Hindustan Oil Exploration Company Limited (500186) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Hindustan Oil Exploration Company Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Cyril Paul from Ernst & Young. Thank you, and over to you, Mr. Paul.

Thank you. Good day, everyone, and welcome to the Q2 earnings call of Hindustan Oil Exploration Company Limited. The company published its results on November 14 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. Such statements are made on management's beliefs and assumptions made by information currently available to the management. Audiences are cautioned not to place undue reliance on these forward-looking statements on 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'd like to hand over the call to Mr. Jeevanandam. Thank you, and over to you, sir.

Thanks, Cyril. Good morning, everyone, and welcome to the Quarter 2 Financial Year '26 Earnings Call. From our team, I have Senthilnathan, our CFO; and Daisy, our Company Secretary, joining me on this call. We regret for the delay in scheduling this earnings call as the notice was not given to the exchange in time. I'll start with the operational updates regarding our various blocks, starting with the Northeastern region. Let me begin with an update on the Kharsang block. You would recollect that we had secured environmental clearance for drilling 40 development wells and 3 exploration wells in this block in February 2025. The drilling will be executed in a phased manner with the initial phase comprising nine development wells. As of today, the drilling of the seventh well is in progress, and five wells have been put into production. While perforating the gas zone of the sixth well, we encountered well control issues, which we expect to be resolved within a few days. After this, the sixth well will also be perforated in its oil zone and will be put into production. The results from the sixth well authenticates the substantial volume of gas, which can be commercialized once the Northeast gas grid is fully operational by later this year. We will continue to drilling to reach the full potential of the block. We have already released six more locations for further drilling. And after completion of the initial phase of drilling of these nine wells, we will proceed with the next phase of drilling an additional nine wells and one deep well. We have reached a production level of about 900 barrels per day from this block, up from 350 barrels of initial production. We honestly hope that with the support of Oil India Limited, we can unlock substantial value for all stakeholders in the block. A review of the data from the drilled well authenticates the substantial potential of the block stated in the GCA report. Moving on to the Dirok field. The revised development plan for the Dirok block has been approved, enabling us to secure an extension of the block. As you would recollect, we plan to drill a well in North Dirok after the Barail formation. We will evaluate responses to the expression of interest for a 2,000 horsepower rig and finalize the contract. Dirok gas sales for the current quarter is 14 million standard cubic feet per day, while the offtake in the previous quarter was 20 million standard cubic per day. Accordingly, the sales volume of the current quarter is 0.34 Bcf compared to 0.49 Bcf in the previous quarter for our share. Condensate production is 5,858 barrels compared to 8,893 barrels in the previous quarter. Price realized in the current quarter is USD 7.8 per MMBtu compared to 7.56 in the previous quarter. The field has the capacity to produce up to 50 million standard cubic feet per day with the existing facilities, though the production has historically has been constrained by limited demand. Demand is expected to rise significantly once the Northeast gas grid is fully integrated with the national gas grid. The progress made on this front that IGGL has successfully commissioned the connection from Guwahati to Numaligarh, the next milestone is the completion of the DNPL-IGGL linkage, which is actively underway. We are closely monitoring the development and preparing to scale up our capacity to meet the anticipated increase in demand. We expect the grid to be operational within financial year '26 and hope that the increase in uptake will occur before quarter 4. We will augment our capacity by drilling three more development wells in Dirok and further drilling in North Dirok. This will enable us to increase the sales volume and meet the rising demand once the connectivity improves. Block AA-ONHP-2017/19, which we refer to as a 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 and we apply for a 2-year period extension as per the recent notification to complete the committed work program of drilling two exploration wells. We have stated the extension of the -- we have submitted the extension of the bank guarantee to the Government of India to secure the extension. Regarding 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 3,900 meters, which will be completed within a month. Our expected capital outlay for the Northeast region for the next 2 financial year is INR 250 crores and more, and we are endeavored to complete our drilling in the Northeast within 2 years to commercialize the discovered resources. Turning to our Cambay blocks. We have successfully drilled two wells in North Balol. One well has flowed the oil in Balol Pay and further testing is underway, while the second well did not meet the expectations, and we may be sidetracked to target another structure, which is under southern structure. With these developments, we will have four producing wells in North Balol. Looking ahead, we plan to drill two additional wells in Asjol. We are also awaiting final clearance of the ring-fenced PSC along with the extension of the Palej block. Once the extension is granted, we will install the SRP in existing wells and drill additional wells in Palej. These initiatives are expected to add reasonable value to the Cambay assets. Current production from Cambay remains the same at 0.33 mmscfd of gas in quarter 2 financial year '26. I will now provide an update on our offshore blocks in Mumbai High and Cauvery basins. In Block B-80, where we hold 100% participating interest, production for the current quarter stands 31,468 barrels of oil and 0.23 Bcf of gas compared to 48,406 barrels of oil and 0.37 Bcf of gas in the previous quarter. Production was temporarily impacted by monsoon-related disruptions from mid-June to 1st week of August 2025, affecting the revenue for the quarter. We are making every effort to avoid disruptions and remain committed to improve and minimize the shutdown as much as possible. The average gas price realized during this quarter is INR 10.62 per MMBtu versus INR 11.4 in the previous quarter. We have sold about 4,700 -- 470,000 barrels of oil to HPCL. In terms of the crude offtake sales agreement called COSA, the title and risk of the crude oil, along with the insurable interest transferred to the buyer at offshore at the outside flange of the FSO on 25th September 2025. Three weeks following the appropriation of the crude by HPCL, we received a letter from them regarding the contamination issue. This issue has nothing to do with the quality of B-80 crude, which is sweet and light. As per COSA, no warranty or representation regarding the quality of the crude is provided, thus negating any basis for claims or cost or consequential damages, if any, against us. We are currently engaged in discussion with HPCL to resolve the matter amicably and realize the sales revenue. For the Mumbai offshore B-15 block, the GNC review and development plan are progressing well. This discovered field spans 332 square kilometers and is supported by extensive 3D and 2D seismic data. Once the development plan is finalized, we will commence development activities. With a water depth of approximately 40 meters, we are confident of bringing the field into production within 2 years. Regarding Cauvery offshore block PY-1, based on the study by Petro Vietnam, we will initiate our drilling program. We are in discussion with the various contractors and suppliers to commence the first well in financial year 2027. We proposed to drilling two infill wells, one appraisal well to the existing platform and one exploration well outside the platform. We have received the expression of interest from various drilling contractors and will finalize the drilling rig and source the long lead items to commence the drilling at the earliest. This program is expected to unlock significant potential and on successful drilling and completion of the wells that can be connected to production immediately given that the processing and the transportation infrastructure already in place. Even at the PPAC price, this project is economically viable since the capital infusion is marginal with a substantial unrecovered cost. Moving to the quarterly results. Our EBITDA for the current quarter is INR 25 crores in the consolidated accounts compared to INR 35 crores in the previous quarter, mainly due to the low offtake in Dirok and monsoon fury in B-80. 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 East 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. With internal accruals, we secured a debt capital of INR 250 crores to meet the above capital expenditure. This term loan will be used exclusively for our capital expenditure. We have substantial value below the ground, and we believe we bring this value to the surface and thereby unlocking value to all stakeholders. We will overcome all the temporary setbacks, and we will continue to drill and monetize the discovered reserves and resources. I will now hand over to Senthil, our CFO, to take you through the financial results in detail. Senthil, please.

