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 Hindustan Oil Exploration Company Limited Q4 and FY '24 Earnings Conference Call. [Operator Instructions] There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. [indiscernible] from [ wells ] Adviser. Thank you, and over to you, Mr. [indiscernible].
Thank you. Good morning, everybody, and a warm welcome to you all. I'm [indiscernible] from [indiscernible] Advisors. We represent the Investor Relations of Hindustan Oil Exploration Company Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the company's fourth quarter and the financial year ending 2024.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call will be forward looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Statements are based on [indiscernible] beliefs as well as assumptions made by the information currently available to the management. [indiscernible] caution not to place any undue reliance on these forward-looking statements in making any investment [indiscernible].
The purpose of today's earnings call is to purely educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us today in the earnings call and hand it over to them for the opening remarks. We firstly have with us, Mr. R. Jeevanandam, the [indiscernible] Director; and Mr. Krishnan Raghavan, the Chief [ Technical ] Officer. Without any further delay, I request Mr. Jeevanandam to start with his opening remarks. Thank you, and over to you, sir.
Thank you, [indiscernible]. Good morning. Hope everyone has received the [ updated ] on this presentation. It is on our website for your reference. I have with me Krishnan Raghavan, our Chief [ Technical ] Officer, and [indiscernible ] our company security.
And the [ outset], we would like to highlight some of the achievements that to be the [indiscernible]. We believe that we are the first company we secured an offshore block in discovered small field with drone, one that has put the field on production. We think the stipulated time and share the revenue with them in India.
We have paid INR 162.5 crores to the government of India as a revenue share of [ BAT ] block as on 31st March 2024. In addition, we have paid 10% of the total revenues [ right ] to the government of India, INR 88.53 crores as on 31st March 2024. [ Our ] company has for the first time in over 40 years, made a consolidated turnover of [ INR 80.27 ] crores in the year 2023, '24.
Net profit after tax is also for the first time in the company's [ restrict ] INR 225 crores. All subsidiary companies are in profit more than the current financial year, '23, '24. Having said all about our achievements, I will now start with the operational updates about the Eastern [ retail ].
[indiscernible] gas sales for '23, '24 is 1.95 [ Bcf ] and [ content ] 36,618 barrels compared to 3.1 Bcf of gas and 58, 768 barrels per condensate in the previous year. During the quarter, [indiscernible] 0.5 Bcf and condensate 10,917 barrels compared to 0.59 Bcf gas and 10,840 barrels of condensate in the previous quarter.
Though the field can produce about 50 million cubic feet per day, we have to restrict the production due to lack of demand. Major players, OIL and ONGC are selling the gas at the prices applicable for nominated blocks. We are telling the gas that the [indiscernible] price without any discount. Therefore, the gas from the nominated that will be sold first and the balance demand is met by us at the [indiscernible] price.
The ceiling price fixed by the government of India are nominated will be 6.5 per MMBtu. The price achieved by us under the [indiscernible], 8. 82 [indiscernible] in the current quarter. PPA prices were made 8.9 per MMbtu. That were the customers who are mostly public are undertaking would like to [indiscernible] from [indiscernible] nominal appeal of [indiscernible] an oil [indiscernible] carriers start working and the great connectivity [indiscernible] service, this situation would get reverse.
We believe that once the DMPL line becomes a common carrier, there should be some uptick in the volume. [indiscernible] is in discussions with various stakeholders. We believe that once [ IGG ] laid it on line from Duliajan and [indiscernible], which is about 180 kilometers. The demand constraint will further be [indiscernible] is enabled to fully establish the connectivity of the Eastern gas grid to the central [indiscernible].
Also, this will ensure that an increase in stabilized optics from '25, '26 onwards to achieve the production to the full potential of the field. We have started the [ workover ] of [ Duliajan ] well. This well was completed with [indiscernible] 12 and 15 [indiscernible] screen, which will be pulled out for further cooperation and cleanup. While cleaning the same 12 and 15, it is planned to take present for hydrocarbon [indiscernible] testing.
