Hindustan Oil Exploration Company Limited (500186) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Hindustan Oil Exploration Company Limited Q4 and FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sumeet Singhaniya from Valorem Advisors. Thank you, and over to you, Mr. Singhaniya.

Thank you. Good morning, everybody, and a warm welcome to you all. I'm Sumeet from Valorem Advisors. We represent the Investor Relations of Hindustan Oil Exploration Company Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the company's fourth quarter and the financial year ending 2024. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call will 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. Statements are based on management's beliefs as well as assumptions made by and information currently available to the 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 to purely 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 today in the earnings call and hand it over to them for the opening remarks. We firstly have with us, Mr. R. Jeevanandam, the Managing Director; and Mr. Krishnan Raghavan, the Chief Technical Officer. Without any further delay, I request Mr. Jeevanandam to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Sumeet. Good morning. Hope everyone has received the updated earnings presentation. It is on our website for your reference. I have with me Krishnan Raghavan, our Chief Technical Officer; and Daisy, our Company Secretary. And the outset, we would like to highlight some of the achievements [indiscernible]. We believe that we are the first company who secured an offshore block in Discovered Small Field with a drone, one that has put the field on production. We think that accelerated the time and shared the revenue with the government of India. We have paid [ INR 160.5 crores ] to the government of India as a revenue share from B-80 block as on 31st March 2024. In addition, we have paid 10% of the total revenues directly to the government of India, INR 88.53 crores, as on 31st March 2024. Your company has, for the first time in over 40 years, made a consolidated turnover of [ INR 830.27 crores ] in the year 2023, '24. Net profit after tax has also, for the first time in the company's history, crossed a profit of INR 225 crores. All subsidiary companies are in profit more than the current financial year '23, '24. Having said all about our achievements, I will now start with our operational updates about the Eastern region. Dirok gas sale for '23, '24 is 1.95 Bcf and condensate is [ 36,618 ] barrels compared to 3.1l Bcf of gas and 58,768 barrels for condensate in the previous year. During the quarter, Dirok gas sale is 0.55 Bcf and condensate is 10,917 barrels compared to 0.59 Bcf of gas and 10,841 barrels of condensate in the previous quarter. Though this field can produce about 50 million cubic feet per day, we have to restrict the production due to lack of demand. Major players OIL and ONGC are selling the gas at the price applicable for nominated blocks. We are selling the gas at the PPAC price without any discount. Therefore, the gas from the nominated field will be sold first and the balance demand is met by us at the [ LATC ] price. The ceiling price fixed by the government of India for nominated field is 6.51 per MMBtu. The price achieved by us under the PPAC is 8.82 per MMBTu in the current quarter. The PPAC price for May '24 is 8.9 per MMBtu. Therefore, the customers who are mostly public sector undertakings would like to avail the low price from nominated fields of ONGC and OIL. Common carriers start working and the great connectivity is established, this situation would get reversed. We believe that once the DNPL line becomes a common carrier, there has to be some uptick in the volume. The Energy RC is in discussions with various stakeholders. We believe that once IGGL laid its own line from Duliajan to Numaligarh, which is about 180 kilometers, the demand constraint would further be installed. We are unable to fully establish the connectivity of the Eastern gas grid to the central region. Also, this will ensure that an increase in stabilized optics from '25, '26 onwards to achieve the production to the full potential of the field. We have started the workover of Dirok 1 well. This well was completed with the sands 12 and 15 with sand 10, which will be pulled out for further cooperation and cleanup. While cleaning the sands 12 and 15, it is planned to test the sand 9 and 10 for hydrocarbon pollution testing. On successful testing of sands 9 and 10, the potential of the block will be enhanced substantially, in addition to the revision of the resources in the existing producing sands. Downside of this testing of sands 9 and 10 is only the limited additional costs during workover. After the workover of Dirok 1 then, there are 2 other wells will be worked over. Reprocessed seismic data with the revised geological model and the material balance is being reviewed by GCA, and we expect an increase in the discovered resources at the field. After these workovers, we plan for additional [ wells ] for the reserves to ramp up to 70 million standard cubic feet per day. In essence, we keep ourselves ready to meet a potential increase in demand. Once the demand concern is resolved by connecting the North-East gas to the national gas grid. Our subsidiary GeoEnpro is the operator of Kharsang Block. And the groups that are particularly participating in the Kharsang Block, after the review of the production data, continuous workover is planned for producing wells to maintain the current production as well as to increase the production. We plan for drilling 15 wells to increase our production from Upper Girujan. And one exploration well to know the potential of deeper formations such as lower Girujan, Tipam and Barail. Some of the workover and additional corporations are providing positive results, though this block is producing from Upper Girujan formation for over 40 years. Getting an environment clearance has taken considerable time and on obtaining the clearance, we will embark on drilling immediately as the tangibles required such as wellheads, Xmas trees and tubulars were already procured and in stock. We believe a substantial upside is in lower Girujan, Tipam and Barail formation. This block will unlock the substantial value after doing the proposed exploratory well. With the connectivity of Eastern Gas Grid to national grid, monetization of the gas discovery will be faster with a better price. Activity has 100% participating in this -- in the block. [Indiscernible] the block 19 to 12 adjacent to Dirok is said to be Greater Dirok. Reprocessing of the seismic data has been completed, and our G&G team has completed the review. DGH has been approved to drill an exploration well with 7 seismic signatures. Due to heavy rains, civil works will not be constructed in time to move the rig for drilling before August 2024. We have made an application for 2 years RSC extension. And once the extension is granted from MoPNG, we will drill an exploration well and in the process, we will build a second well also. In the Eastern region, the expected capital outlook for the next 2 financial year is about INR 250 crores, which will be further added with very sustained demand for gas supply. Cambay blocks. In Cambay, the total conduct area is about 38 square kilometers, with substantial number of wells for evaluation. Well data are being evaluated and good potential access in all the 3 blocks to enhance production. Once the ring fenced R2 PSC is signed, we could add additional value to the Cambay blocks. Currently, these fields are breaking