Hindustan Oil Exploration Company Limited (500186) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q3 and 9 month FY '26 Earnings Call hosted by Hindustan Oil Exploration Co. Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Saloni Soni from Ernst and Young, Investor Relations team. Thank you, and over to you, Mr. Saloni.

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

Good morning, everyone, and welcome to the quarter 3 financial year '26 earnings call. From our team, I have Krishnan Raghavan, our Chief Technical Officer; N. Senthilnathan, our Chief Financial Officer, joining me on this call. I will start with the updates on the Northeastern region. Let me begin with an update on the Kharsang block. As of today, we have drilled 8 wells and ninth well is in progress. Out of the 8 wells, 5 wells are oil wells and Sixth well is completed as gas well. The other 2 wells will be perforated once the drilling of the ninth well is completed and will be hooked up for production. Sixth well encountered with well control issue, is resolved and converted as gas producer. It was tested for production and with a minimum choke, it can be on continuous production of about 2 million standard cubic feet per day. The results from the sixth well authenticate the substantial volume of gas, which can be commercialized at the earliest once the Northeast gas grid is fully operational. Though we have completed the drilling of seventh and eighth well, will be perforated along with ninth well once the drilling of the ninth well is completed as all the 3 wells are in the same plant. You are aware that we have secured environmental clearance for drilling 40 development wells and 3 exploration wells in the block. We will continue to drilling to reach the full potential of the block subject to partners' approval. Our current production level is about 800 barrels per day and some workover of existing wells could not be taken up due to repair of workover rig after the well control issue. We honestly hope that with the support of Oil India Limited, we can unlock substantial value for all stakeholders in the block. G&G review of the data of newly drilled wells with the data of old wells authenticate the potential of the field already communicated by GTA. We have received responses to the expression of interest for a 2,000 horsepower rig as well as 1,000 horsepower rig. We will finalize the drilling rigs to progress further. For the Dirok field, the revised field development plan has been approved, enabling an extension of the block. We plan to drill a well in North Dirok targeting the Barail formation. Based on the responses to the expression of interest for a 2,000 horsepower rig, we will finalize the drilling contract upon receipt of the formal extension letter from the Government of India. Dirok gas sales for the current quarter is 13 million standard cubic feet per day, while the offtake in the previous quarter was 14 million standard cubic feet per day. Accordingly, sales volume of the current quarter is 0.31 Bcf compared to 0.34 Bcf in the previous quarter for our share. Condensate production is 5,614 barrels compared to 5,858 barrels in the previous quarter. Price realized in the current quarter is $7.32 per MMBtu compared to $7.8 in the previous quarter. While the field within existing wells has the capacity to produce up to 45 million standard cubic feet per day, production has been constrained due to limited demand. It can be seen that IGGL has hooked up the connection up to Numaligarh from Guwahati and commissioned it. It is to note that mechanical completion of the DNPL line also has been completed. Now the connection of DNPL line with the IGGL line is yet to be completed, expected by end of March 2026. Good progress has been made. We are closely watching the development to augment our capacity to meet the increase in demand. We hope that the increase in offtake will occur before the end of the fourth quarter of the current financial year ending 31st March 2026 or early first quarter of '26-'27. We anticipate the grid to be operational within financial year '26, '27, we will augment our capacity by drilling in North Dirok and by drilling 3 more development wells in Dirok. This will enable us to increase the sales volume to meet the rising demand by connecting the Northeast gas grid to the national gas grid. Block AA-ONHP-2017/19, which we refer to as Block 19 is an area adjacent to Dirok, known as the Greater Dirok and is analogous to the Dirok structure. We have received the environmental clearance. We have also secured 2-year extension effective December 2025 to drill 2 additional -- to drill exploration wells. Regarding the Umatara Block, we have 10% participating interest in this block where IOCL is the operator holding 90% participating interest. IOCL has started drilling the first development well and has drilled up to 4,300 meters and tested, needs stimulation, and this will be after completing the second well. We endeavor to complete our drilling in the Northeast within 2 years to commercialize the discovered resources to meet the increased demand on completion of the Eastern gas grid. Moving to our Cambay blocks. We have drilled 2 wells in North Balol, 1 well flowed oil in Balol pay, which will be put on production. And the second well is planned to sidetrack for Babaguru formation. With this, we will have 4 wells on production from North Balol. We plan to drill 2 wells in Asjol. We also expect to receive final clearance for the ring-fenced production sharing contract along with the extension of the Palej block. Following the extension, we will install SRP in existing wells and drill additional wells in Palej. These activities are expected to enhance the value across the Cambay assets. Overall, production from the Cambay wells remained stable at 0.32 mmscfd of gas in quarter 3 financial year '26 compared with 0.33 mmscfd in quarter 2. Now I'll speak about our offshore blocks in Cauvery and Mumbai High. Coming to the Mumbai offshore blocks. In case of B-15, the G&G review and preparation of the development plan is in progress. Given the water depth of about 40 meters, we should be able to put the field on production within about 2 years. In Block B-80, we hold 100% participating interest. Production in the current quarter is 43,742 barrels of oil and 0.4 Bcf of gas compared to 31,468 barrels of oil and 0.23 Bcf of gas in the previous quarter. During this quarter, the average gas price realized is USD 10.5 per MMBtu compared to USD 10.62 in the previous quarter. Our plan to work over the D1 well continues and plan for drilling additional 3 wells in progress, which we will start after the forthcoming monsoon. And we have sold about 417,000 barrels of crude oil to HPCL in accordance with the crude offtake and sales agreement, titled and incurable interest transferred to HPCL at the offshore delivery point on 25th September 2025. Nearly 3 weeks after taking the custody of the crude, HPCL raised a concern regarding the contamination. While the COSA does not include any warranty or representation regarding the crude quality, and therefore, there is no basis for any claim or cost on us, and we are actively pursuing all available avenues to realize the outstanding dues from HPCL. Cauvery offshore block based on the study by Petrovietnam, we proposed drilling 2 infill wells, one appraisal well through the existing platform and one exploration well outside the platform. The project remains economically attractive even at the PPAC pricing, given the minimal incremental capital requirement and the availability of substantial unrecovered costs. Moving to the quarterly results. Our EBITDA for the current quarter is INR 31 crores in the consol accounts compared to INR 25 crores in the previous quarter. We remain committed to drilling a total of 18 shallow wells and 3 deep wells in Kharsang, 4 wells in Dirok, 2 wells in Greater Dirok and 2 wells in each in Asjol and Palej in our onshore assets. To unlock the potential of our offshore fields, we plan to drill 10 offshore wells, 3 wells in PY-1, 3 wells in B-80 and 4 wells in B-15. Timing would change, but it is our endeavor to complete the drilling to unlock the value of all our assets. HOEC's reserves and resource potential are estimated about 100 million barrels of oil equivalent for its share. These resources can be developed in a cost-effective manner, offering substantial value creation for all stakeholders. We remain confident in our ability to navigate temporary challenges and committed to progressing our drilling program and monetizing the discovered resources and -- reserves and resources. Now I will now hand over to Senthil, our CFO, to take you through the financial results in detail.

