Hindustan Oil Exploration Company Ltd
NSE:HINDOILEXP

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Earnings Call Transcript

Earnings Call Transcript
2023-Q2

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Operator

Ladies and gentlemen, good day, and welcome to Q2 FY '23 Conference Call of Hindustan Oil Exploration Company Limited. [Operator Instructions]

I now hand the conference over to Mr. Anuj Sonpal from Volarem Advisors. Thank you, and over to you, sir.

A
Anuj Sonpal

Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Anuj Sonpal on also Volarem Advisors. We have present the Investor Relations of Henderson Oil Exploration Company Limited HOEC. On behalf of the company, I'd like to thank you all for participating in the earnings call for the company's second quarter and first half of financial year ending 2023.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management.

Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is clearly to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Pandarinathan Elango, Managing Director; and Mr. R. Jeevanandam, Executive Director and Chief Financial Officer.

Without any further delay, I request Mr. Elango got will start with his opening remarks. Thank you. And over to you, sir.

P
Pandarinathan Elango
executive

Thank you, Anuj. Good morning, everyone. Happy to connect this all FY '20 earnings call. Jiwa, our CFO and Director is with me; Volarem Advisors, our Investor Relation adviser are also on the call. I hope everyone has received the updated earnings presentation. We also uploaded it on our website for their reference. As you all know, in BAT at block level, EC holds 60% through revenue sharing contracts. However, the services to BATs at Amlin with subsidiaries at 100% for [ Mopo ] and FSO. According these revenue owned by subsidiaries are consolidated. During Q2, the mobile offshore process unit continue to be on revenue more, while SPMFSO units was on revenue mode only till 14th of July, and BATF could export gas only or 14 days during Q3. The FSO and SPL were on downtime due to the repair of under base and the connecting host till 31st October 2022.

As we updated on 4 November, we have resumed gas sales from BAT post completion of Anders [ Ripa ] and reconnection of those to reverse. While we did not have to pay any penalty for not supplying gas since mid-July, GSPC reported that they are not able to find customers willing to pay $20 per MMBtu, which was the price we could realize in June. We have, therefore, agreed to adopt the market prices discovered and published by the Indian gas exchange on a monthly basis and the price for November 2022 supply would be about $13.5 per MB. We will be amending the gas sales contract accordingly, and we are currently producing about 11 million standard cubic feet of gas per day from 2 gas well. This allows us to deliver the full contract volume of 10 million and a cubic feet per day.

Our priority now is to focus on assuming production from D1 oil well. Now that the weather conditions at BAT location has improved, we will attempt to address the hydraulic league issue in the CRSC line, connecting B1 oil well to a sealant option. In this method, specialty sealant is injected to seal the weak area. We have consulted technical experts and identified the specialist U.K. company to carry out the operation. This will involve importing Selin and mobilizing dive support vessel and experts. We would make our best efforts to execute the operations in December. We will notify as well as the oil production from G1 is resumed. As we noted, since mid-July as the monsoon weather picked up, we have seen multiple connecting systems failure.

The permanent solution will require us to engage a repeated firm to perform a comprehensive engineering of the system, including all required analysis. We need to procure new floating and under buy hoses to withstand the roughness of the monsoon better. And this permanent rectification and replacement work is planned to be carried out during this fatter season. Moving on to Dirok. Dirok has performed well during Q2, both in terms of volume and banking. At volume level compared to Q1 average of 25 million standard cubic feet per day, we achieved average daily GAAP sales of 34 million standard cubic feet per day.

Further, the share of premium gas sales increased marginally to 45% and the premium gas sales, we realized a minimum $1 premium over the applicable government notified price of $6.10 per MB. At Dirok, our strategy remains focused on value over volume. We have initiated the site grading work in the difficult product segment for the proposed 18-inch pipeline that will develop gas to Duliajan Marketing Hub independently without relying on oil India pipeline network. This will enable connecting with the Northeast gas grid in future, significantly enhancing the market size for derange. In our other assets, there are no significant developments during Q2.

We are continuing the small volume of gas sales to deals from PY-1 because we commenced in May 2022. In [ Kambi ] assets, while production operations are continuing, final execution of ring fence to PSC for R2 area by government is still awaited. At Casa, normal production operations are continuing. Government is insisting the contracted parties to accept the government position on cost recovery limits as a condition president for PSC extension. Discussions are still ongoing between government and the operator. In other Northeastern blocks, [ Karan and makara ] the regulatory process of forest and environmental clearances are continuously being pursued with government in greater drop, block G&G evaluations are being progressed to release the substantial billing locations.

I now invite Jeeva to share the financials.

R
Ramasamy Jeevanandam
executive

Thanks, Elango. We report that the company made a total revenue of INR 81.69 crores in the current quarter against INR 70.19 crores in the previous quarter. In the consolidated account, it is INR 25.79 crores against INR 91 crores in the previous quarter. If we take the revenue for half year for 22.3%, which is INR 21.8 crores comparing INR 76.90 crores in the corresponding previous period. This increase in revenue is mainly from increase in gas sales and BAT gas sales from out could be in July for about 40 days. That is INR 82.8 crores, including the revenue one by [ MopanFSO ].

Increase in price of that and oil for the contributed about INR 5 crores. In the half year, we accounted 223, though the increase in the top line, it would not translate into profit due to shutdown of DAT for over 10 days since 14 to July to 31st October. Therefore, the stand-alone profit after tax is INR 57 crores against INR 74.21 crores in the previous quarter. In the half are accounted INR 477 crores and the corresponding previous period INR 29.11 crores. In the console accounts, the profit of the tax is INR 17.7 crores against INR 32.35 crores in the previous focus. In the half yearly control accounts INR 50 crores comparing INR 28 crores in the corresponding previous period.

The effect continuous production from BAT is inevitable to have an improved and sustained bottom line of the company. The total expense of stand-alone, including DDA is INR 75.2 crores comparing INR 35.98 crores in the previous quarter. half-yearly INR 11.1 crores or INR 2023 comparing INR 3.68 crores in the corresponding period. The total expenses in the control accounts, including DDA a INR 5.7 crores comparing INR 59. -- crores in the previous quarter. alter INR 164.79 crores to INR 223 comparing INR 47 crores in the corresponding period. Operating tax accounted for BT in the consolidated accounts for 2023, incurring more onerous, INR 72.3 crores.

Finance to in DDA, INR 33.6 crores, which makes the total of INR 7.6 crores out of INR 164.79 crores in the area accounts. The major end of expenditure is flowing through the PAT. The EBITDA in control accounts for this quarter stood INR 46.16 crores comparing INR 54.7 crores in the previous quarter. Halfway accounts for INR 229 crores comparing INR 42 crores in the previous period. Consequent to the commencement of production from BAT with the DSL effective both in November. And with the commencement of Royall and DAG, meaningful profit will be reported in Tampa, which is the top line of the company. As these success at caplets, revenue and cost mine are expected to be reduced substantially on Cummins [ Matas G1 ]. It's the fact that the cars are not lent production. Therefore, it is important to put on well on production at the earliest opportunity.

Continuous production from DIT field is inevitable to have a revenue for offshore installation of an FSO and [ Montilly-owned ] subsidies -- on full production from BAT with a couple of ongoing high oil prices and where the company can meet its obligations. Revenue mismatch is being addressed. The company is in the process of raising equity and debt capital to sort out the working cap releases and to embark on the development of dormant assets in the Western region and CY 1. It is committed that the GMP review has been completed for CY1 and locations were released. Thanks, Elango.