On successful testing of [ PAM ] 9 and 10, a potential of the block will be announced substantially in addition to the revision of the resources in the existing producing sands. Downside of this testing of [ plan ] 9 and 10 is only the limited additional costs during October. After the workover [indiscernible], there are [ 2 and 2 ] more wells will be worked over. This process [indiscernible] seismic data with the revised ecological model and the material balance is being reviewed by GCA, and we expect an increase in the recording reserves at the field.
After these workovers, we plan for additional [ pool ] to producers to ramp up to 70 million standard cubic feet per day. In effort, we keep ourselves ready to meet a potential increase in demand. Once the demand concern is by connecting [ market ] gas to the national gas rate. Our subsidiary do improve the operator of [ Carsten Block ] and the group participating in this in the block after the review of the production data, continuous workover is planned for producing wells to maintain the current production as well as to increase the production.
We plan for turning 15 years to increase the production from [indiscernible] and [ Duliajan ]. And on exploration is to know the potential of deeper formations, such as lower [ Duliajan]. Some of the workover and additional corporations are providing positive results, though this block is producing from [indiscernible] formation for over 40 years.
[indiscernible] clearance has taken considerable time and on [ attaining ] the clearance, we will import controlling immediately as the tangible record such as [ wells], [indiscernible] were already procured and decent stock.
We believe substantial upside is in [ lower region ] is from Montara formation. This block will unlock substantial value of tending the proposed exploratory value. The connectivity of Eastern Gas [indiscernible] national grid, monetization of the gas discovery will be faster with a better price.
At [indiscernible] 100% participating in this in a block, [indiscernible] the block 19 [indiscernible] to [indiscernible] to be greater [indiscernible]. Reprocessing of the panic data has been completed, and our G&G team has completed the review. [ GT ] has been accrued to drill an exploration well with 7 seismic signatures. Due to heavy rains [indiscernible] not be constructed in time to move the rig for drilling before August 2024. We have made an application for 2 years RSC extension. And once the extension is rice from [indiscernible] PNG, we will drill an exploration bill under [indiscernible], we will do the second [indiscernible].
[ Interson ] the expected capital outlook for the next 2 financial year is about INR 250 crores, which will be further added in very sustained demand for gas supply. [ Tender block ] in Canada, the total conduct area is about 38 per kilometer with substantial number of wells were [ valuation ]. Wells there are being evaluated and good potential access in all the 3 blocks to enhance production.
One [indiscernible] signed, we could add additional value to the [indiscernible]. Currently, we feel [indiscernible] even with a leaser contribution to the P&L account. In part, it is planned to have artificial [indiscernible] in all 3 wells. We are planning for 2 development wells in [indiscernible] 2 will not allow to increase the production as soon as we get the normal clearance.
EC was expected before March. However, it is delayed. We have submitted the due clarification for all queries raised by the EAP, and we expect the clearance by June '24.0
Now I go on to offshore blocks. We are pleased to inform that [ VAT ] proof was sold at a price of price [indiscernible] [ 80.27 ] per barrel, as offloading of 430,000 barrels of oil was completed, and the total revenue of INR 287.37 crores is realized in the first quarter of '24, '25.
Production from [indiscernible] fuel for the year '22, '23 is [ 180 ] [indiscernible] barrels of oil and about 1.85 Bcf of [indiscernible]. And for the current year, it is 340,887 barrels of oil and 2.1 bcf [indiscernible]. Likewise, production in the last quarter was 95,000 barrels of oil and 0.4 bcf [indiscernible] and the current quarter from barrels of oil and about 0.3 Bcf of gas.
This [indiscernible] mainly to the block is that the exports [indiscernible] intermittent taken for chemical pricing increase of section. We would like to inform you that the [indiscernible] was activated by removing the blockage by chemical injection. [indiscernible] steam as well as banker carried out the operation in March '24 and the well is fully activated.