Thanks, Mr. Jeeva. Good morning, all. Stand-alone revenue for this quarter is INR 77.32 crores compared to INR 321.51 crores in the previous quarter, which includes crude oil sale of INR 258.78 crores from B-80. Revenue from gas sales from B-80 for the current quarter is INR 40.22 crores compared to INR 22.94 crores in the previous quarter. Current quarter revenue increase in B-80 is mainly due to continuous production of gas, which is [indiscernible] MMscf in this quarter compared to 229 MMscf in the previous quarter, which was impacted by monsoon disruptions. In the case of Dirok, revenue for the current quarter is INR 23.78 crores compared to INR 26.57 crores in the previous quarter. During this quarter, 314 MMscf of gas was sold compared to 339 MMscf of gas sold in the previous quarter. Similarly, 5,614 barrels of oil was sold in this quarter compared to 5,858 barrels of oil sold in the previous quarter. The decrease in revenue is mainly due to less offtake from gas customers and margin reduction in selling prices. In stand-alone accounts, the field operating expenses for this quarter is INR 60.34 crores compared to INR 46.51 crores. Statutory levies are INR 12.44 crores for the current quarter compared to INR 10.6 crores in the previous quarter. Similarly, total cost without stock adjustment in the current quarter is INR 87.7 crores compared to INR 71.5 crores in the previous quarter. The increase in expenses is mainly due to increase in production in B-80 field. Stand-alone EBITDA for the current quarter is INR 23.89 crores compared to INR 28.81 crores in the previous quarter. Profit after tax for the current quarter is INR 11.96 crores compared to INR 19.4 crores in the previous quarter. In consolidated accounts, the revenue from operations for this quarter is INR 81.04 crores compared to INR 64.53 crores, excluding crude oil sales in the previous quarter. Total expenses without stock adjustment in the consolidated accounts for the current quarter is INR 94.32 crores compared to INR 85.95 crores in the previous quarter. In consol accounts, EBITDA for this quarter is INR 30.99 crores compared to INR 25.15 crores in the previous quarter. Consolidated profit after tax for the current quarter is INR 8.28 crores compared to INR 2.83 crores in the previous quarter. India Ratings have reaffirmed the rating [indiscernible] for INR 500 crores bank loan. With the internal accrual and continued production and with the borrowings for capital expenditure as required, we will meet all our obligations. Thanks, and back to Mr. Jeeva.

