production will continue.

Sir, just maybe, can you quantify how much would we be able to increase our top line by Q3?

See, I think it's too difficult to put some numbers. It depends on the price. It depends on the quantity. And let us not presuppose us with any number there onto it. And you can do the math.

Okay, sir. And sir, I just wanted to know, sir, I think we had to face some issues in the current year, but FY '25 onwards, we would be going in full swing, sir? Like we would not have any other issue that we could foresee, right, sir? We'll be on -- back to the run rate that we were at current, like before the cyclone, right? So that would be a fair assumption?

Yes, I think our all technical experts are working at the moment. We are given to the best company, Baker Hughes International. It's a reputed company. And we believe that we will have a solution to the D1 well. And once that comes on it, and better offtake from Dirok, we will be doing better numbers from '24-'25 onwards.

The next question is from the line of [ Ritan Shaf ], an individual investor.

Am I audible?

Yes, sir, please proceed.

Yes. My question is on B-80 field. So B-80 field has not produced which -- on the -- both wells with full potential since the commissioning and had some technical challenge like separator leakage and flow line wax choking problem. So what -- I mean, when can we expect like the production from both well continuously? Is it an operational team problem or a geology and reservoir issue? So could you throw some light on this, like what is the future operation plan? Yes.

Yes. As I told you, we are not finding -- our technical team is very confident that there is no reservoir issue. They are believing that there's only mechanical issues, which we are discussing with the various people. Now the Baker is engaged. And with that, we should be able to get a resolution to this issue. And the top side, we have been improving. There is -- quite a lot of improvement has been made. And some small, small issues are still coming up, which [ the prices ] are getting addressed properly now, so we are looking at the contractor to supply the -- to keep the spares ready. So the top-side issues will get eased out by March. I don't think any problem on this. Then the D1 well, we will be trying to work it through with Baker and get a solution to it. So yes, it's -- yes.

Got it -- yes. Please continue, sir, yes.

Yes. See, what happens the total -- after effectively you look at, the total production from the field is less than 12 months. So the problems are coming one by one. We are trying to address it. And normally, it gives -- at least it will take about 2 years for any field to get a stable production. So these are the issues. And every time we come out and say something on it and -- we also speak for it. And we are trying to get it resolved because we are getting some experts from different production process, and the reservoir and all the guys are working on it, and we'll come out the solution shortly.

And this should also help us in reassessing the full potential of the field since we've engaged with Baker now. Will that also helping it?

Yes. What is happening is, once the issue is resolved, then we will have a production data. And that after 2 years of production data, we will go back to the same reserve auditors who have done. So we estimate the -- a material balance. And also, we are planning for additional 3 wells in the block. That will be on '26-'27. So all this whole process will start after that because now it's more of a firefighting on getting this sorted out on the D1.

The next question is from the line of Ashwin Reddy from Samatva Investments.

My first question is on PY-1. So for the incremental volumes that can come on, on PY-1 post the work that we've planned to do, the price -- I mean, do we have pricing flexibility and freedom? Or do we need to sell it to GAIL at the current prices which we have for the incremental volume?

The incremental volume from the new production would be at the price, market price or PPAC price, whichever is higher. We will not be going -- we have already terminated the GAIL contract for $3.66 per MMBtu.

Okay. So this is not the APM price at what you sell? This is actually be the market price, right?

Yes. It's market price, and the market may take the PPAC price as the benchmark.

Okay. Okay. Got it. Got it. Got it. And my second question is on B-80. So I remember seeing that we've given the -- that we are going for a fresh crude assay. So I mean, has anything changed in terms of the field, the quality in terms of perspective or what prompted this fresh crude assay? Because I believe already had it done once, the quality of the oil and to get some insights. So I mean any thoughts would be helpful.