even, with a meager contribution to the P&L account. In Palej, it is planned to have artificial lift in all 3 wells. We are planning for 2 development wells in Asjol and 2 will not allow to increase the production as soon as we get the normal clearance. EC was expected before March; however, it is delayed. We have submitted the due clarification for all queries raised by the EAP, and we expect the clearance by June '24. Now I go on to offshore blocks. We are pleased to inform that B-80 crude was sold at a price of USD 80.27 per barrel. Once the offloading of 430,000 barrels of oil was completed, and the total revenue of INR 287.37 crores is realized in the first quarter of '24, '25. Production from B-80 field for the year '22, '23 is 187,292 barrels of oil and about 1.85 Bcf of gas. And for the current year, it is 340,887 barrels of oil and 2.13 Bcf of gas. Likewise, production in the last quarter was 95,000 barrels of oil and [ 0.45 Bcf ] of gas. And the current quarter is [ 83,000 ] barrels of oil and about 0.32 Bcf of gas. This production is mainly due to the blockage of the export line with intermittent taken for chemical pricing increase of the section. We would like to inform you that the DNPL well was activated by removing the blockage by chemical injection. [ NLT ] as well as Baker carried out the operation in March '24 and the well is fully activated. And the 2 wells flow was established and, once again, flushing of export flowline. And so it could not test both the wells for its export flowline for a sustained period. It's done by using any various chemicals to remove the blockage in the export flowline, but unable able to get the request record flow rate to test both the wells. Therefore, we have mobilized 15 boilers and indirect water [ but ] heaters with high-capacity pumps to clean up the export flowline. The equipment and personnel are onboard, and once all the equipment are lined up, we will shut the production for some minimum period. And after the new cleanup, we will line up personnel. We honestly hope that this will help us to get the optimal potential of wells D1 and D2 and get a sustained flow rate. This period of shutdown should be minimal, and we believe that the field will come up to normal production level by tradition from both the wells. I move to PY-1 offshore. We are having our facilities, pipeline and other infrastructure required for evaluation of the gas and condensate. Current production from the field is minimal. Seismic data of the block was reprocessed and our in-house G&G team has evaluated and released 3 drilling locations. We have also carried out a third-party expert review, which is ongoing reviews of our team. Possibility on the gas-water contact for North, but South of the field is different, which is indicating the high volumes, which will again be reviewed by a firm of experts in London. After the third-party review being in line with our [ remote ] interpretations, we plan for 3 development wells and if everything goes as per plan, drilling of the first well will come in April to June 2025. Consequent to the issue of D1 well, which was result after a substantial spend and the continued low uptake of results, we are unable to ramp the production to the expected level. We are progressing the upgrade of grid in the results of producing blocks by carrying on the material balance with available production data. We have also lined up the capital program for about INR 4,000 crores in the next 3 years to drill a substantial number of development and exploratory wells. This will create value below the ground as well as above the ground and position the company with a reasonable and stable cash flow to achieve its objectives. Now I will update on the financial results. Stand-alone revenue for this quarter is INR 254 crores compared to INR 109 crores in the previous quarter. Revenue earned for the current financial year is INR 544.28 crores compared to INR 411.1 crores in the previous year. Revenue increased mainly from sale of B-80 crude in the current quarter. B-80 revenue for the current quarter is INR 203.57 crores compared to [ INR 48.43 crores ] in the previous quarter. This is mainly due to the oil sales. Current quarter increase is mainly through the oil sales, which is INR 172.40 crores. B-80 revenue for the current year is INR 354.47 crores compared to INR 144 crores in the previous year. In case of Dirok, the revenue for the current quarter is INR 47 crores compared to INR 57 crores in the previous quarter. Revenue for the current year is INR 175 crores compared to INR 250 crores in the previous year. Field operating expenses for this quarter in the stand-alone accounted INR 67.93 crores compared to INR 76.23 crores in the previous quarter. Operating expenses for the current year are INR 267.7 crores compared to INR 169.51 crores in the previous year. Others, including [ DB ] finance costs and other is INR 60.8 crores compared to INR 77.74 crores in the previous year. Value in stock in FSO on 31st margin INR 33 crores, whereas the value in stock in FSO in the previous year was INR 73 crores. Stand-alone EBITDA for the current quarter is INR 29.45 crores compared to INR 16.74 crores in the previous quarter. Profit after tax in the current quarter is INR 19.1 crores compared to INR 4.82 crores in the previous quarter. The EBITDA for the current year is INR 133.05 crores, I mean stand-alone, compared to INR 223.17 crores in the previous year. This is mainly due to the reduction of revenue of Dirok by about [ INR 75.64 crores ]. Profit after tax for the year is INR 84 crores compared to INR 163 crores in the previous year. Major reasons for the decrease in property, reducing the revenue from on charges for facilities have increased from 187 to 315 days. In consolidated accounts, the total revenue for this quarter is INR 330 crores compared to INR 193 crores in the previous quarter. This was due to crude oil sales from B-80 block. Revenue for the current year is [ INR 830.27 crores ] compared to INR 592.2 crores in the previous year. We are raising about $100 million on our partnership. The total operating cost in the consolidated accounts for the year is INR 552.15 crores compared to INR 358.31 crores in the previous year. For the current quarter, it is INR 241.5 crores compared to INR 137.2 crores in the previous quarter. Reasons for the difference is exactly on the sales. Consolidated EBITDA for this quarter is INR 77.67 crores compared to INR 82.1 crores in the previous quarter. EBITDA for the current year is INR 326.82 crores compared to INR 324.98 crores in the previous year. Consolidated profit after tax is INR 70.61 crores against INR 40.57 crores in the previous quarter. This increase is mainly to the exceptional item of INR 32.87 crores due to fair value adjustment of the existing share of GeoEnpro consequent to business combination. Consolidated profit before tax for the year is INR 248.29 crores compared to INR 197.29 crores in the previous year. Consolidated profit after tax for the current year is INR 226.43 crores compared to INR 194 crores in the previous year. As on 31st May 2024, the outstanding loan in the stand-alone account is INR 75 crores and in the subsidiary account is about [ INR 58 crores ]. The company has repaid the loan of INR 442 crores in the current financial year. The company has A stable rating for INR 500 crores for bank loan from India rating. With the current cash position and with the continued production, we will meet all our obligations, including the proposed work program for the coming 3 years as planned. That's all, we can now open the forum for questions now.