Thanks, Senthil. We can open the forum for questions.

[Operator Instructions] We have the first question from the line of Gautam Rajesh from Leo Capital.

My question is what is the exact status of the Northeast grid connectivity for Dirok? The PPT basically mentioned that the mechanical work is done. What all is pending here, sir, between now and when the connectivity happens?

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

Gautam, do you have any further questions?

No. That is it for my end.

We will take the next question from the line of Harshit Khadka from RoboCapital.

Sir, as per our internal budgets or estimates, what can be the net production for FY '27 and '28 and the debt level for the same period?

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

Okay. And sir, can we expect Dirok to go to 45 mmscfd from Q1 FY '27 itself and this additional gas offtake will be consumed by which customer?

It will get into the grid. Once it gets into the grid, then it is on the -- anybody can consume. There is no regular customer request for you, which can -- you can enter into any long-term arrangement, short-term arrangement, whatever it is. The gas supply will go up to the -- up to [indiscernible], right?

We have the next question from the line of Dhruv Rawani from Shreeji Finserv LLP.

Sir, can you give me some time lines on the workover well for B-80?

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

So the -- what was supposed to happen in Feb will now happen in post monsoon?

Yes. I think we are trying to do that before 15th of May. But by almost likely, it will be happen after the monsoon.

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

Not only source a rig and there is an onshore activities are going in a full swing in Eastern region because as we are speaking, we are drilling on the wells in Kharsang. And some resource constraints because we have to get the money from HPCL. So with the resource constraints, I think we will be able to do it in the -- after the monsoon would be sure. And before the monsoon, it's little doubt.

Okay. And are we on track for the PY-1 well which you were supposed to start in April?

PY-1 well, we can go up to still October. There should not be any problem of drilling. And our people are trying to get the rig at the lowest possible rates. They are trying to do whatever the best they can do to start the drilling at the earliest. As I told you, the offshore campaign is a little getting delayed because of the impact of the revenue.

We have the next question from the line of Sucrit D. Patil from Eyesight Fintrade Private Limited.

I have 2 forward-looking questions. My first question is, beyond the production guidance, how will Hindustan Oil manage risk and uncertainty in the B-80 field and the Dirok Phase 2 development? Particularly around reservoir performance, regulatory approvals and execution time lines, what frameworks will ensure resilience if outputs or approvals don't move as planned? Just want to understand your point of view on this.

Okay. So, 2 questions you raised. One is about the uncertainty, another one is about the risk. We don't find any uncertainty in these events. So risk is akin to the oil and gas business, which is below the subsurface, and that is the only risk. And the risk is more mitigated by already drilled a number of wells. So Dirok, we don't have any uncertainty on -- we don't have any risk as expected. And the risk is much limited. And similarly, in B-80 also, there is no problem on the reserves. There is no problem on the reservoir. And at the moment, the government of India is pushing for drilling maximum number of wells. There would not be any constraint from the Government of India to getting the approvals. So as usual, some small delays here and there will take place. That won't impact the operations to the wells -- as well as production.

We will take the next question from the line of Sabri Hazarika from Emkay Global Financial Services.

So first question is on Dirok. So how much production you expect it to go up to once this [indiscernible] gas grid NPL connectivity happens?

I think we can go to the full potential, which is about 40 million to 45 million cubic feet per day.

And currently, what is the production?

13.

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

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

Right. And your -- I think one pipeline from your fields to the Duliajan gathering station that has been done?

