Hindustan Oil Exploration Company Ltd
NSE:HINDOILEXP
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Hindustan Oil Exploration Company Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '23 Conference Call of HOEC Limited. [Operator Instructions]I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you.
Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of HOEC Limited. On behalf of the company, I'd like to thank you all for participating in the company's earnings call for the fourth quarter and 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 be poor from those anticipated. Statements -- such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. P. Elango, Managing Director; and Mr. R. Jeevanandam, Executive Director and Chief Financial Officer. Without any further delay, I request Mr. Elango start with his opening remarks. Thank you, and over to you, sir.
Thank you, Anuj. Good afternoon, all. Thanks for joining. I hope everyone has received the updated earnings presentation. We've also uploaded it on our website for your reference.FY '23 has been a fruitful year with Q4 being the first quarter where both oil and gas wells in BAT on continuous production mode. In Q4, at gross level, we have produced more than 10,000 barrels of oil equivalent. Out of that, about 4,100 barrels of oil equivalent is met to HOEC. I would provide the operational update and Jeeva will share the financial highlights.Let me begin with our flagship BAT project, Expro, our process equipment vendor has, during the quarter, completed the repairs on the high-pressure separator and commissioned it into service. This is one of the major challenges on the project and debottlenecking of others are addressed one by one. We are now able to flow both the well simultaneously. Currently the oil production is less than forecasted, but gas production is more than we anticipated at 17 million cubic feet per day. The reservoir has shown encouraging trend of decreasing gas oil ratio. Our technical teams are closely monitoring the reservoir parameters and collecting the dynamic data required to forecast the optimum production levels from the fleet.For the additional gas, a follow-on gas sales e-auction was promptly completed in April. GSA has been signed with Indian Oil Corporation at 16.2% of average Brent crude oil price of previous month. The price is subject to a ceiling price of Platts West India Marker LNG plus $1 per MMBtu and a flow price of $9 per MMBtu. Offtake based on this GSA has already commenced from 1st of May 2023 and is continuing. GSA with GSPC is also ongoing and will continue for FY '23, '24 on contract terms. Any additional volumes available are being sold by us on IGX, that is Indian Gas Exchange, and the system has been established with buyers being familiar with BAT gas at Hazira delivery point.As part of monsoon preparation, SBM maintenance work was completed and underwater inspection of connecting hoses were carried out. New hoses are already ready for shipment post-inspection and will be changed out as and when required.Oil produced is being continuously transported to FSO for storage and a tradable parcel size of over 200,000 barrels is now ready for shipment. We plan to sell the same using our e-auction mechanism similar to the gas auction we had conducted. We will invite all the domestic refineries to participate in the e-auction. Post e-auction, the sale and shipment will happen subject to availability of suitable weather window and the technical feasibility of offshore by tankers during monsoon season.At Dirok, we achieved average gas sales of 30 million standard cubic feet per day in Q4 against 33 million standard cubic feet per day in Q3, 34 million in Q2 and 25 million in Q1. Dirok gas offtakes has seasonal variations with particularly lower offtake during Q1. Maintenance activity of any major consumer also impacts offtake adversely. The PPAC notified gas price was revised to $7.92 per MMBtu in April, $8.27 per MMBtu in May 2023 as per the new Parikh Committee recommendations. About 25% of Dirok gas sales was sold by us in Q4 at a dollar premium over the notified PPAC prices.Overall our focus on value over volume in Dirok has proven its results over the last financial year. For the next phase of development at Dirok, pipeline construction work in the difficult forest segment has commenced and is progressing as planned. This 18-inch pipeline will transport Dirok gas to Duliajan marketing hub independently without relying on Oil India pipeline network. This will enable connecting the Northeast gas grid in future, significantly enhancing the market size for Dirok gas.We are closely monitoring the Dirok gas sales offtake rates at different season and at different price points. We are proactively engaging with multiple stakeholders involved in building the Northeast gas grid to achieve greater demand and consistent offtake with the possibility of customers connected to grid. Wells and facilities have demonstrated capacity to deliver nearly 45 million to 50 million standard cubic feet of gas per day. Depending on the demand, we have the flexibility to execute workover operation to enhance the production capacity further.We are continuing with the small volume of gas sales to GAIL from PY1. Currently reprocessing of seismic data is under progress to update the geological model. Hundred percent [ PII ] and a low investment multiple makes this feel the best choice of next investment for HOEC.Both in PY1 and in Kusijan, outstanding issues have been resolved with the government to secure a 10-year PSC extension. While formal PSC amendment has been executed for PY1, it is under process of Kusijan in Ministry of Petroleum and Natural Gas.In Cambay assets, while production operations are continuing, final execution of ring-fenced PSC for R2 area by government is still awaited. Meanwhile we are progressing the environmental clearance process to undertake drilling campaigns in 3 marginal fields of Cambay in future.I now invite Jeeva to share the finance highlights.
Thanks. And we report that the company made a total revenue of INR 411.1 crores in the current year compared to INR 132.72 crores in the previous year in the standalone accounts. Similarly the current quarter revenue is INR 158.78 crores compared to INR 109.67 crores in the previous quarter in the standalone accounts. The consolidated account, it is INR 592.2 crores against INR 161.4 crores in the previous year. And the quarterly revenue is INR 193.4 crores compared to INR 178.99 crores in the previous quarter. This increase in revenue is mainly due to revenue from BAT fleet and better realization from Dirok.Production from BAT field has contributed about INR 144 crores revenue in the current year. BAT revenue in the previous quarter was INR 30.96 crores, which has increased to INR 86.57 crores in the current quarter. Dirok revenue also increased about INR 129 crores in the current year due to better price realization. Dirok current quarter revenue is INR [ 67.56 ] crores compared to INR 74.27 crores in the previous quarter. In the consolidated accounts, in addition to the increase in sale of oil and gas revenue, as stated, subsidiary assets, mostly on the [ SHO ] has also contributed to the total revenue by INR 149.63 crores in the current year.Standalone profit after tax is INR 163.67 crores against INR 70.19 crores without considering the exceptional cost charge in the previous year. EBITDA for the current year in the standalone account is INR 223.17 crores compared to INR 92.09 crores [Technical Difficulty]. In the consolidated accounts, the profit after tax is INR 194.05 crores against INR 20 crores in the previous year. The EBITDA on the consolidated accounts for the year is INR 320.98 crores compared to INR 90.37 crores in the previous year. In effect, all the investments made in BAT fleet with associated facilities of subsidiary started to earn the revenue.Total operating expenses, including royalty interest of standalone for the year, excluding finance cost is INR 246.49 crores compared to INR 52.51 crores in the previous year. Major cost is for the [indiscernible] charges for MOPU and the FSO in the current year. Depreciation, depletion, and amortization for the current year is INR 27.65 crores compared to INR 14.85 crores in the previous year. An amount of INR 58.7 crores stock adjustment made in the current year, which reflects the stock of INR 380 crores in the FSO.Finance cost of loan for the current year is INR 24.23 crores, which will get reduced as the short-term notes are getting repaid. The total expenses in consolidated accounts, including DDA and excluding stock adjustment is INR 379.91 crores compared to INR 99.22 crores in the previous year. This cost increase include the cost of MOPU, FSO and [ BA ] maintenance. The total finance cost in the consolidated account is INR [ 30.76 ] crores, we have stated, which will also be reduced in the current financial year.[Indiscernible] the outstanding loans from the banks are INR 250.3 crores. Company has obtained the rating of A for INR 500 crores bank loans in India rating. With the current cash position and with the continued production, we will meet all our obligations. Most of the operating costs are not linear and are fixed which needs turning up assets to get better net realizable value. As on date, all the investment made in various fees, including VAT or on revenue mode and this continuously improved the financial position of the company.We would like to optimize the revenue share to government of India by maintaining the fleet production for BAT field with a constant revenue mode without hampering the reservoir pressure. We endeavor to keep the optimum revenue as a threshold by keeping in mind the field production not above optimum level. This would prolong the plateau of the field life. We will bring down the borrowing to less than INR 100 crores in the current year. We also embark on PY1 redevelopment in East Coast of India, wherein the return on marginal capital is much higher as actions and investments are already made. Further, it would unlock substantial value of the assets, which was already impaired in the books of accounts.On achieving the optimum production from BAT and Dirok, the company will embark on drilling wells in PY1, having secured 10 year extension for the block. Thank you.