P
Pandarinathan Elango
executive

Thank you. We can now open the phone up for questions, please.

Operator

[Operator Instructions] We'll take the first question from the line of Mr. Riddhesh Gandhi from Discovery Capital.

R
Riddhesh Gandhi
analyst

Just to clarify on the EAP. You guys gave a clarification on the 3rd of November to the exchanges that the trials were on and that you would inform us when these sales would have started. And I think in the release end of the presentation, you've implied that on the 4th of November, sales that started. So I just want to understand, have the shares actually started? Or are the trials still on? And how should we be looking at?

P
Pandarinathan Elango
executive

Are sales is started.

R
Riddhesh Gandhi
analyst

Okay. Okay. Just a smaller request, sir, because you said in your press release also that you would inform the exchanges if sales would start and we didn't get the clarification until the results. So if you could just keep us updated would be extremely helpful. The other question is with regards to effectively speaking, a deer fund. So obviously, we had a whole lot of problems with the actual execution of the PAT. If you could give us now what is giving us the confidence that we can complete this by end of December, given effectively, historically, we've been inconsistent in actually achieving our target unit is...

P
Pandarinathan Elango
executive

Thank you, Riddhesh. Just to clarify, in our exchange really what we meant was that we will notify as and when 1 oil production resumes. That is what we meant. Because when we notified on for one, the sales has come in well. Any maybe we have not satisfied it properly. So what we meant was whenever we resume production from [ Denil ], we will release -- we will notify the exchanges. Coming back to D1, what we've kind of learned this, whatever connecting system that we've set it up where not able to withstand the deftness of the monsoon, that is the fact. What we have tried to do and successfully during the monsoon was to fix the problem through a temporary solutions.

When the weather improved, we were able to fix the connection for -- to resume the gas production. We've also found a solution that can fix -- hopefully can fix the problem from the oil as well. In terms of execution, which is not a complex execution, but this is whether the methodology work cannot need to be seen as such. So that is -- that is the explanation for where our confidence comes as far as the December time line is concerned. The execution of the [ Sealand ] action is not very complex, but its effectiveness needs to be tested on the after we invest the seats -- but as we explained in my opening remarks, the covenant solution will require an engineering -- [ co-engineering ], which would ensure that we upgrade the system by replacing some of the connecting courses, et cetera, to withstand the monsoon weather next month. So overall, our expectation is now that the water is reasonably good, we don't anticipate any pin. I don't want to...

R
Riddhesh Gandhi
analyst

To be clear. So effectively, if I understand what we will be able to complete in December is effectively just doing sort of a quick fix, if you will, to get the production going. And then we will undergo a more a longer process for a permanent solution? Is that lessening right?

P
Pandarinathan Elango
executive

If this solution work, which we believe it will work, and that is apartments. There's no other changes of that.

R
Riddhesh Gandhi
analyst

Okay. And in the event it does not, then.

P
Pandarinathan Elango
executive

Then we'll have to go back to a more problem in solution, looking at other engineering solutions.

R
Riddhesh Gandhi
analyst

Good. And then if you have this level of confidence around being able to complete this in, I mean, December, which tend to given effectively increases in prices in SAM, which have started from Q3 onwards, but plus effectively tie gas on board and hopefully B12start, is there then actually really a need for an equity raise? Because, I mean, I mean, idly speaking dilution at these levels would not be Irene?

P
Pandarinathan Elango
executive

I'll ask Jeeva to answer this question.

R
Ramasamy Jeevanandam
executive

Riddhesh, we are running an oil and gas company, and we have that asset. We have got 11 assets in the company. So we are not running along BAT. So whenever we raise capital at an up price to put all the blocks under development and to monitor itself looks at the current high oil prices. That's why we will be raising in equity and bias of the rate, considering the development opportunities, which you want to do.

R
Riddhesh Gandhi
analyst

So to be clear, are you monetizing actually, the oil block at these prices? Or are we raising equity at the company level?

R
Ramasamy Jeevanandam
executive

It's set in both assets. We have already taken an approval for raising debt as well as equity as appropriate further set the price, equity should be at a price and they should be at a cost.

R
Riddhesh Gandhi
analyst

Got it. But there should be equity at the listed entity, I'm looking at exiting at the asset level, which is what you at indicated.

R
Ramasamy Jeevanandam
executive

No, no, it is not stated been is and their companies, wherever they've got a higher participation, if you wanted to bring a partner, they will bring the partner there.

R
Riddhesh Gandhi
analyst

Okay. Okay. So we are valued.

Operator

Sorry to interrupt, Mr. Gandhi…

R
Riddhesh Gandhi
analyst

Yes. Are we done.

Operator

[Operator Instructions] We take the next question from the line of Mr. Sivasankaran from Antique Limited.

V
Varatharajan Sivasankaran
analyst

A couple of questions on the cost of repair after the September month. So October sofa in November, whatever we have spent and what do you plan as an estimate for fixing the D1 well as well. So if I were to look at the overall cost or having like a normal production in DAT, what is the cost we are looking at before the normal production starts.

P
Pandarinathan Elango
executive

Yes, this one we can -- the cost of repair, which we are anticipating for the D1 well should be in dollar of around $250,000, roughly about INR 2 crores. And the expenditure incur for fixing the repair in the November, which is also in the order of about INR 2.53 crores because this was a margin, we had to have a 8% period. So it was about INR 3 crores. Now the intended result to be carried out for the G1 should be around INR 2 crores.

V
Varatharajan Sivasankaran
analyst

Fair enough. And in the case of subsidiary, if it is possible to give us a top line and EBITDA for last quarter?

P
Pandarinathan Elango
executive

It's too much to predict at this stage. We wanted to put the field on production. And it's having a 3 combination at was. We have to put all the well-fund production. And second thing, we wanted to know what would be the cash price, what would be the oil price. So I leave it to you to make a rough number of computations be.

V
Varatharajan Sivasankaran
analyst

No, I was not asking for a talking about the subsidiary in 2Q. What was the top line...

P
Pandarinathan Elango
executive

Q2 of for the public sustained...

V
Varatharajan Sivasankaran
analyst

Could...

P
Pandarinathan Elango
executive

That is the difference between the...

V
Varatharajan Sivasankaran
analyst

Say it's a different booking...

P
Pandarinathan Elango
executive

You mean in control and incentives?

Operator

Our next question is from the line of [ Mr. Rohit Potti ] from Marshmallow.

U
Unknown Analyst

So just to continue on BT. So Don, from what I understand, if it works, will be a permanent solution. And B2 right now is a temporary solutions. Is that correct?

P
Pandarinathan Elango
executive

I think, [ Rohit ], I'd like to tell that because there was a leak we got fixed. Now what has happened that we don't have a spare host with us at that point in time. Now we would be pursuing the spar host for the [ under baswell ] as the floating that we will be getting stocked with us. Even if there a subset from mix thereon, we will be able to use the new host immediately. That's a large offer. That passed around $250,000 to $300,000. Now we'll be placing an order for it and get it on board the vessels.

U
Unknown Analyst

So this is -- you're talking about 2, right, so the gas will...

P
Pandarinathan Elango
executive

No, no. But what both the well 2 and 1, both have an all production. So to have a continued production from the field, we need to have the accesso bearing and as elected Barco and the floating goes. So there was a problem in the Amputation was, which we fixed it now, but now we will be having a spare host, ecu and ready if any subsequent problem matters that we will be able to install it.