So I think we have done one assay. And now what is happening is we have to have an assay of the volume as such, which we have in the -- that's what we have gone for it. That is about -- right now, when you look at about 70,000, 80,000 barrels from the D2 well. So this combination as such -- because the companies, mjunction and others are looking for a revised assay. And the refineries are also looking for it. We will be giving a sample to refineries based on the stock [ that they pursued ]. That should be matching with the assay which we are giving it. That's why we have given the third party now. And they are expected to give the results by the end of this month. Once assay is given, we will give it to mjunction and to put it for the auction among the potential buyers.

Okay. Okay. Sir, to clarify, this will give us again better insight to the quality, and that will determine the price of what you get from mjunction?

You are right.

Okay. Got it. And finally on -- and finally, on Dirok, so if I understand, Q1 '25, is it, is when the last linkage also will be done and then we'll have access to the end markets? Or what is the time line for us to get fully linkages to the end market where there is no constraint on the demand?

So what is happening is, in our areas, most of the gas goes to Duliajan. Duliajan, we've got a gas station. From Duliajan, it goes to Numaligarh. From Numaligarh, it goes to Guwahati. From Guwahati, it goes to Barauni. So that is GAIL, up to Numaligarh -- sorry, up to Guwahati. From Guwahati to Numaligarh, it's by IGGL. From IGGL, it was planning to have one more line, which is having about 3.5 million cubic meters per day, capacity line. That is coming to Duliajan, which is expected by -- all approvals and everything is in place, by 2025. Before that, DNPL is having a line which can carry up to 2.4 million cubic meters per day, which it gets connected to the Numaligarh of IGGL line. There is an additional demand will get opened up in that area. So we will be a little eased out in the -- once these 3 lines are getting connected and operational. And then the next line of 180 kilometers of IGGL comes in. That will ramp up further in a manner that the total production from Duliajan GSAT can go to the National Grid. That is what we believe it. So if that comes on it, there would not be any restriction.

The next question is from the line of Mihika Barve from BQ Prime.

Can you all hear me?

Yes, ma'am. Please proceed.

Yes. I just wanted, if you could please lay down more details in terms of the CapEx spend. You did mention the -- for the next 2 to 3 years. So what will be the CapEx allocation for the different developments where you are planning to foresee?

Okay. '24-'25, we are planning -- one workover is on the current financial year itself will get completed in Dirok. And 2 more workovers are planned for '24-'25. And 6 development wells are planned in the Kharsang. And 1 deep well up to 3,000 meter is also planned in Kharsang. In a manner, the Kharsang, we can appraise the deeper formations. Then PY-1, we are planning for 1 development well. At North Balol, we are planning for 2 wells. Asjol, we are planning for 2 wells. And Palej, we are looking for 3 well intervention by putting the artificial lift. And in addition to all these things, we are looking for an exploration well in B-19. These are the work programs for '24-'25. '25-'26, we will be drilling 2 wells in Dirok to ramp up the production. We are believing that the market will come in to absorb the gas up to 70 million cubic feet per day, so then we are planning for 1 more deeper well in Kharsang. So the 3 well in North East. And we have PY-1. The first well being successful, we will drill 2 more wells in '25-'26. And then that's all, the 5-well program on '25-'26. And '26-'27, we will be having 3 wells drilled for B-80. So that completes our work program for the next 3 years. The capital outlay we plan for the 3 years is in the order of 835 crores.

Well, I just have one follow-up question, this capital outlay. What mode of financing will you all be employing?

We believe that, with our current cash flow, we would be able to meet our all obligations through internal accrual. And if any shortfall comes, we will come back to our shareholders.

We'll take the next question from the line of Rahul Mehta from Envision Capital. As the current participant is not answering, we'll move on to the next question, which is from the line of Rishikesh Oza from RoboCapital.

Sir, my question is with respect to the PY-1. Sir, when are we looking to start the drilling work here? And also, if you could let me know like what is the production capacity? And when can you commence the work here?

See, we -- the seismic reprocessing -- the reprocess seismic data has been received by our G&G team. Now they are looking into the data, and they may do the revised geological model. And that will be given to RPS energy from -- at London for further fine-tuning the locations. And meanwhile, we will be looking for data grids. And our endeavor is to start on the first -- end of the first quarter or the second quarter of '24-'25. And the volume estimates, we cannot do it at this time. Either way, we will be wrong. So because the production potential of this well can be established after drilling.