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

Okay. So the evacuation of 45 million up to Duliajan is ready from your side?

Even if it is tomorrow, it's ready.

Okay. And you mentioned that March end, this hookup is March end or probably Q1 of FY '27, this hookup is expected. So this is subject to -- I mean, it's just a technical hookup? Or is there some -- I mean, from Oil India, we have come to know that there's some PNGRB approval also which is required to make it a common carrier or something of that sort. But if that doesn't come, then also this technical hookup can happen? Or would the things should happen simultaneously?

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

Okay. Once -- first, the hookup will happen, then the PNGRB clearance will come, right?

Right.

Okay. And for that, NRL will have to take a shutdown also for this hook up to happen?

That's right, that should not be more than about a week.

Right. And B-80, right now, what is the guidance? Are you like giving a target in terms of increase in production? Or are we at this range only and trying to like reduce the impact.

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

Okay. Those 2, 3 wells, which you are planning after that, there will be an increase in production. Is that right?

Yes, workover may improve. But till the time -- till all the 3 wells are drilled, it will be on the similar line.

Okay. Got it. And last question. So what's the assessment for Kharsang? You have 35% stake right now, correct?

Yes.

Okay. And what is -- you mentioned that you've got the environmental approval. I mean, 8 wells you have already drilled, right? And they've been put into production or they are being tested right now?

You could listen to me that around 5 wells are already on production. And the other 2 wells, along with the sixth well is completed as a gas well. And it is on the same plinth. 2 rigs cannot work simultaneously. So the 2 completed wells are to be perforated. And this will happen along with the third well completion. So which we are expecting by the end of this month or 15 -- by our probability, by 15th of March, we will be able to hook it up.

And do you have a planned production plan for next, say, 2 years, how do you see the production of Kharsang, both oil as well as gas?

This is actually a field which is having See, the 28 wells are already on production, which are all depleted, which are all on the old legacy wells. These 9 wells are the new wells. And we are expecting the new wells can produce better and the old wells needs to work over. The production plan per se is about targeting about 1,000-plus barrels with the existing well.

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

Yes, I think we have the Government of India as a policy, but it's all subject to the demand, right?

Okay. Only if it is like sent to sectors like CGD and all, you will get that premium pricing. Is that right? Otherwise, it is like classified as a stranded gas. So maybe like it's like at that APM rate only. Is that right, right now?

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

Okay. Fair enough. And just one last question.

Sorry to interrupt, Mr. Sabri. I would request you to rejoin the queue. [Operator Instructions] We will take the next question from the line of Mehul Panjwani from 40 Cents.

Sir, what is the update on the PY-3 arbitration?

So it is -- the tribunal has been constituted. Now the tribunal will be deciding on this [indiscernible] venue. And after that, they will get on to the substance of the matter.

Sir, what is the time line for this? Any idea?

Arbitration, what time line I can give you. It is up to the -- tribunal can give you the time line.

Right. Okay. Okay, sir. And sir, how many days was B-80 operational in this quarter, sir?

This quarter, almost 90 days we have been operating, except to 1 or 2 days, it is about 89 days, right?

Okay. Okay. And sir, this HPCL issue, what they have mentioned that they have found contamination that was expected to be resolved -- get resolved in the last quarter itself. Why is it such an overhang? I mean it's such a such a [indiscernible] issue?

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

How much funds are pending on this one?

INR 259 crores plus interest.

We have the next question from the line of Amit Mehendale from RoboCapital.

So my first question is on the production, net production. So if you were to move to, say, from our current levels of 2,500, 3,000 tags to say 6,000 level, what is the by field net production that we're estimating. Can you please get numbers like Kharsang, B-80 that we split of 6,000?

No, I think we are waiting for the -- I've already told to Kharsang, we will be a ramp up of 2,000 barrels. And Dirok should go about to 3x of the current production. These are the 2 immediate things and smaller volume can come out from the Cambay. And we cannot choose the exact numbers as such, we will be wrong.

Sir, if I look at the math because that way, Dirok will add only 600 incremental. I mean, Dirok will become essentially yes, about 600 barrels and Kharsang, so most...

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

We're doing 237, right, or 250 for Dirok. So we'll go to 750?

Okay. Now there are how much is -- so you have to convert into the gas into oil, right? You do that, it will be a much better number.