U
Unknown Analyst

Understood. So just -- so there's a little bit of confusion because in the AGM, it was mentioned that we are looking for a temporary solution in B2, and we are procuring some additional materials which have -- which requires 6 to 9 months to procure it because of supply chain issues or delay -- I mean, because it takes time to produce that particular material bring. So -- is that -- does that situation remain? And follow up to what you said was if there is an issue in the next monsoon it will be a similar issue, right, where in the range, we are not able to change it?

P
Pandarinathan Elango
executive

What we are planning as such, this will be continuing according to us. And with any problem our -- and before the month of May, we will be changing uteruses -- in a way that we don't want to take risk with the mark.

U
Unknown Analyst

Okay. And this new house that you're talking about is -- I mean it's the same hole that we've put right now? Or is it a option.

P
Pandarinathan Elango
executive

It is a different type of process, which is being engineered in a manner that suits to our requirement by a company [ Dudalina ] still in the work on it. Once they come out with the specifications, they will place an order for...

U
Unknown Analyst

Perfect. Okay. So this was helpful, sir. And just a couple of questions on the capital raise. So the aging it was mentioned that in mid-December, I don't remember the date, but somewhere in December, we are looking to close the equity raising and maybe some amount of debt pricing as well. So I was just trying to reconcile the cash flows with the requirement for funds. So we have Brock, which is functioning well and providing us a lot of cash flows. And we have even also providing cash flows with the due to providing cash flows and also will provide cash flows.

And these still will provide material cash flows along with the subsidiary. So if I could understand this better. So the cash, the capital raise, is it primarily going to be for expansion? Or is it going to be for maintenance of -- or is it going to be for BAT, repair or any other statutory payments? Because I remember numbers of 75 and 150 that you had shared for statutory payments if I am not mistaken. So if you could explain further on how much cash we need exactly because it seems like the operations are entrain will dentate considerable amount of cash along with Dirok?

P
Pandarinathan Elango
executive

I think Rob is the further working capital issues, and we need to have money for expansion by drilling basis. We can't keep the assets damn. So we're equally conscious about you raised the issue on the Ag itself, but we are really conscious about the dilution impact. At the price only, we will raise the city. And at the same time, we are endeavoring to raise some debt in such a manner to overcome the working capital issues. Then with the new capital, we will share that will go only for the expansion of the... Developed number -- the development of the assets, which request on your marginal capital like PY.

U
Unknown Analyst

Okay. Okay. Understood. And we expect to happen...

Operator

Sorry to interrupt. Sorry to interrupt Mr. Potti, may we request you to return to the question here, sir, for your follow-up questions. Other participants waiting for their time. We take our next question from the line of Swechha Jain from ANS Wealth.

S
Swechha Jain
analyst

Actually, I just need a clarification. I think I joined the call late and we have missed it. I think Sabre was asking about confirming the sales in Dan well, right? So the gas sales have started again, right, from 4th of November is what I wanted to understand.

P
Pandarinathan Elango
executive

Yes. Gas sales have started from 1st of November. In our announcement, we only mentioned about we will notify again as and when the oil production starts.

S
Swechha Jain
analyst

Okay. Okay. And sir, next clarification, actually, a little bit of understanding, I'm a bit confused. I think what our planning now is the temporary fix has been done, right -- so now we are going to do an additional host for which we are going to place an order with some company in Dubai. But I think you were also mentioning that we are planning to do some permanent fix and for which we are tying up with a U.K. company. So I am a bit confused. Like are we looking at a temporary solution right now? And then we're going to work towards a permanent solution or what we will do in December that will be the permanent solution. So and this confirms as to how we want to deal with this.

P
Pandarinathan Elango
executive

Thank you. Let me clarify for the Minister of everyone. What we've observed is the system what we have set it up would not withstand the weather of the monsoon people as it will calm down, we have fixed the gas sales, and we will fix the file well also with the solution. And we are confident that this solution will work during the fragile period. And before that, as you was explaining, we will pick our retail and materials, and we will do whatever inspection required to, to add the systems to withstand the next month, that will involve tails engineering, certain level of spas and processes based on what are the failures of the uses. Hope that clarifies.

S
Swechha Jain
analyst

Okay. Okay. So the U.K. company that we are looking to engage, what will stop that work on? Is that work on the B2 well because of if you're not able to start oil?

P
Pandarinathan Elango
executive

No. Both the wells for both oil and gas to flow through the -- first of all, I think we need to understand that both the wells produce a certain amount of oil also. The gas well also produces a certain amount of oil, whatever oil that we produce need to be exported through the protein storage facility that we have in the field through the SPM to which need to function through the connecting doses, right? So these are very critical systems for production from age of the each. So on the U.K. company what we mentioned was that the U.K. company as a specialist specialized sealant, which is injectors will see the lead areas. That is what we are going to do in December -- because that is then -- the system be function. Now over the next marlstones we just want to ensure everything is infected thoroughly for the -- to withstand the motor, any changes, any replacement that needs to be done there. So that we get ready for them.

S
Swechha Jain
analyst

Okay, okay. And the total cost that you mentioned was approximately INR 5.5 crores, right, INR 215 crores, INR 3 crores to fix in the repair, and then you are going to spend additional INR 2 crores.

P
Pandarinathan Elango
executive

Correct.

Operator

The next question from the line of [ Manan Patel from Irawa Capital ].

U
Unknown Analyst

Congratulations for putting B2 back online. Sir, the first question is, if I understand correctly, you mentioned that GSPC, the sales contract with GSPC has some changes in the pricing and the 22% of oil, which they bid has now changed to 1 month price of ICA. -- is that understanding correct?

P
Pandarinathan Elango
executive

For MPS, the -- what we have agreed with the GSC is in the Indian Gas Exchange, the prices are discovered through a competitive process for monthly sales, weekly sales, daily sales. We agreed that we will adopt those prices to govern the sales in the future. So what we agreed it is exactly what you said.

U
Unknown Analyst

So does that not receive the purpose of e-auction that we conducted. So GSPC might have built extra and got the contract and now they are saying that they cannot sell at these prices. So wouldn't any other player would have been ready to -- like it is at a substantial loss almost of $8, $9 to us at this point. So isn't that like a problem for us? And does this result in renegotiating contract of BA with the subsidiaries for the operating costs as well. So if you can clarify on this.

P
Pandarinathan Elango
executive

On current, what we did to the e-auction, we went into a 2-year contract with GSTC during the first year, both the parties we agreed that the contracts -- gas sales contracts typically have a provision called Today, which is if the buyer is not taking the volume, we still need to pay normal standard is 7% on an annual basis. And if we don't deliver the volume, we need to pay analyst. So the pay or supply or pay or the corresponding classes.

So when we end with the auction, we shifted out there that in the first year, because we are aware when we commission a large afford facility, there will be keeping problems. So we put that there will be no Car payor no supplier pay obligation in the first year, which means both the parties will do really in over to supply and take over. So we are in the first year. At the end of the first year period, which would be in April 2023 until March 2022 -- sorry, 23 the first year continues from April 2023, the second year counties comes into picture.

There, the obligation for them to take the volume, 2% on an annual basis as the committed price comes into force. During the first year was the 5 years. So what has happened in the flip side is because we did not supply from mid-July to in October, we didn't have to pay any canal to GSPC because of that protected us. When we went back, VSTC is not a consumer. They're only an aggregator. They said, look, at $20, there is no consumer in India now willing to take the best.