Thank you, Jeeva. Can we now open the floor for questions, please?
[Operator Instructions] We have our first question from the line of Chitresh Lunawat from Gartner.
[Technical Difficulty]
Sir, I'm sorry to interrupt, but your sound is muffled. Can you use your handset, please?
Is it better?
Yes.
Yes. Sir, congratulations for building the [ B80 ] field online and onto revenue. My question was regarding the oilfield. So the last quarter, the oil was not at optimum level, right? So in this quarter, we are expecting it to run on the optimum levels, right, sir?
I'll answer. We wanted to have a revenue threshold. With the current oil and gas productions, we are meeting with that as there is the D1 well, I can say that HP separator reserve was completed, pressure difference will exist between the wells, which is higher in D1 comparing to test results. Till the pressure in D1 is reduced to the test pressure, gas production from D1 will be more and oil will be less. Having not seen much pressure reduction in either in D1 and D2 well, we are happy about the well performance. We believe that the current level of production will continue and the expected reduction in pressure from D1 well by depleting the additional gas pocket, we will increase oil production. That's what at the moment. So right now, we are making a decent revenue with oil and gas, and we'll continue with that. As long as every day, there is an improvement in oil production. Once the additional gas pocket get depleted, we will get back to a higher level of oil production.
Sir, my question was with regarding the oil because, I mean, we were earlier told that we'll be getting 7,500 barrels of oil per day and also 10 million tonne of gas. So what is the current scenario for [ DET ]?
Currently the gas is about 17 million cubic feet per day and oil is about 1,400 barrels.
And what is the plan for the new drilling wells for PY1, whether you're waiting for the BAT to get stabilized for 1 or 2 quarters and then start PY1? Or what is the plan there?
PY1, the weather window starts from January. Our seismic data is getting reprocessed. Once the data reprocessing is completed, our geologists will reevaluate the data. And once they release the final location, and we will get a drilling rig and we embark on the first well drilling probably on the last quarter of this year or the first quarter of the next year.
So this year, where will we plan to drill, sir, in Dirok or BAT then? I mean, anything…
This year we are not going for any drilling program. Our program is for the PY1, either the last quarter of this year or defer to the first quarter of the next year.
We have our next question from the line of Dhwanil Desai from Turtle Capital.
Sir, my first question is, I think from your commentary, just one clarification. So this quarter, we have not yet recorded sale from oil in the current revenue, right?
Yes. I think [indiscernible] is not getting recorded in the sales. But you could have seen the stock adjustment, which is substantial, which is mark-to-market on 31st March. So in effect, it has reduced the cost. When it is sold, it will move to the revenue.
So that the benefit of that on the bottom line is already reflected.
Yes. It gets reflected in the bar.
Sir, second question is, so you said that the sale of oil parcels will be subject to weather windows and tanker movement. Just wanted to understand from you that from the perspective of doing this on an ongoing basis, do we have any connectivity with oil pipelines? And if not, will we be always subjected to this kind of having the right weather window to sell our oil parcel?
Two issues are there. Once we have got the tanker size, which is substantial, it is about 900,000 barrels we can store it. So second thing, the [indiscernible] pipeline connection is too expensive and our BAT field is located. So that's why we've gone to the mode of evacuation through storing and evacuation through FSO. So this would be the first update. Once the update is over, we will also get familiarized with the field issues if any, and then we will be planning the regular.
And the second question is on the oil and gas. I think we were in for much lower gas production. And you said that we have got, where the gas flow is higher, and hence the oil production has been curtailed. So going forward, we will kind of maintain in terms of MMboe same equivalent output, right? Because you want to optimize on our royalty and everything. Is that the right understanding?
I think what is happening is this being a revenue sharing contract, we would like to go with revenue more constant. That means that we will not be blocking that, we will not be increasing production before a threshold revenue model. So our revenue model says, this is the next revenue, that plateau of the revenue, we will keep it. So accordingly we will be seeing that the oil and gas production matches the revenue, and in no way we wanted to go above the optimal level of production by our reservoir team.
We have our next question from the line of Sudhir Bheda from Right Time Consultancy.
Many congratulations for the good set of results and building the B2 online. So sir, my question is, as you say, the stock is mark-to-market. Sir, can you quantify what rate it was mark-to-market and the quantity? And at present, is it completely sold or what is the status?
It is in stock. Normally we take the price and the closing date that was taken at $78. And when it is sold, it will be the price what we will be relating on, that depends on the [ injunction ] auction, e-auction, which is being planned for.
Sir, what's the timeline when it would be?
Yes, the results are expected this week. It will go online next week. So within 10, 15 days, we'll find out. And that will be the price we'll be getting.
And sir, when, if it is possible, I don't know to quantify the timeline, but when you will be getting the optimum products on level in this field?
Currently the revenue mode is about, say, $300,000. We'll go up to $350,000, that's the level of revenue because our share to the government, we want to keep it at the current level of, say, currently we are paying around 30%. We may go for 10% now, and that will be our revenue optimum.