Okay. Understood. And my second question is, sir, on the transition part. So what is the path there? And do you wish to hold your personal equity in the company going forward?

So that's a personal equity remains with a company like any other investment, okay? And now I think the NR committee and the Board is looking for the new CEO, which you will get an announcement shortly on that.

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

Change is the law of life, right? Change is the law of life, right? Constant is a change. [indiscernible] at home.

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

It would be somewhere around 60%.

We will take the next question from the line of Riddhesh Gandhi from Discover Capital.

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

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

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

As you say that, we are constantly drilling one well per month on an average, and that progress will continue on it. Kharsang drilling is going on it, and we are looking for the rig to drill the North Dirok. I mean Dirok extension is pending with the Government of India, which we get at the earliest. Once the extension comes, then we have to start the drilling of the North Dirok and that is about -- and Cambay, we have drilled 2 wells in North Balol, and we are waiting for the extension of the Palej and as well as ring-fenced RF from the Government of India. Once the extension comes, then we can ask our partners to put the money and we can start drilling.

Okay. Sir, and if you could sort of explain the HPCL issues slightly in the detail because it's slightly strange that they will take the oil without actually testing it. And then given that they've actually made a large release, the refinery was closed down and on the conference call also sort of indicated it was all linked to our oil. Just if you could give us a little bit incremental granularity on what the issue is, how the resolution is expected and the exact status right now? Because obviously, it's going to impact our future CapEx? And is there any risk of this happening with other oil which is produced in the B-80?

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

And have you taken any the legal action against them?

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

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

3 to 4 months. In the course of any arbitration on this should be dealt within a period of 4 months.

Got it. But we've not started with the arbitration.

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

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

I think we hope and we pray for that.

Okay. Okay. And on the Kharsang, you could expand on the potential we have from Kharsang and how we're looking at the opportunity there?

So Kharsang, you see there is a well controlled issue on one of the well drilled, and that means the potential of the gas is substantially enough to connect to the grid line. So Oil India is investing to drill additional number of -- more number of wells. So we will be in a continuous mode of drilling there and the deeper prospects also. And this will unlock substantial value of the block. That's what we believe in. And every well would be adding at least about 100 barrels per day additional production. And if the gas -- we are expecting even by perforating the shallower part of the existing wells and some other 1 or 2 new wells, we can go up to a minimum of 10 million cubic feet per day.

We will take the next question from the line of Rajiv Agrawal from Sterling Capital.

Some data question, sir, what is the conversion factor we used to convert gas into equivalent barrels of oil? That is my first question. And [indiscernible].

First question, can I answer before, then you can ask the second question. 6000 standard cubic feet is roughly equivalent to 1 barrel of oil. Okay. Now second question.

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

This is mainly due to the reduction on the Dirok uptake as well as the B-80. Both were not performing as expected.

We will take the next question from the line of Nirbhay Mahawar from N Square Capital.

What is the net debt or cash in the book?

INR 55 crores as on date.

INR 55 crore debt or cash?

INR 55 crore debt and the cash is about INR 30 crores cash is there.

And would it be fair to assume, based on current expectation that Dirok production next financial year would be at least double of this year? Would it be fair to assume?

We expect triple of this year.

For next financial year, FY '27. So we would be expecting around 40,000 MMBTU daily production?

That's right.

We will take the next question from the line of Anubhav Goel from Cosma Ventures.

Sir, if I heard you right, the HPCL issue is not resolved in the next 3 to 6 months, and we don't get the money then we would mostly delay the drilling for PY-1 and B-80 post monsoon?

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

Right, sir. Right. So sir, the October time line you mentioned for PY-1, that is independent of the HPCL issue?

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

Then this would mean you would take on more debt? Or are we more open to equity as well?

We will talk to the board to have a look at it, and both options are open at the moment.

And sir, you mentioned the new CEO, do we expect him or her to come within the next 3 to 6 months?

I think much earlier than that, I hope.

We will take the next question from the line of Prashant [indiscernible], an Individual Investor.

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

Yes. I don't think we have got an immediate option to sell anything on store, but it's -- that's ruled out and overall, in my opinion, it should -- I may be wrong, it should be much earlier. But it will delay the whole process by about 4 to 6 months.