Therefore, we can tell it to anyone we want. We thought the best way to deal the situation is take the price of the exchange or I can go to the exchange and get the market prices, but we agree on this, and we will see we've got options to raise the volume after the stabilize to alternate customers also or get to a point where we will see how because we'll see how the market prices play out, ultimately, as a company, we cannot expect more than what the market is willing to do.

U
Unknown Analyst

Understood, sir. That's very helpful. And sir, second question is, so there was a substantial jump, if I noticed from your annual report in other financial liabilities, so almost INR 90 crores. And then there are other payables of INR 57 crores -- so these are entirely new items on our balance sheet. So if you can help us understand what are the things for.

P
Pandarinathan Elango
executive

Yes. This whole in this is basically the working optics and we also set some of those liabilities to the financial liabilities, which is a long-term borrowing, which is any -- because our HDFC loan, which is let period of 17 months, 18 months out of the 12 months has to move into the from long-term chart down. So that is where the short-term liabilities are more actually in that. Other than that, I was some of the working capital issues, which we have to address, that is where the liabilities to current liabilities are more…

U
Unknown Analyst

Okay. Okay. And that will be largely taken care from the cash flows that you -- or at raising that we do -- that you explained, right?

P
Pandarinathan Elango
executive

I think I agree there is a working capital mismatch. There is a [ carton renu ] mismatch, which you have to be the corrected.

Operator

Thank you. We take the next question from the line of [ Mr. Karan Meta from Mera ].

U
Unknown Analyst

So I just wanted some clarification related to permanent provision. So any major challenge that you foresee while...

[Foreign Language]

Operator

[ Mr. Karan ], please go ahead with your question, continue.

U
Unknown Analyst

Yes. Yes. So I just wanted some clarification related to the permanent solutions. So any major challenge that you foresee while implementing the permanent solution?

P
Pandarinathan Elango
executive

Not -- I think the word temporary and permanent got created some confusion. What -- all we are trying to do is to ensure the system performs without any failures, both during fair-weather window period as well as the rough monsoons. So based on our initial experience, whatever we have created in the first time could not really withstand the richness of the monsoon as weather improved, we were able to fix some of the issues and bring one well on production. We will do what is the right technical solution to gain the Atwell on production. Then we will -- before the next monsoon comes, which is typically May, June. Before that, we will ensure that all other replacement or certification engineering is all perform. So that the facilities are ready that is fully monsoon to handle the production level.

U
Unknown Analyst

Sir, I just clarify once again. So are we quite confident of the outcome while implementing the permanent solution. I got the temporary solution part. After we implement the permanent solution, as we call confident of the outcome.

P
Pandarinathan Elango
executive

Obviously, in when we choose the solution, we do consult the experts and take their recommendation and implement, right? So unless we are confident we will not choose an option.

U
Unknown Analyst

Okay. Okay. That was helpful. And sir, just wanted some details on the progress of the fundraising activity that we win to conduct after the AGM? And also one clarification that whether this fundraising will be on company level or field level?

P
Pandarinathan Elango
executive

On any equity ratio could be only at the company level. And that's what an for -- any debt raising is at the company level, both at the company level and the -- as a running aisle and their company, wherever we have got more participating in this, which we want to dilute and reduce our risk exposures at asset level will be during the farming as of the port -- at the right price.

U
Unknown Analyst

Okay. And so we have begun the -- so have we found out the investors, I mean, like if you can throw some light on the progress of the fundraising absolutely.

P
Pandarinathan Elango
executive

I think it is a plateau and it will continue at the moment. So as long as we read some conclusions, we will let you now.

U
Unknown Analyst

Okay. And sir, lastly, if I can squeeze in one...

Operator

Sorry, may I interrupt [ Mr. Karan ]. May we request you to return in question queue sir. We'll take the next question from the line of [ Mr. Teki Shah from Unique Star Grouping ].

U
Unknown Analyst

Of confusion is there between the investors for permanent temporary. I think one to clarify one is like your D1 activities line issue, which was supposed to be replaced for the Devon oil flows, which was being pressure. That is one part, not connected with a weather window. And second is postbus connecting to the -- from the manufacturing of oil to your storage. There is a different part. So we should have still canceled over there. So if you can through proper light on that, people all get addressed. Okay.

So the problem right now, what you are facing is your oil, which is to be shipped from the manufacturing to the ship dead line connecting pipe that is a problem. Now that is getting sold, what I'm understanding by ordering new and temporary, which is done. Now already new I expect from your conversation is, it will be there before your month of May. It is still not order under purchase of order, but you will receive it by the month of May, and you will pick it before your weather window gets over. And can you throw some light on the [ PenEquity ] line, which was supposed to be replaced by getting it on the surface and replacing some parts, and again putting it back, if you can so this is my first question, please.

P
Pandarinathan Elango
executive

Thank you Mr. Shah. Let me answer the last part first, which is the D1 line. D1 line as you rightly observed, had a pressure loss the pressurization is required to keep the well on open condition. The pressure was not holding and we did some driving identify there is a hydraulic pressure loss. Now there were 2 solutions for that. One is you listed and completely replace the line. The other, what we have found from the market is to inject a ceiling that will see the weak area because the leak is very, very minor in nature, and it is high-bar. So after consulting expert, this solution is going to be working in other parts of the world, and we want to implement that solution in December. We identified the form.

We identified the chemical, we consulted the expert, we will do that. Once that ceiling fixes -- the net is stick through the sedan option, then that will hold. There is no reason for any kind of replacement the line at top. When the oil production comes back into stream. Now the other part of your question, which is the whole FSO SCM system is required for both the wells. It houses got damaged and it has been fixed now. So you can now take care of both the well as and when bothersome production board. One of them is in radio production part as soon as we level comes on production mode, the FSO SCM system is fully functional... For that tariff...

U
Unknown Analyst

So that will take the pressure of that 4,000 barrels of oil which we are planning to produce, Am I right?

P
Pandarinathan Elango
executive

Correct.

U
Unknown Analyst

Okay. So fine. And if let's say, in December, the first solution does not work. Do we have the chance to get that uplift to the subsurface and replace the part and agent it back before the month of June.

P
Pandarinathan Elango
executive

Yes, we will be able to do that. Do that.

U
Unknown Analyst

Okay. So I hope that's all -- everybody is proof not that even well will start -- and the second question is, sir, now the gas price Indian gas actually what you said. Now that is gone down to 13.5%. If you can share what is the average price for the last 4 or 5 months, I mean what will be the average price that we normally will get from this thing, like $10, $11. What is the history in close like to we understand from where price to what price we'll be able to get the money out of Help you can throw some topline what epigenetic.

P
Pandarinathan Elango
executive

I don't have the data on the last 4 months of exchange ore. But overall, currently, the market is -- there is a volatile market. There is some excess volumes in the market. Once that gets absorbed, then the prices is expected to go up further because the government notified price itself is at $9 now. And we are seeing a general premium of about $5 more than the government prices at the exchange level. Now exchange also in the last 6 months only good volumes are being traded in the tea after GC command to the exchange. So over the next 6 months, we will get a better idea on how the prices would be. But having said that, for the remaining, we are only concerned about the remaining period between now and March 2023, and we are delivering to Gujarat, which is the most premium market.

U
Unknown Analyst

So basically, we are paying all the Gorman notified price on an average will get 4 to 5 million. So for the next 6 months, I think the prices picked around $9 correct. So at around $13 to $14 we will get report.