So that is for the entire year, this [indiscernible]?
Yes. Yes, that's right because we wanted to keep the plateau of the production for a longer period in BAT. And to achieve that, we wanted to give the revenue function more, having the high pressure oil and gas.
We have our next question from the line of Rohit Potti from Marshmallow Capital.
Congratulations on getting both the wells online. This is something we've worked on for a long time and really happy that we could achieve it. So on the balance sheet side, sir, I mean, we don't have any CapEx through the fourth quarter or the first quarter of next year. So does it mean that -- I mean, in the past, we used to see that in the industry like us, we need to have INR 100 crores of cash on our books always. So will we be paying on our entire debt and going into that balance sheet structure going forward?
I think, Rohit, I 100% agree with you that we will be more or less would like to go for a debt free balance sheet. That would be [indiscernible].
So on capital allocation, again, I mean, it makes sense to go for debt free. But I just want to hear your thoughts on buyback. So from what you said, BAT alone would be generating more than $100 million a year. And it's a highly cash-generating asset. And then we have upside in Dirok coming with in connection with [indiscernible] et cetera. So at the current value of the business, I guess, that's quoted in the market, does it not make sense to increase the shareholding of the existing and long-term shareholders by doing a buyback?
No, there is no question of buyback. We have got the chain of capital investments planned for it now. We are talking about PY1. After PY1, we have to go further Dirok. After -- during this whole system, we have to go for the western -- all the blocks in the Cambay basins, which is the 3 assets, which is dormant for quite some years. So we have a capital plan in [indiscernible] and then we have to work on [indiscernible] also. So we have capital plans already laid up for at least 4 to 5 years.
And last question, so just to get this right on what you said in terms of the revenue. Do you want to not optimize -- production is not yet moving BAT, but revenue. So what you're saying is that at the current production level of, let's say, 1,400 barrels of oil and 17 MMSCFD of gas, we'll be hitting the $350,000 per day target that we have in BAT. Is that right?
Yes. I think we are not yet at the moment. So till the time we will be maintaining. So our target is to reach the revenue level of $300,000 a day to $350,000. And without hampering the reservoir there and the pressure there.
So what does that mean in terms of the production process, 17 MMSCFD of gas? And how much would oil have to increase to reach that number?
We will be going as per the -- because there is a small gas pocket, till it gets depleted, it will be slowly gradually increasing thereon. So we'll be reaching to the level of -- I mean, I can't say the timeline assets, and it will definitely on an increasing mode, it will go on to reach to the threshold level, and we'll maintain that level itself.What is happening is there is a small gas pocket is there, which is now getting depleted. So the pressure reduction is about 3 to 4 [indiscernible] per day. So till it comes to our test pressure level, so I would be at this rate of increasing about 10 to 12 barrels per day increase, right? Once it reaches to a threshold level asset, then there will be some reduction in the gas, both will get off the [indiscernible]. At that point in time, we will be maintaining only the revenue generation as a benchmark product, and we will not [indiscernible] the reservoir. We'll not do anything with the reservoir and we will keep the reservoir in a way that the production at the optimal level to prolong the life of the field.
So 2 questions here. So what is the revenue generation per day right now? And second, this air pocket is in…
Right now it is $180,000 on account of the gas, right, it will vary up to $180,000 to $190,000 per day, right? Oil 1,500 barrels, it is equivalent to another $120,000. So we are reaching already a level of $310,000 per day. So we will be going up to maximum of $350,000, and that's the level we wanted to have it.
We have our next question from the line of Rikesh Parikh from Rockstud Capital LLP.
Congratulations on getting the BAT on track now, sir. Just a couple of questions on the BAT side. Sir, I just wanted to understand what was the gas relation and the gas exchange for the last quarter since we are doing some 25% on the spot exchange?
Yes. I think I'll tell you the number. It is gas price realized this -- the whole year for BAT was $15.71 per MMBtu, and the last quarter was $15.47 per MMBtu. And the previous quarter was $13.86 per MMBtu.
Now is this combined of spot and negotiated price? Or is only the spot exchange price?
All combined.
Secondly, sir, just -- yes, just wanted to understand, on the CapEx plan for the current year, I mean, largely, it will be [indiscernible] if I understand as such. So what will be the CapEx we are planning for the FY '24?
So '23, '24, our CapEx plan is only for the PY1. One we're drilling. The total outlay is about INR 64 crores, which we have to pay for a portion of the more the earlier and portion of the next financial year. That is the outlay for the CapEx outlay for the current financial year.
[Technical Difficulty] which is already underway for that?
Yes. We are working on it. Our seismic reprocessing is -- gets completed, then we will start working on it to secure some risks and other things.
And just want to understand, this 4Q number from the BAT, should we think of it, is it broadly a strategic number or there will be some marginal higher [indiscernible] ability? How one should be looking at?
We wanted to share the total revenue share to the government should be not more than 1/3. That is the level we want to give. So below the ground oil is better for us. So that's the reason.
And then lastly, sir, on PY3, we had some Singapore arbitration during the quarter. So I just wanted to understand our stance now? And, I mean, can we appeal further? And what is the total amount liability over there?
There was an appeal at the lower court, got dismissed. We went to the federal court in Kuala Lumpur, and that is -- that will get adjudicated at some point in time. And similarly, we have got a case in the Gujarat high court, which is also yet to come for hearing. The total exposure to us as we are speaking with interest liability and all put together is about INR 17 crores.
So the MAX liability, INR 7 crores, right?
INR 7 crores. Yes.
We have our next question from the line of Abdul Karim from HDFC Securities.
Congratulations for this set of numbers. For PY1, you have completed EIA 34, obtaining environmental clearance for drilling additional wells. So what are the environmental and regulatory approval is still pending and you are waiting for?
Sir, we have to get -- we have already gotten environment clearance. It is an ongoing field as such. So we are submitting the application in such a way we'll get the clearances faster. So we have got about additional 7 to 8 months' time to drill the well. Before drilling the well, we will have all the clearances in place.
And on BAT project, you are transporting as well as storing at the FSO, as you have mentioned in the investor presentations. So if you could share some numbers in terms of what is the current number of barrels of oil, which we have stored?
Okay. See, this is one of the concept of evacuation in the sense in an offshore where we are not able to lay a cost-effective pipeline. The oil produced from the field is stored in a floating storage offshore, that is called Aframax tanker, which is having a capacity of 900,000 barrels. Right now, as we speak, we have got about 260,000 barrels of oil in the ank.
We have our next question from the line of [ Ajit from Mirdha Securities ].