[Operator Instructions] The first question comes from the line of [ Rishabh Masaga ] at Motilal Oswal.

This is Abhishek. Am I audible?

Yes, Abhishek.

Yes. Yes. So just 2 questions. So one on B-80. So how long Dirok commercial shutdown be? And once that is completed, then is it fair for us to assume that both the wells could produce at the same level where they were before the whole incident happening. So I think at the gross level, they would be about 3,000-odd barrels of oil equivalent per day. So that's my first question.

Thanks, Abhishek, and this is -- the work will be started, and we expect a very, very minimal duration of shutdown or cleanup operation. So at the end of the day, it depends on the consuming of equipment on board. So we believe it should be a very minimal period. And now both of us are getting activated. We will be able to test the capacity of the wells once the export line is fully cleaned up. Now we believe we should be able to get back to the -- before cyclone on June 2023. But there might be some variation in the gas production, a little increase in the oil production. And we will test the flow for some time, and we'll let you know.

Okay. That helps. And sir, if you can give us some updates on the India gas grid, what is happening over there? And when can we expect progress on increasing production from that...

Abhishek, what I understood is that lines are made, the compressor and the connecting facilities are to be made. Once that is -- I mean it takes some time and it should be operational at least by the third quarter and by all means, by the fourth quarter. That's what we expect. Meanwhile, the DNPL in line they are planning for a common carrier. Once that becomes a common carrier, then it will be further restored and we will be able to ramp up the production a little more than what we are doing now.