Operator

We take the next question from the line of [ Rikesh Bari from Absolute Advisor ].

U
Unknown Analyst

So just firstly, on the IT side, on the D2. Since we had given the awarded the GSTC based on the options. So wanted me that the second best person who would have been deferred rather than accepting a lower price of $13 or the market mechanism trends?

P
Pandarinathan Elango
executive

The -- right now, the participants in our action mainly aggregator of the gas, let's say, 3 partisan or bid at a high level. The last 2 participate can disclose, they were putting competing bids was between GSTC and G. And both are aggregators or as a or actual consumers. One of the important thing for us is to ensure there is a continuous production and offtake that takes place. That is -- that reliable offtake will be ensured and by aggregator who has capacity booked our ability to book capacities in days. If I reach one individual consumer, will be exposing our steel production, let's say, that consumer plan shadow. So I'll be exposing it to the plant. So our persons will be to aggregate it. Now between both these aggregators, just raise the wordings on the market prices. We are commence that the exchange discover the current market price in India through a very wide participation. The volume traded in the exchange is almost 10x of our volume. After figuring out all that only, we agate arrangement.

U
Unknown Analyst

Okay. Second is regarding B1. So I mean we are still under process means we have to place the order for the D1 ratification as such.

P
Pandarinathan Elango
executive

We will place the order. We are in the process early now.

U
Unknown Analyst

But we are confident that it will be ready by December and Second is relating to our…

Operator

Sorry to interrupt Mr. Rikesh. May we request you to join the question queue sir. We have other participants waiting for their turn.

U
Unknown Analyst

Okay. I’ll done with it.

Operator

[Operator Instructions] The next question from the line of [ Nirbhay Mahawar ] from N Square Capital.

U
Unknown Analyst

We have had close to 1.5 years of delay in -- and I mean, delaying offshore oil projects is a very normal thing. So I'm not disappointed with that. But the way management has handled the delay. We talk about it is, we talk about working capital challenges. And the -- I mean the whole approach seems to be very short term if it shows lack of commitment of management as well as good. So is there any gap in my understanding? And why is this happening? Because the prices we are getting is definitely where is going to be radon what we had anticipated .

P
Pandarinathan Elango
executive

Those are very strong words. I can ask these are your perception, so I will leave it at that.

U
Unknown Analyst

But -- I mean, short-term working capital challenges to execute an offshore oil project seems very, very short-term approach. Why are we not capitalizing our balance -- these delays were very much expected. I mean it can happen in any of the – credit -- so RP not fixing we're not adequately capitalizing our balance sheet -- any word on that.

P
Pandarinathan Elango
executive

Balance sheet is fully capitalized adequately capitalized as required and an unforeseen situation comes out of the revenue from INR 11,000 crores asset for 4 months, has that got some mismatch. The mismatch is being mattress. If you call that is in competency -- and so -- talking out in reception -- that's your perception, you can leave it to that.

U
Unknown Analyst

So I'm not talking about in competency, sir, I'm just saying that it should lack of commitment. Is there any -- I mean are we missing as an investor when we are so optimistic about the opportunity, why Board and management is not so permitted. That's what I’m trying to understand

[Audio Gap]

P
Pandarinathan Elango
executive

Let's move to the next question, please.

Operator

We take the next question from the line of [ Mr. Amit Mandale ] from Robo Capital.

U
Unknown Analyst

And my question is on the equity fund or sir. I think earlier participants had asked the question and probably the response was already sent. But since I have an apology I asked one bit again. The equity funds that you're bringing and I think we appreciate that the prices are better in terms of realizing the asset value of the cloud. But is there a possibility that we could dilute at the block level or is it technically or reasonably not possible?

P
Pandarinathan Elango
executive

The dilution at the block level is an ongoing process and the right poise right things, we don't have any both are so greatly which we hold around only one gap we hold a maximum of 60%. Another one exploration block people 100%, another one producing blood and -- these are the blocks are the -- so we'll be continuously discussing with the people and the appropriate time [ double-tric ] we will be able to get a forming partner. Similarly, we will go far or also [ Pamina Parmas ] a regular process. So it cannot give a time line, and we cannot say that this is being done now. But at the same time, to correct the mismatch in the working capital, we will be raising debt as referred for it. And to embark on a development program, we will be raising equity go.

Operator

We take the next question from the line of Mr. Rohit Balakrishnan.

R
Rohit Balakrishnan
analyst

Am I audible?

Operator

Yes, sir. Sir…

R
Rohit Balakrishnan
analyst

So sorry to belabor on this point again, but on this point on you taking a quick fix and then just to clarify, I know you've clarified it well. But I think in the opening remarks, you mentioned that this to be -- you are also appointing a reputed engineering form so that there is no -- so that we can evaluate and give you a report so that the next monsoon systems and processes are, we are better equipped. And I think in the AGM also you had mentioned this -- and I think we've also given the name of one of the contractors.

So I mean -- so can you just clarify this is in addition to whatever you mentioned, this is in parallel to whatever you may in terms of stealing the approach that you're taking for D1 and the other thing that -- I mean, the overall approach to rectifying D1 and undergoing holes that you are planning to replace it completely. This is in addition the entire process. Is that understanding correct? Or…

P
Pandarinathan Elango
executive

Correct, in addition to that.

R
Rohit Balakrishnan
analyst

And what would the cost entail on...

P
Pandarinathan Elango
executive

Replacement. In fact.

R
Rohit Balakrishnan
analyst

No, no, I'm saying so this consulting engagement that you are planning to do that to get to an overall view, what would be the cost of that? Any idea right now?

P
Pandarinathan Elango
executive

Overall, we have that on one small unit hydraulic force issue in the donut is a public asset score of about INR 10 crores are there, which gets connected to the subsidiary. Out of the 10 post 1 crore is net that goes to the [ adcom ] to subs a safety well, right, that we are going to feature previous payment. That is a one type of a job on the -- now when we come to producing from the D1 and D2 well, we need the floating stories offshore. That is our effort. So it's duly connected with is a single point model. Right. So single point mooring is connected to the pipeline in manifold than Andrea force, right?

And from the FDM, there is a flow in to get connected there is. Now what has happened, there is a number by below the -- on the end of the Antebi, there was a small lead to avoid any issues. We set the production down, then we repaired it. Now what we are planning, we will be having a should substantially on PRB. This will be in these that is 30 meters each of that. We'll be adding a number of pieces, which can be assembled and get it into year growing lots as well as Amdocs. We will pursue and stock it there. which industry or the maroon to inches abundant casing, we will replace it. And in the best canes, will have another 5 or 6 of the small pieces of poor invite, which will get connected to avoid the longer shutdown has happened in the past.

R
Rohit Balakrishnan
analyst

Right. So you mentioned that all these costs somewhere around INR 6 crores, right? I mean sorry.

P
Pandarinathan Elango
executive

That's -- correct...

R
Rohit Balakrishnan
analyst

Correct. And I'm asking, sir, we are also caring some in general overall overview of our readiness and overall preparedness of the overall systems for the next month. We are going for engineering for -- what would that cost be? What I'm trying to understand...

P
Pandarinathan Elango
executive

The engineering form, it will be more or like let's is a job, which we'll be giving it to them, right? If they put that manner, they will be charging an basis, right? Mobile is a person to come to India and the person in India for the day as such, we'll take in 2 $2,500 per expand. For the smaller low-quality person, I mean low qualified person or the inexperienced or not, I say it's not the right word called in experience. And the Jenga comes along with it, it will be casting around $700 to $800 per day.