So my first question is regarding your clarification that we will not do buyback in the coming years. So do we have a dividend distribution policy going forward?
I wish actually, but we wanted to grow this company to the -- see whatever the assets which you look at, PY1, we spent about $380 million, which is a dormant asset at the moment. Then western region assets are legacy assets of 25 years. We have to monetize these assets in a row, actually, within a period of 3 to 4 years. So that is why once these assets are getting monetized, if you don't have any better opportunity to get an inorganic acquisitions or anything thereon to it, then we will certainly do that.
And the second question is regarding PY1, sir, like PY-1 generally, Reliance, ONGC and [indiscernible] our old promoters has been unsuccessful after spending huge sums. So what is the reason for us to be very optimistic on that? Like can you give some clarity?
There is a discovered oil and gas in this space, and it is going with the mind of the geologists, which the geologist reach, that is -- that decide supporting. We have got a petrophysicist come from London, and he is working on the project. And he is very confident about it. The very nature of the business is, it is the risk associated with it. This is being a basement result, we are taking all precautions to drill a right well, drill a well at the right location, and we are confident we will be able to produce oil and gas from the new wells. So at the end of the day, it is after drilling the well only we know the results.
We have our next question from the line of [ Vivek Joshi from BP Capital LLP ].
Congratulations on a great set of numbers. It's been quite an up and down year, so like congratulations to that first. And I have 2 questions. One is that there's a reduction in charge entries of INR 28 crores. So could you just explain the math behind it? I was not very clear. Is it like a noncash charge or like this was already paid, but accounted for this year? And my second question is some trend for the current quarters like this. Are we on track to get a revenue, which is equivalent to last quarter or more or less? And just last question is the contingent liabilities that you spoke on in open cases, was it INR 70 crores or INR 17 crores?
INR 17 crores.
Okay. Thank you. That's one done. Yes. That's all. That is the questions from my side.
What has happened that we have a contract with Expro where they are the provider of our top site facilities, and they are having an O&M contract. So now the field has started the continuous production from the 1st of November. We sit down with them and discussed and we have thrashed out all their claims and our claims and all. Then we made a conscious decision as such. So both the sides, we will pay for Expro to the duration, which they work for it. Similarly, we'll charge to the joint venture to the duration, actually, the production from the field has been achieved. Accordingly the fourth quarter revenue and the period in which we have charged the excess on the MOPU stand reversed, and that is where the cost reduction comes thereon. Similarly we've taken a hit on the revenue on the MOPU on the consolidated accounts. That is why it's been mentioned into the -- in the note number 3 of the standalone accounts, the same notes are being reflected in the consolidated accounts also.
And some color on the trend for this quarter.
You can take the -- it is more or less like a reference projection, but you can take the last quarter as a reference.
We have our next question from the line of Manan Patel from Airavat Capital.
Congratulations for great numbers. And congratulations for a continued production. Sir, the first question is on the BAT production. So if we look at 17 MMSCFD and 1,400 barrels, it comes to around 4,500 barrel oil equivalent of production. So if we look at the initial numbers, it was around 7,000 to 7,500 barrels. On that basis, we assume that the cost of production per barrel would be around $20 or a bit less than $20 per barrel. So with the new production numbers, the cost increases to almost $31, $32 and if you consider time value of money, it's even higher. So what are your thoughts on the profitability of the project because the cost is significantly higher at less production?
It's not significantly higher, as such. We have optimized the cost, when you initially conceived the development plan that the projection was about the same 4,500 barrels, subsequently drilling of the wells we have got into 7,500 barrels. Our cost is -- our average cost is -- that is why we get into the model of outsourcing at the block level and sourcing at the corporate level. So right now, our operating costs payable to the outside party is only about, say, $40,000, less than $40,000, about $30,000. So whatever the past increase thereon comes back to the company as a revenue at some point in time. And that's why this $30 is a miss number to us in effective terms as a company as a whole. And further, you look at as such, the revenue has gone up substantially, then all the service companies will charge in line with the increase in oil prices. So we don't find any abnormality in the charges made to the BAT, considering the oil price and gas price at the moment.
Sir, the second question is on the FSO. So once we produce and once we have to auction -- once you auction and we have to deliver. So does that mean the production for the days that vessel goes for delivery. So can you shed some light on that? How many days the production could not happen because FSO is not there?
So there is a total, out of 365 days, sorry, out of -- not -- we have started on 4th of June, right? From there to 31st of March, we have operated only up 192 days. The production was from the field only for 192 days. And that is -- but in the current year, we will be continuing as such. That's what we believe in it. And the FSO charge is, let's say, it is not only for storing the -- it is for storing the oil as well as offloading assets. So this is a facility per se so that the charges are applicable when the facilities are ready to receive the oil. When the facilities are not ready to receive the oil, we won't be able to charge. For example, there is a repair in the line or some reasons to the FSO, we are not able to offtake the -- they are not able to store -- receive and store the oil, then there won't be any charges for it.
No, sir. Sir, the question was, so when we auction of the gas -- sorry, oil and the FSO has to go for delivery to any of the port.
No, no, no, sorry, it is outside plant. It is stationary there, it will not move out. Vessels will come and pick it up.
So we don't have to stop production when the delivery is happening?
No. [indiscernible] will come from [ SCA ] and they will pick up the [indiscernible] from FSO.
And sir, the last question is on Kharsang. The clearance has been obtained. And I understand they're not the operators there. So what kind of CapEx should we expect in Kharsang and what is the timeframe of that?
Kharsang actually that -- so we were -- it all goes with the first well drilling, we will be -- some of the regular workover and other things will continue there. And we wanted to delay one of the deeper prospects, that will cost about $15 million, $20 million per well. So the total program is envisaged for 18 wells together for less than 1,000, 1,500 meters. The program to my mind was somewhere around $80 million, but our share would be about $20 million, over a period, actually.
We have our next question from the line of Chetan Phalke from Alpha Invesco.
Sir, my question is with respect to BATs post 5. So in our Q3 call, we had mentioned that the replacement work will be carried before or carried out pre-monsoon. So are we on schedule? Is it already complete? And do you envisage any problem with respect to hose pipe or umbilical connection during the upcoming monsoon?
So recently we have maintenance work was carried out of the SBM. At that time, our divers went down and checked and all the connections made was intact. And at the moment, we don't expect any problem thereon. But, however, we have placed -- our order we placed for the hoses got completed and the hoses are ready for shipment. And we will keep the hoses ready in the vessel itself and there is any problem comes, we will change it. And right now, we don't want to disturb that supposition.