Good morning all. Stand-alone revenue for this quarter is INR 321.51 crores compared to INR 83.48 crores in the previous quarter. The increase is mainly on account of crude oil sales from B-80 field. B-80 revenue for the current quarter is INR 281.72 crores, which includes revenue from crude oil sale of INR 258.78 crores. Revenue from gas sales from B-80 for the current quarter is INR 22.94 crores compared to INR 38.58 crores in the previous quarter. Current quarter revenue decrease in B-80 is mainly due to lower production of gas, which is 229 mmscf in this quarter compared to 370 mmscf in the previous quarter. The decrease in production is mainly due to monsoon. In case of Dirok, revenue for the current quarter is INR 26.57 crores compared to INR 36.98 crores in the previous quarter. During this quarter, 339 mmscf of gas was sold compared to 490 mmscf of gas sold in the previous quarter. Similarly, 5,858 barrels of oil was sold in this quarter compared to 8,893 barrel of oil sold in the previous quarter. The decrease in revenue is mainly due to less offtake from customers. In stand-alone accounts, the field operating expenses for this quarter is INR 46.51 crores compared to INR 55.8 crores. Statutory levies are INR 10.6 crores for the current quarter compared to INR 12.13 crores in the previous quarter. Similarly, total cost without stock adjustment in the current quarter is INR 71.5 crores compared to INR 81.51 crores in the previous quarter. Stand-alone EBITDA for the current quarter is INR 28.81 crores compared to INR 27.24 crores in the previous quarter. Profit after tax for the current quarter is INR 19.04 crores compared to INR 15.69 crores in the previous quarter without considering the exceptional item of INR 32.52 crores in the previous quarter. In consolidated accounts, the revenue from operations for this quarter is INR 325.31 crores compared to INR 85.5 crores in the previous quarter. Main reason for increase in revenue during the quarter is crude oil sale in B-80 field. Total expenses without stock adjustment in the consolidated accounts for the current quarter is INR 85.95 crores compared to INR 84.79 crores in the previous quarter. In consol accounts, EBITDA for this quarter is INR 25.15 crores compared to INR 35.02 crores in the previous quarter. Consolidated profit after tax for the current quarter is INR 2.83 crores against INR 11.35 crores in the previous quarter without considering an exceptional item of INR 32.52 crores in the previous quarter. India Ratings has reaffirmed the rating IND A for INR 500 crores bank loan. With the current cash position and continued production and with the borrowings for capital expenditure as required, we will meet all our obligations. Thank you, and back to Mr. Jeeva.