So normally, the normalization expert, we will be having about the combine 2 to 3 guys, which will be casting about $4,000 a day when we in India. And similarly, when he does a review work at TS Place in Dubai, it will be a little less at fast and it depends on the manpower we actually spend on. This is not going to be a high cost item. The total exposure between as around $100,000. The fees can you assume in a year, it will be around $200,000.

R
Rohit Balakrishnan
analyst

Sure. No, understood. That's very clear, sir. And sir, on...

Operator

May we request you to come in to questions queue, sir.

R
Rohit Balakrishnan
analyst

Ma’am, this was -- my questions were -- I mean, there was just one follow-up, if...

Operator

There are waiting in the question queue sir. We'll take the next question from the line of [ Mr. Manohar Toshi ].

U
Unknown Analyst

Sir, kindly, any update on the PY-1 extension and feasibility study that we were to conduct before.

P
Pandarinathan Elango
executive

One extension is there up to 5 of December. And before that, we will try to secure the faber extension of the block. And we have -- we carried out an extensive G&G review, and now we have got locations ready and on some -- when we are having adequate capitalized, then we will be empaneling operator.

Operator

We take the next question from the line of Mr. Shankar Gopalakrishnan from Motilal Oswal Private Equities.

S
Shankar Gopalakrishnan
analyst

Mr. Elango. Am I audible?

P
Pandarinathan Elango
executive

Yes, Shankar, please.

S
Shankar Gopalakrishnan
analyst

So on one, you said that we would do the expansion only after raising equity. Did I get it correctly?

P
Pandarinathan Elango
executive

I've explained to you that we will be raising some and we have to have an internal approval back to meet it to the entire expenses, which cannot be attached shorter term. So as soon as the raise equity, we will go in it.

S
Shankar Gopalakrishnan
analyst

So that can be an investment of about INR 200 crores, INR 300 crores?

P
Pandarinathan Elango
executive

No 20 crores, INR 300 crores. We initially start with about $24 million expenditures followed by another 26 million. That is both the million. But the initial we start with the fact well, that would be about $8 million.

S
Shankar Gopalakrishnan
analyst

Sorry, can you please I didn't hear you well.

P
Pandarinathan Elango
executive

$8 million.

S
Shankar Gopalakrishnan
analyst

$8 million from the first Okay. So the earlier investment which you made in those 2 wells have they been written off?

P
Pandarinathan Elango
executive

So that has paid off as such, but that is on deepening the existing well. Now this would be a new well at the new -- in an area little other than the old bond assets. So this would be our value creation for us for getting back the money invested in the block, which is in the order of around $30 million, $30 million over the 2 years.

S
Shankar Gopalakrishnan
analyst

Okay. And this, therefore, can take a couple of years.

P
Pandarinathan Elango
executive

Yes, we can think about a couple of years to get -- each will take about 30 days drilling. So if you continue as drilling back to that, it should be about 3 months. And installing facilities would be taking about 6 months in between the weather window is there another 6 months, total about 18 months project.

Operator

[Operator Instructions] We'll take the next question from the line of [ Mr. Sudan ] from Optimum Securities.

U
Unknown Analyst

Can you hear me? I just wanted to ask like once we have got the wells running, and we are going to be experiencing all the items in the P&L. Since the gas has already started flowing in, do we expect like breakeven at even $13? Or do we see that till the time oil doesn't start we probably operating at a loss... Operating at we posed 1,010 million cubic feet of gas, with an isle of about to say, 350 bar 300 barrels, it would be about $12 per MMBtu at the block level at the DAT level. And if you take the revenue, which we will be generating from our FSO and Nobu, this should be reduced to $5. In effect, at the consol level, we'll be making the contribution even at the $14 evening by only 1 well production. That is a deter... Got it. So by just operating the pen as a whole, like we were initially saying that we can break even on BAT, considering that this but tall. So just wanted to understand in terms of cost and income, let's say some before we the oil in, is it still breakeven? Or are we probably going to in the oil and in come online will probably be operating at a lot...

P
Pandarinathan Elango
executive

And I've explained to you that at a consolidated level, because the majority of the facilities are owned by us, that is an FSO and Mopani. Our operating cost, that is actually the marginal cash for this production, that is $5 -- so anything beyond that, I have a contribution mark...

U
Unknown Analyst

Right? So even if the gas cell that has started from the next quarter onwards, we should see a higher bottom line also...

P
Pandarinathan Elango
executive

Absolutely.

Operator

We take the next question from the line of [ Mr. Varun Agarwal from HS Capital ].

U
Unknown Analyst

Sir, can you also clarify that with the new pricing that exists for Brock that was around on 1st October, what will be the revenue and contribution from Dirok on a quarterly basis?

P
Pandarinathan Elango
executive

See any increase in revenue, you can assume that would be the additional revenue to us up to 60%. The balance goes as to the priority and other sets to the oil produced them. So if you look at the previous price of about $7, and this is about $9. That is a percentage increase. In that, you can take 60,000 with [ tecan ] division. Additional [ radcreated ] over -- it goes this is 2 areas, continuing uptake from the customers there. So that is to some extent seasonal at one caterer 10 million.

U
Unknown Analyst

Understand. That is helpful. And just to clarify on VAT, you mentioned that you have a bit with the Cement in December and then the permanent solution up and running by day. So for the permanent solution, have we identified what will be the comment solution? Or that is something that once that engineering from represented tons and we do the study and then we will figure out what the solution is? Or is it fairly straightforward to do it? And second is around that if the parts are costing only INR 6 crores, INR 7 crores. And given we have so much capital stack here, why do we dust order the part. So have you not ordered the past in advance since a while back and have those parts ready to the fins earlier, maybe we have tried and it's a long lead time, but just wanted to clarify that.

P
Pandarinathan Elango
executive

Thanks for this question. Actually, we would like to clarify that see in Ashore and subsea any lead comes and the lead is to be test. Now the need is to be addressed, go into the deeper water, but through the subsea driving team and get it fixed and another one where the leaks smaller one, like a hydro little fleet like which we apply some sealant and see that PLM goes, it goes for it, right? So Brazilian cost machine, it is about $30,000. But to have the work at the subsea, you need the dispos vessel, right? That cuts a smaller rumor -- that also in the overall game, this is smaller than. But monsoon is not in our control. So once the monsoon goes up and we have a better weather, we can get some die support vessel and go down and take it up.

And in offshore, whatever the situation we do, whatever the retail we carried out, most of them are permanent at the point in time. Subsequently something leaks on is, we have again picture up. That is the nature of the business per se, and we will do that. But these are the not host repair or something is not an unusual to the business. This is normal to the business. As you're rightly observed. Now we will be having enough stock of those hosts in the FSO and as well as in AGP to run a one and or some of the material with engaging with is the right consultants to adjust when a situation at tester.

U
Unknown Analyst

On the permanent solution and the permanent solution has been identified or we will be identifying it in the next...

P
Pandarinathan Elango
executive

This reaction by solutions, which we work on it is more or less permanent there. at that point in time. So there is nothing called any small becomes. We have to look at whether we put a sealant or we go and tighten the leaked as change the exists and implicate have about 10 small houses. If one host leads on it, and we have to go and fixable. If are the courses like there is a problem, we as obligate, but we have not reached to the stage asset.

U
Unknown Analyst

So you're essentially saying that the permanent -- talk a...