So this replacement can get rescheduled to post monsoon as well, and there won't be any issue in…
Holding well, that's why we sent the diver down and he himself checked it actually and found out it was intact. And if any problem comes, then we should be having the hoses ready and a small disruption on to production, we'll be able to get it done.
So how much time would it take, let's say, some issue occurs, to replace the hoses considering that we will receive them and we'll have them ready at the vessel?
If the weather permits, it's not a big job, it is within 10 days, less than -- 7 to 10 days maximum.
And sir, considering their normalized operations, let's say, during the full year, how many days of maximum oil production we can achieve? Should we consider 330 days, 350 days or any ballpark number?
Normally we consider it as 350 days for overall projections. And that's a general way of looking at it. But it may -- some of those cases, we have got an uptime of even 99%. They have some 3, 4 years' experience in this field.
And sir, by when are we expecting this pressure reduction in our wells to achieve the desired level? I mean, will it -- is there a possibility that it may spill over into FY '24 as well?
I think it is -- there is a small reduction in the pressure as such because you know that we were producing around 3,000, 4,000 plus barrels at 1,200 psi, flowing tubing pressure. Now it is around -- it is around 1,500 psi. So daily, there is a reduction of some 3 psi and 2 psi and some days it goes to 4 psi. So in essence, we have to wait and watch. So if the current trend goes, I think we should come back to some level within at least 6 to 9 months.
So there is a possibility that the desired level of production, I mean, we will have to wait till FY '24 to get there.
And second thing, also, how much we would like to share with the government at the end of the day.
And sir, I think in our exchange announcements in April 2023, we have mentioned that our potential oil production is under review, and we are doing some debottlenecking to achieve the design capacity. So any -- I mean, what do we mean by the production is under review and design capacity as in any -- if you can explain that?
So what we are looking at as such because you know that one well is holding around 2,400 psi, another well is about 1,500 psi, the press difference exist. So we need to have -- at some point in time, we need to have some compressors, additional compressors and booster compressors for the D1 well to get both the wells flow to its capacity. So some of these things are being worked out. Some temperature issue is there, which we are getting it addressed. So small, small issues are coming up because we are in the continuous production for only last, including this, only 6 months, less than 6 months. For compressors, we have to place an order with that, that we have asked our Expro guys to give the design for it, and that is already on the right track. So we may have to place an order with another company in India or outside India. So that will take about 8 to 9 months to delivery. So with that, by the end of this year, the beginning of the next year, we will be coming to a good grip of the field facilities as well as the production thereon.
So sir, given the current situation, then what would be our, let's say, estimated revenue or profit guidance for the next 3 quarters?
I would not comment much on it. You can go as a reference projection of the fourth quarter.
So we can consider, let's say, $300,000 per day kind of a [indiscernible] for the full year. Okay. All right.
We have our next question from the line of [ Rohit from ithought ].
Congratulations, sir. [Indiscernible] thank you for all your efforts. Sir, most of my questions have been answered. I just wanted your clarification on the [indiscernible] that you mentioned, which was asked by another participant on these reduction charges. I could not understand it. Can you explain that again, sir?
Yes. See, what has happened, so there was a discussion we had with the Expro, our service company. Our MOPU charges which we have made based on irrespective of the production we charge. We see reverse because there was a corresponding credit we got it from our own service provider to us. So essentially now we stick to 1 point after the prolonged discussions with the parties concerned. So MOPU would be charged with the day when the production is on from the BAT field. Similarly that FSO, when it is ready to receive the oil, they will be charging. In effect, our charges to the JV is depending on the actual production we are carrying out, how many number of days we are doing on it. And if there is any effect on account of the MOPU and FSO, we will not be charging to the joint venture. That is why the reversal has taken place.
And the other question that I had, sir, in terms of the costs that we have, so we should take these costs as what they are in terms of, I mean, costs like employees, et cetera. This is the credit base. The reason why I'm asking this question is despite increasing the production, the employee cost declined quarter-on-quarter. So I just wanted to get your thoughts on this, both at standalone and consolidated?
The consolidated account, there would be an impact on the cost. I agree with you. When the increase is the same assets turning out with the more number of barrels, the cost will come down because these variable costs are more or less like it cannot be called as a variable. It is more or less fixed operating cost. Right? So when we get more production, we will have a better performance on account of the standalone. But our -- in the consolidated account, it remains to be the same. It's only a marginal increase, a marginal increase in the revenue because the entire revenue, out of $140,000, $100,000 comes back as subsidiary.
And the last question, I mean, just to sort of summarize whatever you've said so far. So in terms of production from BAT, at this point of time, at least for the next 6 to 9 months, this would be the optimum production that you are looking at as having and the pressure between the 2 wells, the difference decreases, there could be a chance of production ramping up again post 6 to 9 months. Is that understanding correct, or?
Yes, I think your understanding is absolutely correct. But one caveat saying that we wanted to have the revenue stability because that revenue -- optimal revenue, we will fix that, that the revenue is there, we will accordingly produce from these wells because otherwise our share for the government goes substantially higher. So instead of that, we will keep the oil below the ground and increase the plateau of the oil.
We have our next question from the line of Vaibhav Badjatya from Honesty and Integrity Investment.
So a lot of my questions are already asked. But just one question on the oil that is being stored. So earlier, you said that we are marking it to market, and it is valued at $70, and that's why the large part of the benefit is already there in the P&L.
You're right, absolutely.
Yes. But I just wanted to understand because the accounting -- established accounting principle is that you have to value inventory at the cost of net realizable value, which is lower. So I mean, obviously $78 is more than the cost of production. So I'm not sure how this recognition has happened? Or maybe I'm missing something.
No, actually, the oil and gas companies, most of them, they've got an option based on the guidance and IFRS, you can check that. The revenue can be mark-to-market, and that should be the stock valuations can be done. This is -- you can find that in the accounting policy of the company since the inception.
So there is an option and we exercise that option?
That's right.
That's it from my side. I think all other of my questions have been answered.
We have our next question from the line of Tejas Shah from [ Unique Stock ].
Great set of numbers. Now if you can quantify, I think you've got topline of INR 275 crores on a consolidated basis and a profit of INR 125 crores, if we don't account for the reverse back for this quarter, am I right on that understanding?
I can't get your question actually. Can you tell me?
Our top line is growing, means our total income is in the range of INR 275 crores [indiscernible] other income and everything. And our net profit is in the range of INR 125 crores. If you don't increase the reversal of the charges that we have done, that INR 24 crores some odd for that FSO and all. So am I thinking right INR 275 crores of income and INR 125 crores of profits for the quarter?
Yes, you are right as such because we've declared that number in that manner only, right? If you look at the consolidated profit, if you look at the profit or loss consolidated accounts, it has come from INR 36 crores, it went up to INR 110 crores, right?