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

[Operator Instructions] The first question is from the line of Sucrit D. Patil from Eyesight Fintrade Pvt Ltd.

I have two forward-looking questions. First is looking beyond this quarter's numbers, I want to understand what the bigger picture for Hindustan Oil is, especially as the company operates in an energy transition and exponentially risk profile. As global demand also keep on shifting and affecting the overall business model, over the next 1 to 2 years, what is the one big change that you are driving that, that will make Hindustan Oil stronger and more trusted in the upstream oil and gas space? Is there -- will it be about expanding the reserves or building deeper partnerships or any JV? Yes. Can you please shed some light on that? And I'll ask the second question after this.

Okay. See, the underlying reserves and resources of the company in our estimates, which is in the order of about 100 million barrels of oil equivalent. So for this, we continuously -- as you are talking about transition, majority of our resources, at least more than 50% are in gas-based. So that is the energy transition mode for a clean fuel as such. So that's why we are concentrating more on drilling mode now. So as we speak, we have completed six wells in the current year, seventh well is in progress. We continue to drill the wells in the Northeastern region. And once the gas grid connectivity comes in, that will unlock substantial value. And whatever our resource potential can be get monetized. And similarly, in offshore, we have got three blocks, which is directly under our control. And out of all the three blocks are 100% owned, we are planning to drill additional 10 wells that will unlock the value of the discovered reserves and resources, right? In addition, we will be embarking on one exploration project in Northeast that is the Greater Dirok. That will also -- we believe with the chances of success, if everything goes in line, we will be add additional reserves on it. In a manner, we will be a meaningful player in India for any upstream activities in the coming years. And no company can do success on oil and gas unless continued drilling activities. So as we speak, we are in the drilling mode, and we'll continue to drill and unlock the value. And as a partnership concern, we are in partnership with ONGC in Cambay and with Oil India and then IOC. They are our trusted partners and valuable partners. We'll continue to engage with them. And as well as any new partner comes with -- either with the knowledge base or with the monetary support, then we will engage with them. That is what I can say at the moment.

That's a good guidance. My second question, again, forward-looking one on margins and cost planning. Mostly margins in oil and gas are always or mostly under pressure when cost rises, whether it is through drilling, compliance or exploration. Just want to understand how you think about protecting the profits without slowing down growth. Is there any smart sourcing or pricing discipline or any other operational efficiencies that you will be putting into place? And how do you balance these in practice, so that Hindustan Oil can remain strong even when certain things get very unpredictable or maybe due to some global concerns in the next few quarters?

Okay. See that, as you rightly observed, there is a volatility in the prices, which is not in our control. What is in our control is two important factors: doing a job properly and then reducing the cost. Since we are on the job, we are basically a marginal operators and in a manner that cost becomes priority to us and structuring the contracts. And both we are working in a mode that we will not allow the cost escalation, which will kill us. That is on the one side. Second thing, some hedging, natural hedging allowed us. For example, in offshore, we can store substantial volume of crude oil that we can adjust the price fluctuations to our advantage. And gas as such per se, no one can store it, and we have to sell that is depending on the price per se. Now with all the incentives and the market is getting developed in the Northeast, we will be in a strong balance sheet by '26, '27, and that will support all our capital program. And 2 years down the line, we will be on a mode of realizing the -- monetizing the existing reserves and enhancing the next level of growth. That is what we believe.

That's a wonderful guidance from your part, and I wish the entire team best of luck for Q3.