Okay. And DNPL line for now is -- I mean, all India is using it? Or how does it work? And I think most common carrier, we can also use it.

Yes. I think DNPL line is the contract carrier at the moment. Now it becomes a common carrier, I think I understood that the Chairman is sitting there. And the contract carrier has to become a common carrier. When it becomes a common carrier, you can -- on a tariff basis, you can [ form ] the gases. That will get -- when the grid connectivity is fully there, it can go to central India. That's the idea.

Next question comes from the line of [ Vikram Kotak ] with [ Landstar Investments ].

I have 2 questions, but one I think you answered already to earlier participant. What are the CapEx numbers for the next 2 years? That's the question one. And also what is the oil and gas mix now in B-80 for FY '24?

The CapEx plan for the 3 years is about INR 1,000 crores. And what happened, we have that major jump of the -- for the B-80 development that is kept for the third year. The previous estimate roughly around -- annual exposure is about some INR 300 crores per annum. That will be supported by our cash flow. And the mix as such, we are producing about 8,200 barrels oil, and gas is almost equal in production.

The next question comes from the line of Rishikesh with Robo Capital.

My first question is if you could provide net production for the upcoming 1 or 2 quarters. And what net production are you targeting for FY '25?

So we -- Rishikesh, I don't go for any projections for this business basically because many importers have come to us. We can have the reference projections. Our -- we would be improving our current production level once both of those are growing from the B-80 and if there is an increase in the demand from Dirok. Both will be the determinant factors for the coming financial year to increase the production.

Okay. So my second question is with respect with B-80...

Tell me what is the question.

Yes. My question is with respect to B-80. Since the chemical is not fixing export flowline, are we now mobilizing the return? When can you expect to achieve the optimum production level?

We are in the process of cleaning up the export flowline. Once the cleanup operations are over, then we will be testing the well for some period, after which we can get a solid set on it and get the pressure stabilization. And then we will be observing for about 7, 8 days, and that would, call it, sustain the cash flow of the wells. So that way, we will test both wells in such a manner, then we will go into both the production and that would be determine the level of production from the field.

Okay. Okay. Also, sir, if you could just share your revenues from Dirok and B-80 for Q4. We wanted to know the revenue from the Dirok sale and from B-80.

Right. Just related, actually. I can tell you Dirok is about INR 47 crores. And B-80, you have to look at one abnormality because the entire supply at the store has been sold, which is about [ INR 203 crores ].

Next question comes from the line of [ Rohit Ritesh ] with Samatva Investment.

So my first question is the problem at B-80 right now. So will it be impacted by the weather window? So do we expect it to get toward the end of the month? Or will it get postponed after the month?

Yes, I think we have carried out all the precautionary measures and the inspection and change of order. And the maintenance of the SBM is carried out are and otherwise, all the instruction also carried out. And now no one can resist the fury of the monsoon. So that's the position. And such to ourselves, we are fully prepared for meeting any eventuality.

So basically, it can be done during the monsoon?

Yes, that is right. Before the monsoon itself, we have taken care of it. We changed the houses, and we did carry out the SBM maintenance, and we did inspect the [indiscernible]. We believe that we have taken adequate precautions. The weather remains to be unpredictable by anyone.

So sir, right now, in Q1, what is the production for B-80?

Quarter 4 isn't there.

So for quarter 1, sort of -- so both the wells are not functioning right at the level that we want to. So right now, is it short? Or are we producing at lower level?

So we are -- today, because of the blockage of the flowline, we will not be able to tell the exact volume, which comes a little more on one well, a little less on the other well. So we will be able to get back to the normalcy once the cleanup is completed.

Okay. Okay. Sir, my second question would be, so if you look at B-80 overall, it's been 3, 4 years since we started the field. There have been multiple delays, certain things which are not in our end. So I just want to know because of the various problems that have happened in the field, will there be any impact on the overall production? So we were targeting to be around net around 7,000 barrels. So do you see any change in those numbers? Any impact on those numbers because of the various problems happened over the last 3 to 4 years?

Actually, if I tell you precisely, we have started on June forecast 2022. So 2 years now. I agree with you. Now, see, we are not worrying too much about the below-the-ground research. And above-the-ground facilities are hindering it, which we are trying to solve one by one. And if we -- to attain this production level, we will be -- we are planning for drilling 3 more wells to fully exploit the block. The expenditure level should be around $50 million. So that's what we plan 2 years down the line. Once we reach to that level, we can reach to the plate of production level what you are indicating to me. With the current tools, we won't be able to reach to that level.

Got it. So overall, there is no change. Once the problem is solved, we can still reach the levels that we want it to be earlier, right?