Correct.
Okay. Then INR 36 crores into INR 110 crores as such you will be having about INR 75 crores, right? It's simply INR 100 crores. If you take the reversal into consideration, it'd be about another INR 10 crores more. It should be around INR 85 crores, right?
Yes. So should we consider this run rate from this quarter onwards, around INR 125 crores of profit?
Reference projection, I said, it should be considered in that manner.
Agreed. And if you can break up the topline for Dirok, B80, PY1, and MOPU in terms of projects as possible?
You wanted to have the breakup of the revenue as such for the year as a whole.
No, no, no. For this quarter only, this quarter.
This quarter. This quarter, BAT revenue is about INR 39.62 crores and without considering the oil in stock. And Dirok, it was INR 74.25 crores that is, sorry, this quarter. Sorry. You're talking about last quarter or this quarter, this current quarter?
No, this quarter, this current quarter, sir?
Current quarter, without…
BAT oil and gas both together and our Dirok.
The BAT gas revenue is INR 86.57 crores. And Dirok is INR 67 crores without considering the oil in stock.
And the BAT, INR 87 crore, which you mentioned, that includes oil or that is without oil?
Without oil, I said to you that sales revenue is INR 87 crores for BAT, and Dirok it is INR 67 crores.
I think oil in stock, you said, for this quarter is INR 45 crores, that is without mark-to-market or that will be including the full mark-to-market?
Oil [indiscernible] it is INR 37 crores in stock.
And PY1 will be how much?
PY1 is negligible. It's producing about INR 2 crore revenue, that's breaking even revenue. That's why we want to embark on PY1 drilling.
And the FSO revenue will be what, if you don't consider the -- any reduction or anything?
FSO revenue for the quarter would be INR 35 crores.
INR 35 crores. Okay. Great. And on the BAT, you're saying maximum under we can go is after 9 months only, not before that, correct?
Yes. I think it's a question, actually, we have to make a call on it, what is the revenue share with the government. So we have to keep the [indiscernible] into consideration. It's not the short term, we have to play for a longer term.
And just one request. We normally send mails to [ Dipika ]. She does not reply any mail. At least she should write, no comments or whatever. So at least we are -- so if you can request Dipika to reply, please.
We will do that actually. We'll do that, and she will reply to you.
We have our next question from the line of [ Hemant ], an individual investor.
Sir, thank you for providing with the opportunity. Sir, a couple of questions from my side. Pardon me if these are some sort of repetitive questions. First of all, I would like to know what is the optimum capacity of B80 oil well? Currently we are doing 1,400 BOEPD in terms of oil equivalent per day.
Okay. You wanted to know the optimum level as such. Optimum level, you assume, and should be that right now we are producing 17 million cubic feet of gas. If we wanted to increase, we can go up to 20 million, but we restrict it to 17 million cubic feet of gas. That is equivalent to about 3,000 barrels of oil, right? And another 1,400 barrels we are producing. It is 4,400 barrels is under the current level.
Sir, what will be the optimal capacity of the B80 oil well?
Optimum capacity, we can go up to, say, 6,000 barrels and that we will be able to confirm it once the -- the test level is more than 6,000 barrels. So we will be going with the revenue as the optimum mode, not production as an optimum mode for producing from this block.
So you mean to say the optimum capacity will be 6,000 barrels?
Sorry, Mr. Hemant, can you use your handset mode, please? You're not audible.
So what I understood is the optimum capacity is 6,000?
Yes, 6,000, we will be able to confirm it once the gas streak, which is holding the pressure at the moment, once gets depleted, we will be able to get back to the test results. Then our optimum level would be, field level would be 6,000, but we'll be producing lesser than that in a manner to increase the plateau period of the field life.
And what kind of incremental revenue, sir, we can have it, and the optimum…
Incremental revenue, it depends on whether you -- how much you would like to share on that revenue, right? So I have to look at an optimum level, an optimum revenue mode in a manner that lengthening the field life will be beneficial to the company as a whole or blocking it immediately and paying -- getting a higher revenue number.
Any, sir, ballpark number?
Ballpark I told you, $350,000 a day.
350?
$350,000 a day from the field.
And sir, when can we achieve it, 6 to 9 months down the line?
We are already on [ $306,000 ], so another $50,000 we'll be doing it. We'll be able to do a [indiscernible] that should not be any problem.
We have our next question from the line of [ Ravi Nada ], an individual investor.
Sir, my question is on Dirok field. When do you see the [ 4S ] pipeline to be laid down and timeline?
Yes. I think we -- out of the total distance, we've taken the forest segment, that should be done in about 3 months' time, 3 to 6 months' time is what we are looking at, for the forest segment. And for non-forest segment also would be there.
And the total -- and total estimated time for full line to completed?
I think what -- in Dirok, the question which we have already highlighted, is the increase in demand will happen only when the gas grid is laid and connected to the -- within the northeast region as such. So right now we have the ability to produce much more gas, but the production is low because our offtake is low. So we expect the offtake to increase as and when the gas grid that is being laid by various PSUs gets completed. So we are watching that. Our idea on the project competition was too focused on the difficult forest segment, which we believe we'll be able to compete in about 6 months' time, the forest segment. The balance pipeline work, we'll take it up depending on the progress that is happening in the gas grid as such.
And the, sir, gas grid will be completed next year, I think.
Yes. But there's no point in doing -- completing our project and then holding on to the gas. So we will synchronize it along with that.
We have our next question from the line of [ Basu Puja ] from -- an individual investor.
Firstly, congratulations on the hard work that is being offered right now. I really appreciate the entire management team. Secondly, if you could guide, what is the total debt, including the INR 100 crore loan that was taken as short-term working capital for working issues in December? And like guided, you'll be paying off some debt in this June, July after selling this oil parcel. So after paying off the debt, what would be your long-term debt on the balance sheet and the short-term debt on the balance sheet? That is the first thing. Second thing would be the hoses, by when are you expecting them to come on the Indian ports. Any time line would be helpful.
We missed the second part of your question. What was the second question?
Is the hoses, sir, when are you -- when are you expecting the hoses to arrive on the Indian ports? Any timeline for that?
We have to go for a factory acceptance test of the hoses, which are already ready there. So it is basically we move it out of a container. So it should take up the factory acceptance test is over, I assume it is get done within about 3, 4 days. So by -- it will take another 15, 20 days to reach to the shore.
Fantastic, fantastic. And sir, since you're planning to go up with the PY1, are you planning to raise any capital by any chance?