The next question is from the line of Nigel Mascarenhas from EverFlow Partners.

A couple of questions from my end. Firstly, what is the status of the Northeast pipeline, which connects the region to the National Gas Grid. By when is that expected?

As we speak, there is a line Guwahati to Numaligarh from IGGL line has already been connected, commissioned. That is the one end that has already been completed. The other end from Duliajan to Numaligarh, that is a DNPL line, which is to be connected. We are expecting shortly on that. Once that is completed, then the gas offtake immediately can increase at least by about 1 million cubic meters per day. Then it can further augment by another 1 million cubic meters that can take care of our supply therein in a manner that there would not be any demand constraint for our existing six-well program. But by the time we complete other four wells in the block, and the possibility of producing from Kharsang, that time the full-fledged the national grid would be operational, that will be connected to the Northeast gas grid. There should not be any demand constraint, and we will be able to monetize comfortably.

Got it. And by when is it expected to be completed?

I see, I am not privy to that exact details actually, but we hope that should get over by end of this quarter, and some offtake improvement should take from fourth quarter. And by all probabilities to the best of having spent about more than INR 10,000 crores by the Government of India, in all earnest, they wanted to put the grid into operational. By first quarter, by all means it should be through in the next financial year.

Got it. And my second question is on B-80. So for B-80, what are the interventions planned to stabilize and scale up production? How much will they cost and by when will they be done?

See, actually, we wanted to start the workover now, but that is getting delayed by 1, 1.5 months. So first our -- initially, our program is to one workover. And after this, then -- after the next monsoon, we will start drilling three development wells. That is by not through a subsea well that we are putting a platform therein. After that, we drilled the three wells. So once the three-well drilling gets completed, this block will have a stable production. So till the time, it is dwindling around by 600, 700 barrels and about 5 million cubic feet of gas.

The next question is from the line of Harshit Khadka from RoboCapital.

Hello. Am I audible?

Yes.

My first question is regarding debt. So what is your outlook on debt? Like how do we see debt going forward in FY '27?

See FY '27, we will be able to flow through on the Dirok and the Kharsang, and the 2 things will come and our exploration success will add the reserves therein. And B-80 would be in operational. B-80 at least fourth quarter, we'll be able to increase the volume thereon. And by the time our PY-1 will come. And we will be in a full -- we will be starting the monetizing mode from Northeast to the offshore blocks.

Sir, do we have any expected debt level as such?

No, we don't want to borrow more than this INR 250 crores, which we already secured it.

All right. And my next question is regarding production level.

Sorry to interrupt, Harshit. Please rejoin the queue for more questions. The next question is from the line of Dhruv Rawani from Shreeji Finserv LLP .

So on that workover of D1 well, when do you plan to actually do it?

See now we are talking to some of the companies. And by first -- last quarter of this year, we will be able to complete that. That is only about 30 days job. But some of the companies who have already installed the three and other things, they were in the mergers. So we are talking to the companies who are taking over from them because you need the [indiscernible] and other things and the tools actually to pull out the three. Three running tools are required. So we have been in discussion with them. Once that is through, then we will be finalizing the drilling rig and go ahead with it.

Okay. So we will expect the workover rig to happen only in Q4? Yes, not on Q3?

Yes.

Okay. And in B-15, there is a B-15 well, which is already drilled. So would that be put on production anytime soon?

Not soon, within 2 years. So we have to do a development plan. That's about -- we have got 350 square kilometer 2D, 3D data. They are working on it. The data volume is substantial. The people are working on it. And we will submit a development plan to the Government of India. The water industry is only 40 meters. So we will be able to embark on installing some minimum facility platform and start drilling there. So we expect the duration of -- from the start date to end date should be about 2 years.

The next question is from the line of Riddhesh Gandhi from Discovery Capital.

If you could just highlight a little bit on this HPCL issue, what exactly happened, how they are claiming this. Because we read your presentation, it appears to be that we don't have much liability. Just if you could just highlight what exactly is happening with the HPCL issue?

So as you are aware, we have submitted -- sorry, not aware, I'll tell you now that COSA called crude offtake sales agreement. This agreement is signed on 3rd September 2025. In the -- normally in the COSA agreement, no one -- we don't guarantee any quality of the crude oil or the product liability thereon. In the COSA agreement also provides there is no consequential damages there. The title of the crude transfers at the outside plant at our FSO in Mumbai offshore. Then it gets into the tanker from that moment, the title risk and all insurable interest risk with HPCL. After 3 weeks, they come back and saying that the crude is having some chloride content, and we wanted to amicably settle all the issue with all our customers. So we found out then they are saying actually, there is some chloride content is more, then we have been in discussion with them. And from their side, they have to use the crude. And from our side, we have to realize some money. That is the position at the moment. We are in constant and continuous touch with them. And we are not liable for any cost claim under the COSA executed with HPCL.