The current production level up June 2023 can be continued. But you will reach to the level of the number you indicated to me, more than 5,000 barrels in gas and condensate. It would possible only after drilling the additional 3 wells, which at the time was the cost of about $50-plus million. That's what we are planning at the end of third -- planning for the third year. Now the first year, we'll concentrate on our onshore and one well at the offshore. B-80, we'll get back to building up -- producing some fine wells only in 2016 -- 2026, '27. Sorry, '27, '28.

Next question comes from the line of [ Manan Mundra ], an individual investor.

My question is regarding the Dirok-2. Just wanted to understand, currently, the reduction in the sales volume in the Dirok-2, is it due to the supply side pressures or the demand side pressures?

If the wells are intact, we can be able to supply 45 million to 50 million cubic feet per day even tomorrow morning. But the fact remains we don't have demand for that offtake. That's the reason we have to curtail our production.

Okay. And once the North-East grid gets connected and the central grid gets connected, the demand is going to pick up. But just wanted to understand, is it going to impact the premium prices that we are charging? I'm supposing the gas flow is bi-direction in the flowlines. So can you please clarify on that?

What happens, you'll get a better price because it gets connected to the national grid. So the additional cost to you would be only the tariffs from the line. Tariffs are pumping the gas into the line. You will be getting the price that is in the Western region, you should be getting the price in the same in the Eastern region. But what also minus only the tariff charges. So in essence, we should be able to always get around PPAC price.

Okay. And that includes -- I mean after netting of the transmission charges, right?

That's right. So we have to look at because if the price also will move up once it's connected to the national grid. So any increase on that price will certainly offset by the increase in the cost on a conduct...

Okay. My second question is on the Kharsang field. We are planning to increase our output and having more exploration wells in that part, right? So how do we -- is there already a pipeline for extracting the oil? Or how is it done currently? And what are the future plans on that -- from that?

So Kharsang effort, there is -- Oil India is also operating in that area. So about 26-kilometer line needs to be laid, then it will connect to the grid. I don't know the exact name of the place which we visited also. It is about a 26-kilometer line only to be laid to connect it to the Eastern grid, then it will automatically get into the national grid. There will not be any problem on monetization once the drilling on Cambay takes place.

Next question comes from the line of [ Bhavik Shah ] with MK Ventures.

Sir, when would these wells be shut? So like can give us the date, or the reason they're not functioning?

I couldn't get that question.

You're currently having some shutdown in our D1 oil rig, right?

No, the shutdown is because of the reservoir blockage that has been rectified. Now both the wells are fully active.

Okay. So for how long was this shutdown?

No future. It will be a very, very limited duration, and our people are working exactly as we speak. And we will let you know once the line cleanup is over.

Next question comes from the line of [ Anushree ] with Alpha Invesco.

Yes. Congratulations, sir, for the activation of both the wells. So my question is regarding -- so any idea what could be the oil and gas production from D1 and D2 wells, respectively, after the export line is cleared? I believe we had guided for a 3,000 BOE from B-80 in our last call. Is that the number we will be sticking with? Or what is your expectation?

So I wish my visual projection is 3,000 barrels of oil equivalent per day, but we should be certainly reaching the level of 2,500 as by the reference what we observed the last few days.

Okay. And sir, how many days was the D2 well operating in the last quarter?

D2 well was operating on and it was almost on a continuous basis. But expect for some intermittent shutdowns of 4 hours, 3 hours, like that, for injecting the chemicals.

Next question comes from the line of [ Lei Shah ] with Unique Stock Broking.

Yes. In our outdoor meetings, you have mentioned, I think, in terms of possible disclosure or decide on the disclosure and inform. So can we understand what exactly went in the meeting and what is decided?

What is it? What is the question, [ Lei Shah ]? I couldn't get it.

With disclosures, what is given -- to be given to the stock exchanges? In your outlook, you mentioned that now the Board has decided on some policy and that I think yourself is going to decide on the material event and inform the exchanges. So can we understand what happened in the meeting or even inside?

So this is based on the security guidelines. They put a threshold actually that we updated in the policy.

I did not get the answer, like regarding the estimation of policy.

We have updated our disclosure requirements in our governance in accordance with LODR.

Fine. Okay. Can we understand of when -- even when it was activated? Which date?