You have one of the questions you forgot, and I'll answer that. Total debt. So total debt of the company is about INR 250 crores. And as we see it right now, we have reduced it substantially. And this is about INR 210 crores at the moment. And. year-end, we will be having less than INR 100 crore as of long-term debt.
That will be FY '24?
'23-24. Okay. Out of INR 100 crores, there will be a short-term component of about some INR 25 to -- INR 25 crores plus INR 20 crores, INR 50 crores would be short term and INR 50 crore would be long term.
And PY1, to -- for that field, are you planning to raise any capital by any chance or expansion?
No, I don't think our initial exposure, we believe it should be in the order of around -- it should be INR 64 crores, that's about $8 million, over a period of about 6 months. So I think we would be -- we'd not be needing any funding now.
And the BAT new wells will be drilled only after PY1 will start, right?
It's planned for only '26, '27.
And really appreciate the management. Whenever I write an e-mail, I get quick answers from your secretarial team. So yes, that's a great team that you are having.One small thing, if you can comment on the stake of HDFC that is there in the company? Because of their merger, they have to sell the stake. So if you could just throw some light on that part?
They are our investor, long-term investor, as such. And they are holding around 6.5%.
But the compliance suggests that they have to sell their stake in to various companies. And since they're holding in our company too, they will have to sell it, if I'm not mistaken, as per the SEBI norms because of the merger of Limited and HDFC Bank?
I don't think so. That is up to them as such because they are holding currently about 6.4%.
Right, right. So it is totally their call. If the compliance suggests, they will have to sell it.
I don't know about their -- what is their compliance requirements thereon. They are our long-term investors. And if there is a bigger -- the merger is too big and even for them as such, in such situation, if they take a call, they'll take a call.
And once again, congratulations on lovely set of number and very good hard work by the entire team.
We have our next question from the line of Ashwin Reddy from Samatva Investment.
Firstly congrats to the entire team on [indiscernible]. So I have one question, sir, again, on B80, which is, IS there a price at which you'd be okay to increase the revenue that we want to get from the field? Because the volumes can remain the same, so you're not defeating the [indiscernible]. And given that you have high requirement or, again, given that you outlined strong [indiscernible] over the next 2 years, is there a price at which you'll be okay to increase production or increase the revenue from the field?
So the price, what we are getting is we are anywhere above 15% of the Brent is okay for us. So that will compensate both for oil as well as the gas. If you assume $75 as an oil price, that 15% of the price is reasonable for us to sell the gas.
No, what I mean is -- I'm sorry, I'll be more clear probably. This is for the oil part. In case the oil -- in case specific oil price because even the volumes may be constant, 1,300, 1,500, whichever you want to -- whatever you want to fix the volume, the price of the oil goes up, then the revenue share goes up, right? So how would you tackle that situation? Would you ramp down the production or?
Yes, we will choke down in such a manner that, that will lengthen the [indiscernible]. We don't go -- that's where we have to -- we can't bring stock in such a manner that it will affect the reservoir. So we'll keep the reservoir as paramount importance than the production assets, than the revenue asset.
But in case the volumes are constant, the volumes that you want to have, is constant at whatever you have at the current level. But if the oil side [indiscernible] 100 or 120, whatever, what could you do there? Would you not take the…
If oil price goes up substantially, we would -- we don't mind to share more also.
Okay. So at the current [indiscernible] you want to keep at this level is the way to understand it.
We have our next question from the line of [ Jagvir Singh from Share Capital ].
My question is related to the -- I have only one question. This is related to the taxes. We are not paying any taxes. This is, I think, government regulation or what?
So we have carryover losses and we are adjusting the carryover losses. And once the last adjustment is over, then we have to pay the tax.
So in which year -- till which year these carryover losses will continue? Any idea?
Yes, we have about the deferred tax credit, which is in the -- around, say, the carryover loss would be about INR 800 crores to INR 900 crores at the moment. So then that will add with the current year, we have a BAT depreciation also will get added. So we'll be tax free at this current level at least for 2 to 3 years now.
We have our next question from the line of Samir Patel from Savvy Capital.
So my question is on PY1. You said we are going to do a CapEx of about INR 64 crores. But that I assume is only for this year, right?
On well drilling, if the success of that well drilling, we will go for further investment of about $42 million. That is about another INR 300 crores more. But our initial exposure, which we planned for this financial year and the apportion to go to the next financial year is INR 64 crores.
Okay. So that is one well. And what kind of production we are envisaging from there?
So we are expecting each well will contribute at least 5 million to 6 million cubic feet of gas. So the entire development is completed, we will be crossing 20 million cubic feet of gas from that 3 well.
From the 3 wells. Okay. And what kind of pricing we are expecting there on the gas? Will it be the same like the auction or?
It will be, we would like to go, that are going to be more or like a new development. And already the 25 years contract is over. We are in the 10 years new contract period. There should be a price to get to reopen. That would be a price of PPAC plus, that's what we are expecting.
And this PPAC is like kind of fixed for us like the 10%, and we are not going to have any ceiling or anything, right?
Actually, PPAC price, we are reasonable to get [indiscernible], but anyhow we are going for an injunction for an auction. If we get a better price, we'll go with it.
And even from the current Dirok, PPAC is applicable and that $6 is not applicable for us.
$6.50, which is fixed by the government is applicable only for the Government Oil India and ONGC for the legacy of nominated blocks.
And sir, the next question is on this upper Dirok. Dirok, I can understand we are going for the expansion. But for the upward Dirok, are we planning anything, one which we won in the auction?
I think upper -- greater Dirok, we have to drill the well. We are 100% holding on the block. So our seismic, we have to process, reprocess and acquire some additional seismic also. After that geology will come out with the location, then we plan for drilling. Not in this current financial year.
We have our next question from the line of [ Chandra Suria ], an individual investor. His line is disconnected.We'll move on to the next question from CS Chaudhry from CFS Financial Services.
Very light and macro kind of a question. The discovered oil fee policy when it came and you embarked on that journey as a management with your own depth of experience of all the people who have worked in the industry. So over the last 7, 8 years, with various hiccups and problems. So how much do you think that your richness of your experience has changed and gives you more confidence to deal with so many other offshore blocks that you're handling?
I think we are confident to say that we are the only one in offshore to put the field on production actually within the record time of 4 years. There's no other field or the block, which has come on to the revenue more so far. So we are confident about it, and we know how to select the right block, how to monetize it. So when the opportunity comes, we will embark on it.
Yes. This question was based more because there have been, without taking any names, there have been large explorers, domestic names also included, who couldn't execute on their own and then they brought in expertise and joint ventures and sold equity to get success and it took them an equal amount of time. That's why I frame this question. Though there was a difference that they were exploring and you have a discovered field. But -- so do you think that you'll be looking for more such opportunities on the offshore side?