Yes. Okay. And sir, second question is on B15. I mean we had spoken about a year back that once Discovery would add that it will take about 2 years. for us to start realizing. Now given that we have 100% participating interest in this, and it's a shallow field, et cetera, and there are already some wells there. I mean, are we more aggressive? What is the -- what is our -- because this could be a significant revenue changers for the company in the bit too long run. So where are we with the development plans and environmental clearances, et cetera?

I think we are already waiting for the mining lease once, that is expected shortly. Once the mining lease comes and we will -- our people are already working on the development plan, that will be given to the Government of India for approval. After that, we will start placing orders for the materials and things required in a slow and steady manner. So in a manner that we will be able to put the field on production within about 2 years from the submission of the development plan.

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

So I'm not happy about it. That is -- that's for sure. So one is even because you are able to produce, you are not able to sell. And second thing, you are continuing with the capital commitments and the B-80 is not performing as expected. These are the more of an issue -- the surface issues, which has to be resolved. Until the resolution comes, some of the things are not within our hands to do it. So until all these things are getting resolved, we are not able to achieve what we are expecting. There are gaps. And these are the gaps are getting filled up now. So we will be able to do much better once grid connectivity comes into play.

We will take the next question from the line of Manan Patel, an Individual Investor.

Sir, first question is regarding the -- just wanted to understand the accounting because if I see the difference between stand-alone and consol, the revenue is just INR 4 crores. While I understand Kharsang and the subsidiaries like Hindage and all those comes is consolidated apart from stand-alone. So I would have assumed that revenue in stand-alone would be much higher than just INR 4 crores. So can you throw some light on that?

I think, Manan, clearly, I've seen what is happening is they are asking us to hit it off some of those, that might be the other issue for it. And you can send me that question, so I can -- because after [indiscernible], I'm not able to answer to you clearly. I will -- you can give me a call and I'll go through the numbers and explain to you.

Okay. Okay, sir. And sir, second question on Kharsang. So you mentioned 1,000-plus barrels. So is that only oil or that is including gas? Because you said gas...

It's just oil. Just oil.

Okay. So once gas connectivity is there, you can produce a lot better in Kharsang as well, right?

That's right.

We have the next follow-up question from the line of [ Mehul Panjwani ] from Forty Cents.

Sir, one update, which I missed out is maybe I was not there in the commentary, so can you please brief on the new CEO and changes in the management?

I think [indiscernible], what we call the Nomination Remuneration Committee and the Board is discussing with the people, and they will come out with the new CEO, we will announce it actually.

Sir, are you taking a different position at the executive level or are you [indiscernible]?

I won't be in any executive position.

Sir, you are leaving your position, is it?

Yes, I will not be in this position.

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

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

Okay. So how long will you be able to continue?

Until the new CEO comes. This is very clear in the message actually to the stock exchange.

Okay. Sorry, sir, I have [indiscernible]. And sir, about the B-80, as you said that it is not performing optimally. So how would we rate the performance of the B-80 currently?

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

What -- so can you elaborate on zone transition.

Sorry to interrupt, Mehul. I would request you to rejoin the queue again.

No this is just a follow up question on the...

Okay. Next question.

We have the next follow-up question from the line of Anubhav Goel from Cosma Ventures.

So the approval now for the next 9 wells for Kharsang, you mentioned we have to take partner's approval. Any color you can provide on this?

So we have -- we are ready to drill the wells, but we are only 35%. The balance 65% approval is expected. As we speak, we have already circulated trading the approval for the 9 wells, are immediately on 6 wells and then followed by another 3 wells a little later. But the budget is proposed for the 9 wells and 1 deeper well.

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

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

We have the next question from the line of Riddhesh Gandhi from Discover Capital.

You indicated that you needed an extension on Assam. Just wanted to understand, is there -- is this just procedural? Or is there any risk attached to it? Or how should we be looking at that?

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

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

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

We have the next follow-up question from the line of Mehul Panjwani from Forty cents.

Sir, you were saying something about the zone transition, if you can elaborate, it will be helpful for D2.

What has happened was in D2 well, we have perforated the gas zones. Now there are other 3 zones on the top. Once the gas zone started depleting on that, then we have to perforate on the top zones, which will also produce oil and gas, right? So this will be normally being done during the workover.

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

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

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

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

Okay. So as soon as the demand is there, we are kind of ready for the offtake? Right, sir. Okay.

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

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

Thank you, members of the management. On behalf of Hindustan Oil Exploration Company Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.