It's -- we have activated the well on 2 occasions. First of all, we have to see the well activation is not a situation which is uptight. We have to see that the well is getting activated and stabilizing the flow and then what is the bad pressure it is having with the existing facilities. So many parameters we have to check. And every time we wanted to see this well is in a good condition to flow continuously that we have established in the end of March. But we were not able to test the flow rate. So that's why we couldn't come back and inform, the well is activated and this would be the flow rate and other things because of the blockage in the flowline. Now we are trying with the chemical injection is clear of the blockage that was not so successful. So now we are mobilizing the team as well as the hard water. And both things will be as we speak, it is on the platform and they will do the cleanup operations. Once the cleanup operation is completed, we will put the well and observe if sustain the flow. Once a sustained flow is confirmed, then we will accordingly inform.

Next question comes from the line of [ Rushav ], an individual investor.

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Next question comes from the line of [ Parsiva ], an individual investor.

Sir, my question is in regards to the previous question by [ Mr. Rushav ]. What is it that vehicle guys did and why they were not able to fix it in now being the export, they should have been able to fix? So why were they not able to fix it? And why do you think that you will be able to fix it, that they were not able to fix it? That is first thing. And with the same question, another question comes like in the same thing that -- are we changing any -- directly the line or the pipes or the host right now when the team is being mobilized currently or not? Because if there is a problem in the line, I remember you mentioning in previous concall that we already have that hot flush line there which is already installed in our facility. So what new are you going to do right now that will help us to fix the problem?

Yes. Yes. I tell you the Baker was mobilized for well activation, which we made and both the wells are active now.

You mean to say -- when you say active, does that mean there is flowing?

No. The activated means the wells can flow once it is running the line. The line means -- I cannot store the oil at the [indiscernible]. So once the line is fully cleaned up, both the wells can flow to its optimum capacity, right? Till the time, if I wanted to flow more than [ 32 ] third-party barrels, the line gets choked. So that's the problem. Okay? We will clean up that line. Second thing is your question on it. We were talking about we have made an insulation on the cost side as we have sold in the last time. Then we have instructions indirect water bath heater. This is all functional now. But the temperature required, we couldn't achieve it. The main reason for it, uninsulated rises, about 95 meters. And that also we are planning to insulate. In essence, there is an element of heat is required in the oil that's pumped -- getting pumped into the export flowline. If the temperature is high, then there would not be any wax formation. If the temperature is low, that continue to lever wax formation. This is a process, and we are learning and we know how to clean up in 3 months. So we are the first time attempting with the team and the indirect water bath heater to get the maximum heat getting into the line. That appearance temperature, that should be set within temperature. You look at 80 degrees, it will melt about 52%; and 90 degrees, it will melt about 65%. So we are attempting to clean up the line as much as we can with this deal. Once this is done, we believe that there would not be any further obstruction and using the chemicals on a continuous basis. And this causes we will continue once in 3 months to enable us that there is no blockage in the export flow line.

Next question comes from the line of Sunil Jain with Nirmal Bang.

Yes. Continuing on this, Baker has clear with resolve the other problems. And once the line gets clear, then those problems got fully resolved or not, we will come to hold there thereafter, am I correct?

Yes. That's right.

And the flowline is not a onetime problem. It's a continuous problem and you need a continuous solution for that, whatever the solution you would come out that will be therefore continuous process.

What happened, there is a wax in the field, the wax deposit get averted. Once you have the clean line, further the pollution can be arrested by injecting the chemicals. We identified some chemicals therein and we will pump it along with the crude, so that will stop further accumulation of the wax in the line.

Next question comes from the line of Mohammed Patel with Care Portfolio Managers Private Limited.

In the last call, you mentioned that the FY '26, we can do net 10,000 BOE produced. Can you draw a range of what can be other fields contribute in this number?

See, giving any projection is depending on the continuous production of the B-80 and our off-taking the Dirok. Then what we are planning for the ramp-up in the Kharsang and some ramp-up in the small contributions will come also from [indiscernible]. So 2 already existing assets can be -- can increase the production and the new assets based on the other program of drilling and other things were covered, we will be able to increase.

Can you give a broad range how much...

I think it's too immature to give you any guidance on this.

Next question comes from the line of [indiscernible], Landstone Investment.

My question is kind of in continuation to, I guess, the previous question that was asked. See, sir, for us, as investors, we like a certain degree of predictability and not too many surprises. But I have been following our company for the last 5 years, and there has been a lot of ups and downs and unpredictable surprises coming our way. And even now, we are unable to really estimate what the current year or the future also. In that sense, it makes it very difficult for us as investors to really -- on how to value the business. So what, in your view, sir, is a time line that you can say that, okay, maybe in this time period, we will be in kind of a steady state where we'll be able to sustainably and safely predict our revenues and our production, et cetera. Because every year, it's been kind of very topsy-turvy and that puts us in a bit of fixed on how do we really value the company or the business? Any thoughts you can share on that to help us?