And the 2 wells flow was established to be [indiscernible] once again [ found obstruction ] in the oil export line. And so it could not test both the well for its [ afternoon ] flow for a sustained period. [indiscernible] side by using any various chemicals to remove the blockage and the export to line, but unable able to get the request record flow rate to test both the well.
Therefore, we have mobilized 15 boilers and indirect water [ but ] heaters with high-capacity pumps to clean up the export floor line. [indiscernible], and once all the achievement are lined up, we will shut the production for some minimum period and after the new cleanup, we will line up the [indiscernible] well.
We honestly hope that this will help us to get the optimal potential of the [ G1 and G2 ] and get a sustained flow rate. This period of [indiscernible] should be minimal, and we believe that the field will come up to normal production level by tradition from both the wells.
I moved to [indiscernible]. We are having on facilities, pipeline and other import structure expert for [indiscernible] of the gas and [indiscernible]. Current production from the steel is minimal. [indiscernible] was reprocessed and our new D&B team has evaluated under these 3 [indiscernible] locations. We have also carried out a third-party expert review, which is going to use of our team.
The ancillary on the gas water contact of North and South of [indiscernible] is different, which is indicating the high volumes, which will again be reviewed by a form of experts in London. After the third-party review being in line with our [indiscernible] interpretations, we plan for 3 development wells and if everything goes as per plan, drilling of the first well will come in April to June 2025.
Consequent to the issue of [indiscernible], which was result after a substantial and the continued low outtake of [indiscernible], we are unable to ramp the production to the expected level. We are progressing the upgrade of grid in the results of producing blocks by carrying on the material balance with available production data. We have also lined up the capital program for about [ INR 5,000 ] crores in the next 3 years to drill a substantial number of development and exploratory wells. This will create value below the ground as well as about the growth and position the company with a reasonable and stable cash flow to achieve a subjectives.
Now I will update on the financial results. Stand-alone revenue for this quarter is INR 254 crores compared to INR 109 crores in the previous quarter. Revenue earned for the current financial year is INR 544.28 crores compared to INR 411.1 crores in the previous year. Revenue increased mainly from sell-up PAT crude in the current quarter.
B-80 revenue for the current quarter is INR 203.57 crores compared to [ INR 48. 43 crores ] in the previous quarter. This is mainly due to the oil sales. Current quarter increase is mainly through the oil sales of which is INR 172.40 crores. B-80 revenue for the current year is INR 354.47 crores compared to INR 144 crores in the previous year.
In case of [indiscernible] revenue for the current quarter is INR 47 crores compared to INR 57 crores in the previous quarter. Revenue for the current year is INR 175 crores compared to INR 250 crores in the previous year. ,Field operating expenses for this quarter in the stand-alone accounted INR 67.93 crores compared to INR 76. 23 crores in the previous quarter.
Operating expenses for the current year INR 267.7 crores compared to INR 169.5 crores in the year. Others, including DB finance costs and other INR 60.8 crores compared to INR 77.74 crores in the previous year. Value will stop in [indiscernible] on 31st margin INR 33 crores, whereas the value soft in [ FSO ] in the previous year was INR 73 crores.
Stand-alone EBITDA for the current quarter is INR 29.45 crores compared to INR 16.74 crores in the previous quarter. Profit after tax in the current quarter is INR 19.1 crores compared to INR 4.82 crores in the previous quarter.
The EBITDA for the current year is INR 133.05 crores, I mean stand-alone compared to [ INR 23.7 crores ] in the previous year. This is mainly due to the reduction of revenue of [indiscernible] by about INR 75.6 crores. Profit after tax for [indiscernible] INR 84 crores compared to [ INR 160 ] crores in the previous year. Major reasons for the decrease in profit team the revenue from [ Dirok ] can charges for facilities have increased from 187 to 315 days.