Certainly, we will look for it when we come with the right block with the right quantity of reserves therein. And if it comes at the right model of revenue sharing, then we will certainly go for it. But all the blocks we bid for with the reasonability and we don't want to go into an unreasonable just to win a bid asset. When we win a bid, we mean it, actually, we want to develop that block.
[Operator Instructions] We have our next question from the line of Chitresh Lunawat from Gartner.
My question was regarding the hose connection. So sir, what kind of testing have you done or checked to ensure that the current monsoon period, it starts from this month, June, July, and August. So how confident are you on that?
See, we go with the advice given by the person who inspected it. And he is saying that it is all intact, right? That's the confidence level we are having at the moment. At the end of the day, no one can predict what will be the outcome during the monsoon, right? But we are parallelly placing -- placed our, as you're aware, we placed our orders, and we are getting the hoses in place. So with any eventuality, we will be able to replace them in a fair weather window, which may be a couple of days or even during the monsoon period, we will get some good weather for a couple of days. So with that, we'll be able to do that.
Pardon mylack of knowledge, but just wanted to check, do you get any insurance for this kind of things or it's all companies?
Insurance comes not for normal wear and tear, but this comes for only the accidental insurance. So if any damages occur on the whole damages occurred for some other reasons, then we can claim for insurance. If there is a cyclone and the entire platform or something happened to the vessels, then we can claim for it. But normal wear and tear, the insurance won't cover that.
And one last question, sir, like as you're producing oil, so currently, government is charging for the oil production, some royalty. So are we eligible for that? Or it's only for the biggest drills like ONGC and Oil India?
Royalty in our case is 10% on the price we realized. And there is nothing more than that for BAT. In other blocks, we pay for the gas 10%, oil 20%. And even for Dirok, we have to for the condensate produce, we have to pay 20% royalty and 20% CESS. And effectively, we have to pay 36% to the ground.
And one last question, the promoter stake in the company. So any plan for increasing the promoter share or getting increase in the shareholding?
This company doesn't have any promoters actually, you can see there.
We have our next question from the line of [ Nishant Maheshwari from Fellow Investments ].
Sir, my question is related with the PY1 and this Dirok or BAT. What is the cost of production? Because in earlier con call transcript, I read that our cost of per day operating cost is roughly $140,000 for this BAT and we are recovering rental to the extent of $98,000. So after implementation of that HP separator, which will increase our production for crude and natural gas, what will be the operating cost per day for BAT? And what is the cost of production for natural gas?
We are within the threshold of about, say, $15 per MMBtu. That is what we are within the net cost to us.
$3.16 -- sorry, $316,000?
Net cost to us per barrel reached in the order of, say, $16 to $20 per barrel, oil.
$16 to $20. Okay. For BAT?
For BAT. And Dirok, it should be in the order of around, excluding royalty and government levies, we are in the range of around $1 to $1.25 per MMBtu.
Sir, one more thing regarding this revenue realization. Where do we show this rental income in our balance sheet, in other income? And do we take standard deduction also? I mean, 30% which is allowed in income tax.
Actually it is a part of a consolidated accounts. You could have seen that because we have 2 subsidiaries and one affiliate. That is where the consolidated income is different. The difference between your standalone income and the consolidated income is the revenue earned by the 2 assets, major assets MOPU and FSO. And small revenue comes from [indiscernible].
Congratulations for the fantastic set of number.
We have our next question from the line of Ajit from Mirdha Securities.
I just have a follow-up question on one of the previous participant's question. That is regarding the charges reversal. So does this charges reversal related to MOPU only? Or is it related to Expro also? And if you can give the breakup?
It is related only to MOPU.
And when we can expect the first delivery from FSO, sir?
So we have to go for an injunction. The auction should get completed. After auctions have completed, then we have to look for [indiscernible] to offloading it.
So pre-monsoon or post monsoon, can we expect the post-monsoon?
We wanted to do pre-monsoon if weather permits.
And can we do it during the monsoon? Like is it possible, weather and all?
Normally it should be possible and that's what our handover as such. And if any eventuality comes, we will not be offloading, we'll keep it in stock.
And just last one clarification, sir, about the pledging of shares. Like there is -- there are some shares pledged. So any thought on that reduction or something like that?
As of today, there would not be any pledge of anybody's share.
We have our next question from the line of [ Anusha Shree ] from Alpha Invesco.
So I just had one question. So the reduction of charges that we have taken. So quarter 4, we were running BAT for the full quarter. So does these charges relate to the other quarters? Or is it for this quarter as well? How should we look at it?
See, it is a total settlement we made with them. We made an year-end adjustment that is further [indiscernible].
So for the quarter, the number would have been higher, right?
Yes, that's right. You are right.
We have our next question from the line of Rohit from ithought.
Yes, sir, all questions have been answered.
We have our question from the line of [ Sharat Sharma ], an individual investor.
Congrats on good numbers. Sir, at the current rate of production, what is the estimated field like of BAT and Dirok, please?
The BAT, we will be looking for a place of a minimum of 10 years, and the field life will go up to 15 years. That's what -- that's what the prediction of our geologist. And Dirok, we are going to do a reevaluation of the resource because we have got a production data for 4, 5 years, and we have to do the material balance. After that we'll come back with a new set of reserve numbers, which is higher than the initial numbers. We will let you know once the survey study is completed.
We have our next question from the line of [ Ravi Nagna ], Individual Investor.
Sir, what is the payback period of BAT field considering the current crude oil price?
All put together, we have invested, say, around INR 1,500 crores. If that is the case, if we make a revenue of, say, INR 300 crores, it should be 5 years. But if you look at it as a field alone, if you look at it, it should be around 3 years.
We have our next question from the line of Rishikesh Oza from RoboCapital.
Just one question, sir, if you could provide the contribution from gas and oil in the total revenues?
See, today's revenue has come from only gas and not from oil. The oil has been kept in stock. But some oil revenue, we have brought it into the East. The condensate revenue has come from the Dirok field. From BAT, there is no oil revenue at the moment. It is on stock.
So no oil revenues this quarter from BAT, I think, right?
Yes, right, it is in the stock.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Elango from HOEC for closing comments. Over to you, sir.
Thank you. By demonstrating continuous production during Q4, BAT asset is now ready to deliver consistently and serve as a growth engine for HOEC. We remain focused on ensuring safe and steady operations. We will leverage the organizational learnings from the project to capitalize on future opportunities. With a track record on driving production growth and well-established offshore and onshore capabilities, HOEC will now look at deriving further value from its existing portfolio of offshore and onshore vessels. Thank you.
Thank you. On behalf of HOEC Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.