The next question is from the line of [ Aditya Padi ], an individual investor.

Sir, can you hear me?

Yes, please proceed.

Just to follow up on like the earlier questions, just wanted to understand what kind of mechanical issues have been predicted by Baker, like if any foresight for now?

Actually, what has happened this well has been shut in initially for about 6 months and subsequently for about 1.5 months to 2 months in the current year as such from June, actually. Now what is happening is the people are saying that there is an obstruction in the tubing because the tubing would have been blocked by some wax or some other things. So that needs to be resolved. So that's the reason we gave this entire study to the Baker just to come out with the issue as well as the solution to this problem.

Okay, sir. That really helps. My next question would be on like we have only now D2, which is the flowing well. So how is the reservoir condition, like improving? Or if you could give any -- like you said about 1,000 barrels, but what are the reservoir conditions over there?

The reservoir is a little better than expected, but we need to observe it actually for the longer period.

The next question is from the line of [ Abhishek Menon ] from Motilal Oswal.

Sir, just on the MOPU and FSO day rate revision, if you can give us some details. My understanding was earlier it was in the range of, I think, $40,000 to $50,000 per day. So what is the day rate now?

Same day rate as well. There is no change in the day rate. Only the day when we are not operating and there is no production, we don't charge the day rate.

Okay. So in that sense, that income is lower by whatever day we are out of...

Yes. Current cost, that was lower because of that.

Okay. So next quarter, that should improve as well?

Yes, we have completed only about 40 days now, 44 days. And now we have to look for another 46 days. So with the continuing production there, revenue should continue.

Okay. Okay. And on the balance sheet, there is an investment in, I think, associates, which you used to have INR 18 crores, that has gone away. So is that because of GeoEnpro acquisition? Or is there something else?

No GeoEnpro acquisition has gone up now because there's been -- we are part of the wholly-owned subsidiary, so it has been consolidated.

The next question is from the line of [ Ralson Lewis ], an individual investor.

Can you hear me?

Yes, please proceed.

Yes. Considering the challenges that were called out in the Q2 in the conference call, I believe these are different results. So first of all, congratulations to the management. My question is related to the Dirok, where we had mentioned that because of the customer shutdown, the production was 1/3, which was predicted to be 2/3 in this quarter. And I think we have crossed a little bit more than that. Can we consider that for Q3 onwards, we come back to your normal 28 to 30 for gas. That's for the D1. And considering that we were having -- for B-80, we were having a production of around 1,200 to 1,400 barrels in the last couple of quarters, which are substantially reduced. Can we expect the production to be around 1,000 barrels per day is what we just now heard. So can we consider that? That's the first question. The second question is with regards to Oil India. They also are coming up with a lot of capacity expansion and they would also go live in a couple of years. So would that -- because your pricing is much better in the Northeast, would that be a limiting factor as far as our offtake is concerned considering that we are premiumly priced? And last, if you can just comment a bit upon the $1.36 million related the order that was given by the Port of Malaysia, if you can comment on that.

Okay. Your first question is on the -- so you have to understand that, Oil India is a partner to the block with 44%. So they are also interested to sell this gas at the premium. And then I told you that '25 onwards, that the Duliajan gas stations will get connected to the National Grid, then it will not be a localized demand, the demand of the nation will get into play a role. So in the case, whatever the capital program, which we do in association with Oil India and similarly, the Oil India's program also, all these additional productions can go to the market. So there should not be any issue on account of that. That's the first thing. Second thing, we are expecting continuing the production of the second quarter from the D2 well. There should not be any issue on it. That's what we believe in it. The third one you are talking about the Malaysian port. The matter is pending before the Gujarat high court. So it's prejudice and it is not fair to me to comment on it. It is sub-judice.