I would like to submit one fundamental fact. Oil and gas business, there are 2 ways. We are looking back only from the monetization that is above-the-ground value. But below-the-ground value also matters a lot. Now this company is sustainably increasing its reserves and resources over a period. Now that reserve and resource basis have to be monetized. There are certain impacts on monetization because certain things are beyond our control. For example, we are ready to flow the gas, but there is no demand at the [indiscernible]. Similarly, March and [ QD ] not in our predictions. Yes, we did not a great job on our tax rate facility that has created some problems on the B-80. Then it is a learning for us, and we are trying to fix it up. And as you see that the uptime of the facilities of '22, '23 was about 60% that we have increased to 86% in '23, '24. So these are the ways we are also trying to do our best to get on to it. Then what happens when the price -- the price is not in our hands. The price moves up and down then currently the things going on. As a gas company, I am comfortable to say that to you, the underlying value of the assets are increasing, it is substantial. But the monetization to the expected level is not getting reached even to our visual projection, we are not able to achieve because the impacts are beyond our control. But we believe that the next financial year once the Dirok production comes and the stability on B-80 production and drilling up questions and some of the workovers which are doing is in [ Iraq ] and the wells to be drilled in Western regions. This will offer some more stability in a growth mix with growth.

Okay. Sir, we have been very patient with the company, and I think the company has a lot of value, as you said, but we will be more patient for another year also. And hopefully, by next year, as you said, the thing stabilizes and we are able to predict, go on a predictable path forward and reach the production levels that make us happy.

It is our interest -- it is our digital projection also, we should do better, better by monetizing the existing assets as well as creating the new assets. Thank you.

Next question comes from the line of [ Bhavik Shah ] with MK Ventures.

It's really disappointing to see that how the mediator is handling the call. We are not even allowed to answer a question or a follow-up or a second question. Maybe the call is in a hurry or something or what? So my second question was, sir, what is the CapEx plan for like FY '25? Can you just break up into segments? Where are you going to invest? And what are the return issues are you seeing there?

See, our CapEx plan, I told is INR 1,000 crores, which will be -- every year, we are trying to spend about INR 300 crores. If you have seen in the last financial year, '23, '24, we have repaid the loan to the extent of [ INR 235 crores ]. That now current financial year onwards, we will be embarking on the investments, and we could have got some more investments made on the first time, which we could not do at the moment with clearance.

All the INR 300 crores will go basically to Kharsang for this year. Is that what you mean?

I'll tell you that we will be going for about building the wealth and working over and creating a facility in North-East. It is about INR 250 crores to INR 300 crores. If the demand picks up, we will drill more wells there. And we plan something on the Western region and something on the PY-1. On the last year, we are -- 3 years, 2 years down the line, we'll be again going for drilling 3 wells as planned in the B-80.

Next question comes from the line of Anushree with Alpha Invesco.

So I had another question. So in the PY-1, we have -- do we have the [indiscernible] platform installed? And post all the drilling, when do you expect the production to start from PY-1?

So PY-1, we have carried out the pricing fee processing and third-party review. Our team has released the 3 drilling locations. This will be again reviewed by an expert from East London. Once it is true, the parcel, we are planning in June 2025. That's what our plan at the moment. Once the wells start drilled and we determine the floor rate, then we can tell you actually what is the quantity that we will be able to pump it.

And sir, so is the platform ready?

We don't have a place from there. It is a [ subsea, though ].

Okay. So the infra is ready, is what I'm asking.

Absolutely. All we can evacuate up to 55 million cubic feet of gas and about 2,000 barrels of condensate. But unfortunately, we -- our 4 wells are not capable of producing more than 1 million cubic feet of gas. And then the 3 planned wells, there should not be any concern on the facilities, and we will be able to quickly monetize on some drilling and completion and facilities are getting connected to the place.

Next question comes from the line of [ Sham Gelp ] with Lateral Finance Limited.

One of my questions have been answered. My first question is with respect to what is the approximate operation -- operational days of [ BKP ] in Q1? Operational number days for this quarter.

For this quarter, right? For this quarter, it's the entire 91 days out of that [indiscernible]. Intermittently, you can take the number of [ hours ] shut down, it's about 4 hours, 5 hours together. These are roughly around 25 days we were on production.

Sorry, sir, your voice was inaudible. I wasn't able to hear.

About 25 days. Can you hear us now?

Yes, sir.

25 days on the last month, right? Last quarter. In the last quarter is 23.

Next question comes from the line of [ Hardik Mitra from Phenomics ].

Am I audible, sir?

Yes.