P
Pandarinathan Elango
executive

What you can assume that the fixation, which we are going to make is a permanent one.

U
Unknown Analyst

Understand, which is essentially keeping a start of [ selene ] and holds to solve a entente...

P
Pandarinathan Elango
executive

Problem on -- we wanted to have a one store cost of about 225 meters with -- and we are going to procure at a cost of $250,000, which will be on board the vessel to address the next any sector happens...

Operator

Sorry to interrupt, [ Mr. Varun ], may we request you to return to the question queue. We'll take the next question from the line of [ Mr. Josh Sao ], individual investor.

U
Unknown Attendee

What is the expected top line after December from the D1 and D2 and Brock, if you can throw some light approximate in terms of Indians.

Sir, what is the top line from your DAP and the Dirok after December...

Operator

Sir, the disturbance is from the line of [ Mr. Shah ] muting in management, sir. You may go ahead with your response.

P
Pandarinathan Elango
executive

See, Assam, we have -- right now, the revenues in the errors. -- so that the increase with the increased cash price subject to the uptick of the gas, right? So accordingly, the price difference, we say 20%, that will be the increase in the 622% more, right? So there's 2 things are there. The price is now known for next 6 months. We are at as well. That is about -- so it should be around 30% expected revenue we'll be having on Assam -- provided the uptake continuing, as happened in the last quarter. And BAT assets, there are 2 in control. One, we have to fix the B1. And second thing, we should know the oil price asset. And third, on the more gas prices -- there's 3 things unless get done, projecting something it's not correct on our side, and we will let you know once next quarter, this is a prepared number there.

Operator

[ Mr. Shah ], there's a lot of disturbances from your line, sir. May I request you to disconnect and call back. We'll take the next question from the line of [ Mr. Gandhi ].

U
Unknown Attendee

My question has just been answered, so you can just take me out of the line.

Operator

We take the next question from the line of [ Mr. Uday Warensha ], individual investor.

U
Unknown Attendee

Regarding PY 3, there has been an update, I think the operator is trying to secure one FPSO from Norway. So since you are also a shareholder in that, do we have any additional update if we have secured that FPS or we are planning something on that side.

P
Pandarinathan Elango
executive

I think POC, we have not updated if any update is then we'll let you know in the next quarter results.

U
Unknown Attendee

Okay. Additionally, any new phase we are going to auction I mean we are planning to bid for? Assets nothing has been announced. Is anything that some will evaluate...

Operator

We'll take the next question from the line of [ Shashi Agarwal from MCC ].

U
Unknown Analyst

Yes, sir. Congratulations for a production again. I have only 2 points. One is regarding this FFO and the subsea on cutter, we are operating in a construction company or oil and gas construction company. Normally, whenever we are getting equipment, these are began for 100 years strong conditions and they are factory tested at site, so that there is no offshore failure for liquids. So whether why these equipments are failing in the first year itself? This is my first question.

P
Pandarinathan Elango
executive

Good question, [ Mr. Valora ]. And you are right, a company like ONGC will adopt that kind of a standard. I think we all need to keep in mind this field PAT was discovered sometime in the mid-80s and onetime can understate. So that is why it came under the bidding arrangement. I will discover Smartsheet. So obviously, we need to keep in mind the -- during the development process, overall economics of the field, which means the overall cost. Now on the basis, we allowed a particular model. And after the mount, we understood that, yes, there are certain things we need to do a slightly different thing. This is -- but overall, our objective was to ensure how do we develop this deal in the most cost-effective one. And also as early as possible is how we started the game. Obviously, have been delayed that happened because of multiple reasons. But the approach that we chose was this -- this is a conscious selection process. Aerie it will not come to development.

U
Unknown Analyst

Okay. The other thing like amplicons INR 10 crores and there is leakage in INR 1 crore, can we mean if the payment is not working, then can you use other core for operating publican defector we will have to essentially replace the umbilical -- and that sir.

P
Pandarinathan Elango
executive

If that is the case, then better to order that applicant because otherwise premium is good other period again? See, the total -- if I explained to you properly, the umbilical is less [ sineculometer ], right? That's menopause. Cambia cores with each core is having a different sizes for chemical injection definitely and the subsea control at you all differently. And other lease on in an edited on. But we don't have any staff the subacute focus 41. So that's why we are looking for the [ tele and the ] sale should work and the sale doesn't work efforts, then we will be using we will be going for the 35 assets to tighten the thesis. So we wanted to look for marking solution. That's a semen that will work for us. In either trade, we need a DSP to go down so far the patriation driving is required. So that's why we are waiting for the payer. Now the fire start in December. So we will be doing at the point...

U
Unknown Analyst

So if this does not work, -- my point was only for this ER and will be in the It's nothing -- if it doesn't work, we pull the 3 cap, and then we'll tighten that...

P
Pandarinathan Elango
executive

So this is We have to understand this, we are not only having an [ Angical ]. We have a playing lease. The league is only at the flying lead. So we have changed the playing well and in a [ mana that gets ] connected...

Operator

We take the next question from the line of [ Mr. Natwar Gupta from Applied Capital ].

U
Unknown Analyst

My question relates to the fundraising. So what is the time line for it? And what quantum of money are you planning to raise? And then if you can break it down to the use of the funds, how much in CapEx, how much in working capital and how much do we pay debt over the year. So if you can just throw some light on that.

P
Pandarinathan Elango
executive

Is the quantum approved by the shareholders crores. So that is the number. And we intend to raise this within a period of, say, 3 months. The view there remains for major portion goes for the development of T1 drilling. And the working capital needs about, say, INR 100 crores. So we are able to continue production from the pre-well as a is the D2 well and other some comes on. We'll be having at the end of the 3 months on supercars, which will be, again, put for the development. So in a sense, over a period of 6 months, the entire equity capital raise will be put on a development dues.

U
Unknown Analyst

So now the first -- the INR 250 crores that you are planning to raise, is that totally going to be equity or you did mention that it could be that as well. Now what is the threshold for the equity? What is the price at which you will issue equity? And would it be a rights issue? Or does it be your shareholders?

P
Pandarinathan Elango
executive

So we have -- this was all this once the decisions are taken. And I think…

U
Unknown Analyst

But I'm sure you have a threshold in mind to issue equity.

P
Pandarinathan Elango
executive

In fact, it closed the threshold in the north, then it difficult. I think if we pay out to stakeholders. We have to see, when we look at the funding equation pricing, we should be far both to the new equity holders who are coming into the business as well as the long-term existing shareholders. Keep that in mind...

U
Unknown Analyst

If you're going to -- so I'm a minority shareholder. If you are -- so at a lower price, I would like to participate rather than from a new coming in and I'm getting diluted down at a very good pipe.

P
Pandarinathan Elango
executive

I fully agree with you, our dilution for the value and not for a cost. So that's why we keep it in mind. And when we do the...

U
Unknown Analyst

Certainly won't be a rights issue then. It certainly will be a rights issue. It will be new shareholders.

P
Pandarinathan Elango
executive

That's to be -- we will come back with you with the right time.

Operator

Mr. Gupta, may request you to join the question here, sir. We have several participants waiting for their turn.

P
Pandarinathan Elango
executive

Sure. Thank you.

Operator

[Operator Instructions] We take the next question from the line of [ Mr. Rohit Potti ] from Marshmallow.

U
Unknown Analyst

No. My questions have been answered.

Operator

We take the next question from the line of [ Mr. Mani Patel from Eramet Capital ]. As a fall from the line of [ Mr. Mannan ] move to the next question from the line of [ Mr. Shiv Sankaran from Antic Limited ].