If you can just repeat that particular point on the Dirok, would it be coming back to your 28, 30 mmscfd considering that your customers are all online for the Q3?

Yes. Once it is connected to the National Grid, we should be able to have a substantial demand from this. Whatever the gas comes outcome that Duliajan gas stations can go to the national market. So there should not be any constraint after that.

Okay. And for the D2 well, you mentioned that it could come back to around 1,000 barrels considering that we'll be having to complete 90 days of operations in Q3?

As we speak, it is about 1,000 barrels per day and about 5 million cubic feet per day.

The next question is from the line of Rikesh Parikh from Rockstud Capital LLP.

Sir, I wanted to understand what is the minimum offtake commitment we have with GSPC in terms of how much production we have minimum required to offer to them?

It is about 10 million cubic feet that's worth, with the plus/minus of 10% over a period of 365 days. That's what I remember.

And current production is 5 million, right?

5 million right now. But in the previously, we have supplied more than 10 million.

The next question is from the line of [ Pratik Banthia ], an individual investor.

Am I audible?

Yes, sir, please proceed.

So my question was related to the B-80 field. Like do we have any phase 2 development plan for it? And are we planning any water injection to maintain reservoir pressure for the long-term?

Thanks for this question. Actually, we are planning for drilling 3 additional producers as planned. That will be on '26-'27. And before that, we would like to see the performance of these 2 producing wells. And after that, we will decide any water injection is required or not. Water injection will enhance the reserves -- recoverable reserves both, but that is under -- that is still being examined by our team.

Okay. Okay. Got it. And just another question was if both the wells produce continuously in the B-80 field, can you match the 5,000 barrels per day as was expected initially?

Yes, I think that's our plan as such. But we should now activate the well D1 to get a better update.

The next question is from the line of [ Amrit Kabra ], an individual investor.

Am I audible?

Yes, sir.

You are audible, very much.

Yes, very sorry. So basically, my question was, D1 well is inoperative. And a, what time do you think will it get back on track? And is the management taking any steps that D2 well does not face a similar fate?

See, I told you clearly that D1 well is being looked by Baker Hughes and D2 well is on production. So we are taking all possible precautions and whatever is required to be done, will be done.

Okay. Also, see, if we get both the wells operative at the same time, like they are operation together, do you think you'll be able to achieve the target level of 5,000 barrels as you had expected initially?

I just now answered to another investor that we will be waiting for activating the D1 well and then we will be updating after seeing the well activated.

The next question is from the line of [ Ajit from Nirdal Securities ].

Sir, I just have a follow-up question on the valuation of the inventory. Sir, how much is M2M charge this quarter and the same quarter last year and Q-o-Q, if you can give the numbers?

Yes, just a second. It was -- the last quarter was the increase or decrease in stock was INR 27 crores -- INR 26.87 crores, and the quarter 2 '23-'24 was INR 42.7 crores.

The next question is from the line of [ Prashant Dahiya ], an individual investor.

I think a bit of a muted quarter for us. But sir, I wanted to understand from you, we've recently seen in the global sphere, like Exxon making a big $60 billion acquisition of Pioneer Natural Resources and a lot of M&A happening. Are we considering -- I mean, given the nature of the industry, I mean, we are in the phase that it's a sunset industry over the next 10 to 15 years, being a bit aggressive in terms of exploration, in terms of kind of looking at the resources is essential, right? Are we looking at some global partners who can come take a stake in, but also bring in their expertise and knowledge, but also help us with the capital and generally kind of help explore the potential which is out there, because if these next few years are lost, it looks like a missed opportunity as well. That's one. And the second thing on that, the government is also coming out with some new exploration licenses, right? Is the company looking to kind of pick up some new fields or new exploration areas, anything you can shed light on?