No. So look, I understand that as per what you're saying is we don't have a legal -- a liability and that we have a strong case to claim the entire amount. But is there a potential, I mean, broader issue with regards to the quality of the oil, which might for future transactions, it impact us?

Absolutely no, Riddhesh. Absolutely no. The crude is a sweet crude, and this is a light crude. There is no issue on the quality of the crude from the reservoir. But I can share with 100% confidence on it.

So then some amount of the contamination would have happened along the way or there's some other issue because I mean, obviously, it's a pretty large claim which HPCL is making. So what would give us confidence that there is no issue with the crude?

There is no consequential claim for anything under the COSA. And second thing, we have sent another parcel to IOCL in the previous occasion. There is no issue thereon. So if any contamination occurred and the issue thereon is now being handled. Any contamination is also -- it is also an insurable interest. And accordingly, it is now being built. And we will let you know once we made any progress with them. Whatever the progress we made with HPCL, we'll keep you informed.

Okay. Sir, and last question is with regards...

Sorry to interrupt, Riddhesh. Please rejoin the queue for follow-up questions. The next question is from the line of Moksh Ranka from Aurum Capital.

So we have guided -- like we are expecting the Northeast grid to be fully operational this year. So how confident are we considering this has been delayed multiple times? Although I know it's not in our control, but just could you highlight how confident are we this time?

If too confidence level comes, there is already an investment of more than INR 10,000 crores. And already the Numaligarh to Guwahati connection is completed and commissioned. That is connected to the national grid at the moment. So now what is to be connected is from Duliajan to Numaligarh, okay? Duliajan to Numaligarh connection gets that one leg of the -- the first leg of the grid connectivity to the -- Eastern grid connectivity to the national grid established. And IGGL also planning another separate line. So that will take a couple of years. That means that the entire Northeast gas grid would be fully operational and linked to the national grid. So the time line, as we discussed and whatever the knowledges we gathered by talking to the people, it should be end of this quarter and some offtake improvement will take from the fourth quarter by all probabilities by considering the delays in the past and other things. It should be fully operational from the first quarter of '26, '27.

And we are doing -- we are taking a term loan essentially for CapEx for drilling new wells. So are we relooking at the CapEx considering there is a commodity price fall? And what returns are we expecting from this CapEx? And like how -- considering this is going to increase the risk in our balance sheet and yes, so just that.

See, there is no balance sheet risk there on. These prices are volatile. Now the transition fuel is the gas and the gas price, we are linking it to the oil price. Even at this price, our return should be more than 21% IRR, post tax, right? So we don't find substantial downside in this and nothing will happen to the company. These assets are -- so the transition unless the entire transition fuel taken place by some other renewable or other things, oil and gas industry will survive. As long oil and gas industry survives, this is reasonably a low price at the moment. So we should not find anything happened to the company or to the balance sheet and no impairment is expected.

The next question is from the line of Anubhav Goel from Cosma Ventures.

Sir, have we received the payment from HPCL? And I didn't understand to realize the sales revenue. I mean we have already booked it, right?

Yes, we have booked, we are yet to receive the payment.

Sir, we are yet to receive the payment from HPCL?

Yes. We have been in rotation with them. We will let you know actually once we received. We'll keep this as an information.

Okay, sir. And sir, this quarter run rate, can you share for Dirok as well as the five operational wells at Kharsang?

See, the run rate remains the same. Unless the grid connectivity on Duliajan to Numaligarh is there, we cannot expect greater improvement. So we are expecting that once the connectivity improves and the NRL offtake also increases, then there would be a sustained production without any disruptions. That's what I can say. Giving any guidance is -- it may not be appropriate at this stage.

And sir, the five wells at Kharsang?

See, that's producing about 900 barrels. All wells put together, the Kharsang production is about 900 barrels. But each well is contributing about 100, 150 barrels, 125 to 150 barrels on an average. So we continue to drill, we increase our production as such. So once the drilling is completed, then the wells are get completed, we'll hook up for production immediately.

But for gas, that will take some time.

And sir, the fixed well gas...