U
Unknown Analyst

For the opportunity Sir, the D2 well you're producing gas as of now, you said there is some oil also coming. So is there some number like currently we are producing in story?

P
Pandarinathan Elango
executive

At 10 million cubic feet, we are getting around 300 barrels day.

U
Unknown Analyst

So currently, that is being stored in the...

P
Pandarinathan Elango
executive

That is stored in the...

U
Unknown Analyst

Okay. And as far as the GSPC contract is concerned, this IGX basis is only for the next 5 to 6 months. On the second year kicks in. We go back to the original contract or how is that?

P
Pandarinathan Elango
executive

Correct.

Operator

To the next question from the line of [ Ashwin Reddy from Hamakua Investment ].

U
Unknown Analyst

The first question is on Dirok. So Rita, can you comment on the volumes at [ Began? As ] a date as you see so far in this quarter. So how has the volume being in the back?

P
Pandarinathan Elango
executive

Volume has been pretty similar to the sport.

U
Unknown Analyst

But have we added any new customers in the rain terms of the customer base increasing?

P
Pandarinathan Elango
executive

Not new customers, but the existing customers are continuing to take the volume similar to the last quarter. all that...

U
Unknown Analyst

Got it. And the second question is on T3. So last time for water recall, there was a plan that was given to you or the cost thing was given to you from the existing operators P3, which you thought was too high is what I understood in last as you mentioned, has there been any progress in how you want to deal with P3?

P
Pandarinathan Elango
executive

No, not really. We've been focused on VAT, not in the 3.

U
Unknown Analyst

Got it. And my last question is on BAT. So for the Ben, is it safe to assume that irrespective of the first solution through a [ Celent ] or the second solution metric plan to do? Will this get done before this get done before March, April of next year?

P
Pandarinathan Elango
executive

Yes.

Operator

We move to the next question from the line of [ Mr. Karan Mehta from Nizla ].

U
Unknown Analyst

Yes, sir. All my questions have already been answered, and thank you for the -- for all your clarifications.

P
Pandarinathan Elango
executive

Thank you.

Operator

We'll take the next question from the line of [ Mr. Sharad Sharma ], individual investor.

U
Unknown Attendee

Sir, given the high prices you've seen when we've lost that window, are we taking damages to the dealer on account of VAT from the supplier or any other manufacturer or service provider?

P
Pandarinathan Elango
executive

No.

U
Unknown Attendee

Okay. Okay. And sir, just as a servicing -- so even if your DRAM plans get delayed or it gets pushed out to something, can I this require certainly a communication coming out on the states rather than radical in space, I think communication could have been better and show you better please. Just as a fan suggestion and all the best.

P
Pandarinathan Elango
executive

Thank you, sir.

Operator

We take the next follow-up question from the line of [ Mr. Madan Papa from Maraba Capital ].

U
Unknown Analyst

Am I audible, sir?

P
Pandarinathan Elango
executive

Yes, we...

U
Unknown Analyst

And sir, one question on Brock. So now I have seen some update that we have started grading and site clearing for the pipeline. So is that laying of pipeline contingent on the Entrada gas grid or we will start playing pipeline and also drilling where the additional et cetera...

P
Pandarinathan Elango
executive

It is not indigent on that. This pipeline when we complete, would allow us to connect with all our customer directives. Right now, we are using the Oil India pipeline. And obviously, oil India would give when there is a demand, oil India first will allocate its own volume before allowing our volume to be supplied by having our own independent line, that issue will get. So this is the respective of [ Ilani ]. But most important thing is this it ensures in future, we will have connectivity in business.

U
Unknown Analyst

Okay. And -- but the wells we will drill after the [ Indradhanush ] pipeline comes on time, right?

P
Pandarinathan Elango
executive

After a consistent uptake is established -- I think we will do the...

U
Unknown Analyst

Okay. And sir, the last question, there was some update on credit product committee that the new changes will apply to all types of gas, including the APM. So does that apply to our BAT gas as well if you have some idea out on that at...

P
Pandarinathan Elango
executive

Right now, I believe the committee is only deliberating no recommendations have been made about it. So we really don't have any growth. As far as this 6-month price has already been notified by resonant. That is effective 1st October, $8.57 per MMG price will be notified. That will be valued in March 2.

Operator

We take the next question from the line of [ Sasha Wiind ], individual investor.

U
Unknown Attendee

Am I audible? Well, just wanted to understand on the 2 diving, would the current shareholders of the company be allowed to participate in the same? Or would it be at a higher level?

P
Pandarinathan Elango
executive

We have not come out with any more of rating agencies. We will inform you at a time.

U
Unknown Attendee

And is the right issue also an option? But can we compete...

P
Pandarinathan Elango
executive

Are being evaluated and all options are being evaluated, and we come out with the right action at the right time.

U
Unknown Attendee

All right. One more thing. I really appreciate all the hard work put in by the management and the entire team of HVC because this is not an easy thing from past 5 years, you guys have been continuously working towards it with very good commitment levels. So really appreciated the efforts and the commitment that the company has been showing towards the assets and to create value for the shareholders.

Operator

We take the next question from the line of [ Jang Pita ], individual investor.

U
Unknown Attendee

My question is regarding PY-1, are the operator now also because they are tied to shoot again HOEC and or AC has got the openers of Giant because it's all producing will because of small problems regarding the rating match that they was shopping 200 let…

P
Pandarinathan Elango
executive

There are 2 fields in Eastern offshore One will be by one which is 10% on an operated by...

U
Unknown Attendee

I'm sorry. I'm sorry that I missed up, sir. I got Ian is a gas fill, which we supply gas through Gale India. Previously, it was through a way of supplying it to a power plant. And because of the, there were a lot of issues. I'm sorry. Okay. Okay. Okay, sir. So what will be the status of P1 filter? Yes.

P
Pandarinathan Elango
executive

As saying PY-1 is 100% on an operator, and we are supplying. We will explain where we plan. P13 is operated by another company. We have the test with us that has been hold can't provide any update on that the deal it isn't before.

U
Unknown Attendee

So net -- but the [ Papilio ] producing oil or it was shut down now in 2000 levels.

P
Pandarinathan Elango
executive

After that has stopped. I remain shutoff.

U
Unknown Attendee

It has been shut down. So any -- there is no chance of then getting sorted out early.

P
Pandarinathan Elango
executive

No, no, we really don't have any update on PC. As you said, we have a legal case. And all we know is that speed is not on production or unit...

U
Unknown Attendee

But Teva was the previous 2 well, which we have drilled from there, was gas being produced, are those guests now also operational where the operations, sir?

P
Pandarinathan Elango
executive

Yes, yes. We are operating the wells and supplying the gas to date.

Operator

Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. Elango for closing comments. Thank you, and over to you, sir.

P
Pandarinathan Elango
executive

Thank you. Our top most priority is to achieve sustained and stable production from both oil and gas sales of BA. Our portfolio consists of significant discovery but yet to be developed resources across Teva, Dragan and [ Cambi assets ]. For the last 2 years, all our capital investment and management focus have gone exclusively to BAT, delaying development and monetization of other discovered resources in our portfolio. Purpose of the proposed fundraise to have access to capital so that all projects can be progressed simultaneously rather than sequentially. Once the company is enthused with additional capital and technical resources, we can embark on its next phase of production growth comfortably. Thank you for joining.

Operator

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

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