So I think it's not a sunset at the moment, it will take some more time, more time at least, at least 2 decades more. That's our belief. The second thing, we are always looking for technical expertise in the rest of the world. And as you see, most of our fields are producing and discovered one, except one, which is also lying between the Dirok and Kharsang. That's called greater Dirok. That is an exploration. So we believe that we can do a reasonably a good job. That's why we lined up the work program, which you can see that 12 wells in the '24-'25, and 5 more wells in '25-'26, and 3 more wells in '26-'27. See, we lined up the work program to bigger monetization of the discovered ones. And any opportunity, we will be looking at always. There's -- whichever the new licensing comes and open up in the market, we will be definitely getting into it. We will be looking for more and more consolidation.

Great. And one last question. In terms of given the fact that we are very dependent now on these 2, 3 big fields and production areas, do we also take insurance for production loss or loss of revenue or any means so that once you have established production, I mean, any loss should get covered, right, from that perspective?

LOP, loss of profit policy is not available for the production loss. But if you have got an accident or anything happened on it, that caused a loss of production, that's covered under the insurance. So there is no insurance exists for it. But as rightly said by you, we are depending on the revenue of 2 blocks. That situation we wanted to reverse. That's why we are consolidating on the block in the Northeast Kharsang to increase the production. And similarly, we are looking at PY-1. And similarly, we are going to ramp up the production from the Western region. So that we don't want to have a dependence of 2 blocks. It will be now more of 5 blocks from 2026-'27.

The next question is from the line of [ Pashwa ], an individual investor.

Am I audible, sir?

Yes, sir.

Great. Sir, initially, our vision was to get the company debt-free by selling the oil parcel. I think we have some INR 400-odd crores debt, including the long term and short term, some taken last year December due to working capital issues and before that, B-80, which was supposed to pay, I think, 3 months from the day of announcement. So just wanted to understand when we sell this oil parcel, how much rupees will HOEC get as their share which will be reflecting in cash flow which you'll be paying back to the bank, leading to somewhat debt pressure less on our company? That is my first question, sir.

See, it's not INR 400 crores, the total debt as on October '23 is INR 112 crores in the standalone and about INR 78 crores in the subsidiary books, total is about INR 190 crores. That is the bank loans. These are the long-term loans and our total exposure on this is very much limited. So we don't have -- it is payable once in a quarter. So exposure is much, much limited on it and there is no issue on it for debt servicing these loans. Second thing, we are not going to borrow any more for further our investments, as those -- it is mostly from internal approvals. And then if required, we will raise equity from our shareholders.

Sir, I didn't understand that when you sell the oil parcel, how much money will HOEC get in the cash flow?

That I'm answering to it. Whatever it comes, including our partners' payable adjustments and all, we should be getting at least INR 150 crores to us. That's what we believe in it. It depends on the price at the point of sale.

So I mean, I can assume approximate INR 150 crores. And will you use that to pay off the debt by any chance?

No, we don't want to use this because this is of the long-term debts, and we don't want to repay it at this stage. And we'll be -- only one time we'll be supporting it. And we already have a stable rating for about INR 500 crores for bank loan from India Ratings. So I don't think -- it is all a lesser than 10% is the cost of funds. So we will be leaving this loan at the books for the time being.

My second question is the Dirok. I understand 85% of the line is already being constructed. So when coming to the remaining 15%, that will be how much kilometers, if you can help me understand?

See, this is the line, which is around line of 18-inch line, which is connecting from Kusijan to the Duliajan, that is the gas station. Out of that hill area, that is forest area, 15 kilometers has already been laid. The balance 15 kilometers, we are acquiring. We have to get the write-up way and some acquisition -- land acquisition was to get completed. And that is not going to stop our ability to sell the gas because we are requesting Oil India to make a tie in line of the already laid 15 kilometers in Kathalguri place, where this can get on to the Oil India line. So additional that 15 kilometers, we will need 2 workstations, one on this season and the next one next year, so that will get completed as of the end of '24.

So if I understand you correctly, sir, the total -- the distance is 30 kilometers, out of which, 15 kilometers we have already placed the line, which we can get it connected to the Oil India. Am I correct?

Yes, we will be connecting it to the Oil India line once after the 15-inch line is fully tested.