I have a couple of questions. First question is regarding B-80. You made around INR 200 crores in Q4. And sir, currently, what I understood that you are running with 1 well. So considering 2 wells fully operational, [ So can -- ] like is it correct to compute around INR 400 crores of revenues from B-80? This is my first question. And sir, regarding Dirok. The second question is regarding Dirok. You said like around 200 million standard cubic feet you are excluding Q4. And you're like connecting the national gas grid, you will be able to produce around 70 million standard cubic feet. So once this line would be -- would get connected. So can we expect -- you met INR 56 crores in Q4, I think. So can we expect -- like it will be 3x wells in that case, your revenue will make your -- output will grow up to 3x from 23 million to 70 million. So can we expect around INR 150 crores of revenue once it will be fully operational? This is my second question.

You can refer that Dirok, '22, '23, we have produced about 3.1 Bcf [ barrels ] of our shares and about 58,000 barrels of oil. In '23, '24, it was about 2 million cubic feet of gas and about 36,000 barrels of condensate. So that net revenue before finance cost was about INR 191 crores on '22, '23. It has got reduced to INR 117 crores. We've actually lost about INR 73 crores. For this -- things would get reversed when we reach to the level of production of '22, '23, and it gets into the multiples, but similar numbers will get reflected.

Next question comes to the line of [ Rikesh Parikh on Absolute Adviser ].

This -- from B-80, I think, sir, our agreement for the gas price sale is getting expired. So can you give some thoughts on how we are going to take it forward here -- on here?

I think we have got -- we have extended, we have got the auction completed. And the price we will be now getting is about 12.2% of the -- 12% of the Brent price, which was much higher in the previous year. It's about 22%, now reduced to 12%.

Okay. So if proportionately, if you are to look at it of around [ $16-odd ] what we call the relation that will reduce around [ $12-odd ]?

Yes, that's right. It will be around 12.2% of the Brent price.

Next question comes from the line of Rohit with ithought PMS.

Yes, I have the same question on the repricing of the gas from the [ Quinto vessels ]. Are you saying that this is 12% of the crude, right?

12% of the Brent price.

12% of the Brent price, understood. And sir, in terms of B-80, the pending issue that we are trying to do with the export for the [indiscernible]. There, I was not clear. So is it contingent on the monsoon or it is not contingent on the monsoon? Can you explain that? I would want to understand that. And any time lines you were sort of talking about? And has the work already started? Or are we waiting for equipment if you can just maybe explain that?

The equipment is already on board. They will be starting the work on the line of the -- it may be taking a couple of days. And that's a period, we'll go for a small period of shutdown. And once the line cleaned up, we will again reconnect both of those. And second thing regarding the inquiry on the monsoon, we endeavor to operate during the entire monsoon period. But see, the monsoon period, you cannot predict, if that's the issue. If any -- so that we're fully prepared to operate during the monsoon, normal monsoon.

Next question comes from the line of [ Vishal Prasad with BP Capital ].

So approximately INR 280 crores we got out of crude. So what was our share out of INR 280 crores? And what was the share of the profit?

So we see, we always look at our participating [indiscernible] which is 60%.

Okay. So out of [ 50%, ] 60% is the revenue as well as profit?

That's right. The record [indiscernible] will get adjusted for the outstanding cash flow of the other parties.

Okay. Another question is, I think it's been happening for last 2 years, and I have asked a lot of times [indiscernible]. So in your view, when you see at B-80, I mean how are you going to solve the continuous problems that we are facing? And is there an [ end ] to the problem?

I think I would like to tell you one thing. So we build the wells successfully. And the top [ sale ] facility is having the issues initially. Now but the day, it has been implemented, that was during the COVID period. So we are in a difficult situation, but we implemented the project. Now we will be able to solve the problems one by one. And because it is too difficult, it is like a structure and it has already been installed, there's no possibility of just throwing it away and get a new one done. So every small issue comes, and then we are rectifying it. Now being an offshore, you have to look at the uptime, uptime of the facilities. If you look at the uptime of the facilities of '22, '23, it was about 60%. Now it has gone more than 88%. So in a manner that we will gradually improve, it comes around the 90% to 95%. So that's what we are planning for it, and it is a learning ground for us because the crude -- quality of the crude is [indiscernible]. And it was not expected that this continuing of the wax deposition will be so high in the flow line. That was not anticipated. Now considering that's happening now, we have to take a preventive measures. So that's the reason once the line is getting fully flushed out. We have to put the chemical, which not allowing the further deposition of the wax. But this is a continuous process now to keep the facilities always on a proper maintenance as well as the lines were on. So we are learning, and we will be doing better work in the coming years. That's the way before we embark on 3 more well drilling, we should be in a position, our facilities can handle the additional volume without any issue. That's what we are planning for.