Sorry to interrupt Anubhav. Please rejoin the queue for further questions.

Just last question, if I may. So the gas flow out issue at the sixth well, the leakage of gas, so do you feel it will be resolved in the next few days or this can call for liabilities to us?

No, no, no. No liabilities there. We fully insured, we covered and except the deductions of INR 2 crores, and it will get resolved quickly.

The next question is from the line of Kunal Tokas, an individual investor.

Sir, am I audible?

Yes, please.

I have -- my question is asset specific about Dirok, B-80 and Kharsang. If you can give the daily average total cost of production and the 1P reserves of each of these assets?

The 1P reserves of B-80, right?

B-80, Dirok and Kharsang. These are the important assets for you, right? So the cost of production and the reserves, please.

See B-80, our cost of production is about $30 per barrel on an average.

That is including -- not including the FSO and the MOPU costs, right?

Including FSO and MOPU charges together.

Okay. I mean if you did not own them, even then you would be producing at $30? Or are you including the benefit of owning those?

We included the benefit of owning it because we are taking only the operating cost of this because the volume of production is too less. So it is mostly cost mitigation to the facilities owned by us. So in a manner that we take only the variable cost there and do it. And that is the way it is around $30. The 1P reserves, we already declared, it is about 15 million barrels of oil and about 40, 45 Bcf of gas actually.

Okay. And for Dirok and Kharsang as well, sir, please?

Dirok, we are expecting substantial volume could be added. And we are expecting the total still production -- it would be at least around 200 Bcf of gas. And the resources are substantial. So we will be unlocking substantial value from those block Dirok, at least it's reached to our rough estimate at least for 400 Bcf of gas, and a good volume of -- yes, that's our estimation. But by drilling additional three developments, we will get authenticated by a third party.

So these assets have a long -- very long plateau life, even at 50 or 70 mmscfd?

Absolutely, it is having a long plateau of -- we are expecting the life of the field will go for 20 years.

And your costs at Dirok would go down to 0.6, 0.7?

The cost of production is very low. It's about less than 0.75 per MMBtu.

The next question is from the line of Nishant from The Fellow Investor.

Am I audible?

Yes, Nishant.

Sir, my question is related with B-80, a hypothetical question. I know it is not true. If something gets contaminated from the part of crude and in case of emergency, then are we in a condition to drill the next block within a 1 year? And will it impact the gas production in case of B-80?

So see, this is -- the crude issue contamination has nothing to do with the development of the field or the block. It is no relation whatsoever, okay? We are embarking on our continuous production and continuous drilling. There is no issue thereon.

Okay. And what is the cost of production of crude and natural gas in B-80.

On an average, it is $30 per barrel of oil equivalent.

30 barrel per dollar -- I mean $30 per barrel.

$30 per barrel of oil, yes.

For gas also?

I mean it is a barrel of oil equivalent. Now gas is no longer a byproduct, it is a joint product. So considering the gas price therein, it is $30 per barrel of oil equivalent. For gas, it cannot be calculated separately. We don't calculate gas separately. It is an associated gas, it comes along with the oil.

[Operator Instructions] the next question is from the line of Sushil Lahoti, an individual investor.

Am I audible sir?

Yes, please.

Yes. As you said, this pipeline is connected from Guwahati to Numaligarh. My first question is how it is going to benefit HOEC? And secondly, what is the status of this DNPL line to be a common carrier? If it happens, how much it is going to benefit HOEC in terms of top line and bottom line?

See it will be increasing our volumes from, say, today around 15 million cubic feet of gas, it will go to, say, 45 million. So it will increase the volume by 3x more with the existing wells drill itself. And there would not be any demand constraint. It will go from offtake and go up to -- the DNPL line it comes by, say, end of December. And even if the worst come, it comes in the fourth quarter, then this would be our position. We will be able to make a threefold increase in our revenue on Dirok immediately.

Okay. Regarding my first question, sir, this pipeline connected from Guwahati to Numaligarh, are we going to get any benefit?

No, it is already a connected line. Now what is happening is they have to connect it with the IGGL line and some compressor station and other things are to be put in, which they are working on it at the moment. And once it connected IGGL line, it can go from -- it can take additional 1 million cubic meters of gas. So out of that, even a portion of the Oil India Gas goes into it and our gas also will -- our joint venture gas also get into it. And we will be able to reach at least 1 million cubic meter of gas comfortably, and we are targeting to go up to 45 million cubic feet per day.

The next question is from the line of Manan Patel, an individual investor.