Okay. And sir, this will happen by March 2024, if my understanding is correct?

We are working on it as such it is not a stumbling block to us because if the demand comes up, by the time we should be ready with this time line. And meanwhile, we are procuring the -- we are getting the necessary approvals and other things -- sorry, not approvals, the write-up way and other things to get on to the balance 15 kilometers.

So if I understand you correctly, sir, we have no issues now that we can produce 50 mm on the Dirok fields because we are already done with 15 kilometers. And currently, 23 we are producing, which can go up to 50 without any workover or any further enhancement of the current well at the Dirok. Am I correct?

Yes, yes. Current wells we can go for, but to be on a safer side, we are going for workover also.

It would be how much 2 months, 3 months? Any idea?

Workover, it will be validating about 15, 20 days. That will be per inch well. So we are planning one well in the month of March in the current financial year itself. So back to back, we'll get completed on the first quarter of the next financial year.

So from this, can I assume that the 50 mm production from Dirok can start happening by second quarter of next financial year, would that be fair to assume on a safer side?

As explained earlier, this is more of a demand driven, not supply constraint from our side.

But since we get connected to the National Grid after getting it connected to the Oil India pipeline, so then that -- I mean there would not be any constraints in demand, right?

Yes. There is no constraint with demand as per our geologist. We will do the material balance and we'll come out with that. We can go up to 70 million cubic feet per day.

Okay. And sir, last question will be FSO and MOPU for B-80 revenue would be the same, considering only one value is on? Or would we be charging only half of the revenue?

It is on the full revenue mode as long as the production is from the field.

So even if one well is on, we would charge full revenue, right?

Only we have got 2 wells. Now one well, we are producing 1,000 barrels and 5 million cubic feet of gas and we will be charging on to the 100%.

So that will be $50,000 every day, if I'm not mistaken?

That is as per the rate which we have already communicated that is...

And sir, while repairing the D1 well, would we be shutting down the B-80 plant by any chance? Would that be a requirement to shut down the plant when we fix the D1 well?

For activating the D1 well, we don't require to shutdown the plant.

But for fixing the mechanical issues in the D1 well, do we need to shut down the plant?

No need to shut down. No need to shut down.

So that can -- so it is fair to assume that we will not be expecting any further shutdowns in the next 2, 3 quarters, coming quarters?

We will take it as it comes for certain unforeseen, foreseen. We can't predict so much, actually, in oil and gas field operations.

And sir, now that we have Baker Hughes, is it fair to assume that BEINIT is no more with -- engaged with our company for maintenance profile?

What is it? I can't get your question?

So now that we have hired Baker Hughes for study purposes and fixing the well for B-80. Is it fair to assume BEINIT Energy from U.K. is no more associated with our company?

Each one is looking into their specialization. And Baker Hughes is a company where selling and completion and reservoir and many things. BEINIT Energy is a construction contractor. All will continue. Both will continue.

The next question is from the line of [ Rushabh ], an individual investor.

[Foreign Language].

Yes, sir, we can hear you.

[Foreign Language]?

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]. I will inform you.

[Operator Instructions] We take the next question from the line of [ Jaishal Shah ], an individual investor.

What are your plans to start production? And do you have a pipeline, which will again join to Dirok? Or it will again join to Duliajan? How do you do planning for the pipeline from that production?

These are going through the Oil India line at the moment. So it will continue as such. So whatever the line we are having as such, it will get tie in with Oil India line.

And how -- when are you planning to get the production up from Dirok -- or for Dirok?

So we have explained to you that there is a demand constraint. Once that gets sorted out, that all the 3 lines, DNPL line and IGGL and the GAIL line are getting connected and commissioned. It will get into the National Grid. Once get into the National Grid, that should not be any issue. The demand constraint will get eased out.

In between [Foreign Language]. Has it been solved?

So that's an old issue, which we collected the money from that.

The next question is from the line of [ Mehul Panjuani from 40 Cents ].

I have two questions. One is on fund raise. You did mention that right now, there is no need for capital for the company. But if there is a need instead of borrowing, you will be considering equity. So will it be private equity or will it be rights? Or can you please throw some light. I know that this is very tentative in whatever you would be sharing with us. And also, what is the tentative timeline you would be considering for the fund raise? I mean, depending on the various wells which you have already mentioned in your plan. That is number one question.

Our capital program at the moment, as per our estimates, we don't need any fund required. And this year -- when the programs are going on, we don't have the money, at that point in time only we'll look at that. So at the immediate future, I don't think any fund raising is planned. So we will be comfortable in carrying out the work program with internal accruals.

Okay, sir. So tentatively, when again would be -- there be any consideration, maybe 6 months or a year's time, when you'll be looking at this particular aspect?

I don't have any timeline on it. And we have a -- when we have the resources, we'll go ahead and work the program. You should also understand this is more of a discretionary capital. This is not a committed work program or minimum committed work program with the government or anything. This being a discretionary capital, we should be able to work with our internal accruals. And still we need -- when we got better results from the drilling of the wells and we wanted to quicken the process further and shorten the duration there in, and if we need any money therein, at that point in time, we will go to the investors.

We'll take the next question from the line of [ Manan Patel ], an individual investor.

Sir, first question is, so from B-80, D2 well was expected to be primarily a gas well, but from the production data that you are sharing, it looks like a lot more oil is being produced. So can you throw some light on as the reservoir composition changed? Or is any expectations now different versus before? And second question is, can you share on the -- what is the current levels of production in Dirok? And without Indradhanush coming in, can we expect that 25 mmscfd sort of production from Dirok?

To your first question, it is the D2 well we were expecting there is a gas. That's why there is a gas production maintaining at 5 million like at the moment. It was initially higher. Now it is also we are maintaining at 5 million. That should be the stable one for us. And oil, we were -- initially, if you could see the test results, it was about some 800 to 900 barrels. Now it is doing better as such, it is about some 1,000 barrels. So what we need to have is at least a 2-year production data or at least continuous production of 1 year data to evaluate this -- reevaluate these wells and this -- the reservoir there. So we are waiting for it. So our priority is to activate the D1 well. And the Dirok, as I told you, it is a volatile. Some day, it goes to 0.8. It means about 25 million. Some day, it's close to 50 million. It is getting averaged out around 20 million standard cubic feet per day.

The next question is from the line of Rikesh Parikh from Rockstud Capital LLP.

Sir, in our previous release, we have talked about plant shutdown in this quarter. So anything planned for the B-80 field in this quarter?

So in this quarter, as such, we may go for a shutdown only when we identify a DSV. But that will not be planning for this quarter, it will go only to the next quarter.

And last from my side, sir, the D2 production, I mean can it be increased because we were limiting the production of D1 and D2 initially because we have a capping on the revenue share. So by any chance, is it possible to increase the production of D2?

So I think our people are working on it. From the health of the reservoir, we don't want to increase the production. But we have to ensure the longevity. So we are producing over 1,000 barrels and about 5 million cubic feet of gas. That's what we will continue.

The next question is from the line of [ Aditya Padi ], an individual investor.

Sir, just a follow-up on my previous question. I just wanted to understand that you mentioned about the wax choking that could be anticipated by Baker. So wanted to understand if there -- would there be a rig intervention requirement? Or -- and if so, then what would be the expenses for it and when would that be?

So actually, we are waiting for the study completed by Baker, after that only we will get know actual.

The next question is from the line of Rahul Mehta from Envision Capital.

I have two questions. One is a, when do you expect to commission the National Grid project? And second, you just said that there would not be a demand constraint after it gets commissioned. So what kind of difference we can observe in the numbers of the offtake in terms of financial year '24 in comparison to financial year '25 after it gets commissioned?

'24-'25, we are expecting the line of -- that's Duliajan national pipeline of old line, which will get connected to the IGGL line. So that will ramp up at least up to 50 million cubic feet of gas per day. Once the IGGL of 180-kilometer line, also the new line gets connected, then we will be able to ramp up power production to 70 million cubic feet per day. That will be from '25-'26. We believe that would be from '25-'26.

And there would not be a demand constraint issue after we connect to the National Grid, right, sir?

Country needs natural gas. If it comes to move out from the tariff system from Northeast to Gujarat or any other part of Central India, then I don't think any -- we are not able to meet the full national demand with our existing production of [ the mission ].

And when do we expect it to get commissioned?

This one line, we are expecting to get commissioned by '24-'25. Another one line in '25-'26, that's what we are believing. And first quarter or second quarter, that DNPL line may get connected to the IGGL. That will ease out the demand issue. And the other line that capacity is about 2.4 million cubic meters per day. That's what I understand. The new line gets connected, that will ramp up to 3.5 million cubic meters per day, so additional 1 million cubic meters will get added. So with this and the connectivity established at Central India with the gas grid, then there should not be any demand constraints per se. That's what we believe in and we are working at.

The next question is from the line of Mehul Panjwani from 40 Cents.

One is how long -- I have two questions. First question is how long is the study anticipated to be completed by Baker Hughes? That's the first question. And second question is on the demand. You just answered in the previous question that you are looking at Q1 or Q2 of FY '24-'25. Can we safely assume that the demand constraints will be not there by September 2025?

I think your first question is that the demand constraint will not be there if there is a connectivity established to the National Grid. So they are commissioning 3 lines and if that gets connected and there will be an immediate ease out of the demand, that will help us to get up to our 50 million cubic feet target. And then the IGGL line of 180 kilometers, which is to be constructed, if that gets connected to Duliajan gas station, further about 1 million or 1.5 million cubic meters of demand gas can pumped into that line.

Excuse me, sir, where is the first milestone? What calendar year?

I couldn't get your -- because you are not audible as such, so I'm not able to make...

Am I audible, sir? Am I audible?

Yes, now it's better. Tell me.

Sorry, sir. When is the first milestone in terms of calendar year for the demand to get eased out?

So the first milestone, we expect as such -- because it is not done by us, it is somebody -- by the government companies who are working on it. So what the indications given to us is on the first quarter of '24-'25 for the connection of the DNPL line with the IGGL and to the GAIL line. And that IGGL line is planned to start -- they will start work some time in end of this quarter. And they may get -- take about a year plus, so that will come into action only by '25 or '26. So the timelines are depending on those companies who are working on it. And we get to know only from discussion with them.

Ladies and gentlemen, this will be the last question for today, which is from the line of [ Pashwa ], an individual investor.

Sir, wanted to understand if the D1 well starts, how would you manage the pressure, like the pressure for the D1 and the D2, like there could be a little bit of hassle for you? So any plans of how to manage it since you have all [indiscernible] with you on this call. Can you help understand?

Yes. We wanted to complete -- activate the well because of the pressure there on to it. We know that what was the pressure earlier there on to it. So then oil offtake should not be any problem because we have got 2 separators therein. But the gas offtake, we may need a compressor, we may not need a compressor, it will be known only we fully activated the well.

Okay. And sir, this compressor that you're talking about will cost how much? Or you already have it?

No, we have been sourcing it. It should be less than about INR 7 crores to INR 8 crores. So less than $1 million.

Okay. So anywhere between INR 60 crores, INR 70 crores is a compressor. And you have already sourced it, right?

We have yet to source it. We are working -- talking to various people. First of all, we wanted to activate the well before we commit to the additional factory cost.

Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Thank you. While we continue to focus on achieving the full production of B-80 and Dirok, we will embark on drilling wells in Kharsang, Western Region and PY-1 to develop these fields to their full potential. This will reduce our revenue dependence on B-80 and Dirok. We will also increase and strengthen our talent pool to sustain the growth momentum and the associated challenges. We once again thank you all for joining us today and wish you and your family a very happy Diwali. Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of Hindustan Oil Exploration Company Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.