In consolidated accounts, the total revenue for this quarter is INR 330 crores compared to INR 193 crores in the previous quarter. This was due to crude oil sales from B-80 block. Revenue for the current year is [ INR 8730.27 crores ] compared to INR 592.2 crores in the previous year. We are reaching about $100 million on our [indiscernible].
The total operating cost in the consolidated accounts for the year is INR 552.5 crores compared to INR 3238. 31 in the previous year. In the current quarter, it is INR 241.5 crores compared to INR 137.3 crores in the previous quarter.
Reasons for the different strategies [indiscernible]. Control accounts EBITDA for this quarter is INR 77.67 crores compared to INR 82.1 crores in the previous quarter. EBITDA for the current year is INR 326.82 crores compared to INR 324.98 crores in the previous year.
Consolidated profit after tax is INR 70.61 crores against INR 40.57 crores in the previous quarter. This increase is mainly to the exceptional item of INR 32.87 crores due to fair value adjustment of the existing share of [indiscernible] once the business combination.
Consolidated profit before tax for the year is INR 248. 29 crores compared to INR 197.29 crores in the previous year. Consolidated profit after tax for the current year is INR 226.43 crores compared to INR 194 crores in the previous year. [indiscernible] May 2024, the outstanding loan in the stand-alone account is INR 75 crores and in the subsidiary [indiscernible] crores. The company has repaid the loan of INR 442 crores in the current financial year. The company has a stable rating for INR 500 crores band loan from India rating. With the current cash position and with the continued production, we will meet all our obligations, including the proposed to [indiscernible] program for the coming 3 years as planned. That's all, we can now open the forum for questions now.
[Operator Instructions] The first question comes from the line of Rishabh [indiscernible] with Motilal Oswal.
This is Abhishek. Am i audible?
Yes, [indiscernible].
Yes. Yes. So just 2 questions. So one on B-80. So how long Dirok [indiscernible] this shutdown be? And once that is completed, then is it fair for us to assume that both the wells could produce at the same level where they were before [indiscernible] happening. So I think at the gross level, the being about 3,000-odd barrels of oil equivalent per day. So that's my first question.
Thanks, Abhishek, and this is -- the work is will be started, and we expect a very, very minimal duration of shutdown or cleanup operation. So at the end of the day, it depends on the consuming of equipment on board. So we believe it should be a very minimal period. And now both of us are getting activated. We will be able to test the capacity of the well once the export line is [indiscernible]. Now we believe we should be able to get back to the -- before cyclone on [indiscernible] 2023. But there might be some variation in the gas production, a little increase in the oil production. And we will test the flow for some time, and we'll let you know.
Okay. That helps. And sir, if you can give us some updates on the India [indiscernible], what is happening over there? And when can we expect progress on increasing from [indiscernible]?
Abhishek, what I understood is that lines are made, the compressor and the connecting facilities are to be made. One that is -- I mean, it takes some time and it should be operational at least by the third quarter and by all means, by the fourth quarter. That's what we expect. Meanwhile, the [ DMP ] in line they are planning for [indiscernible] common carrier. Once that becomes a common carrier, then it will be further [ restore ] and we will be able to ramp up the production a little more than what we are doing now.
Okay. And [ BNP ] in line for now is -- I mean, oil India is using it? Or how does it work? And I think post common carrier, we can also use it.
Yes. I think is, it is [indiscernible] line contract carrier at the moment. Now it becomes a common carrier, I think I understood that [indiscernible] Chairman is sitting there. And the [contract ] carrier has to become a common carrier. When it becomes a common carrier, you can -- on a tariff basis, you can [indiscernible] that will get on the grid connectivity there, it can go to the [indiscernible]. That's the idea.
Next question comes from the line of [ Vikram Kotak ] with [indiscernible] Landstar Investments.
I have 2 questions, but one I think you answered already to earlier participant. What are the CapEx numbers for the next 2 years? That's the question one. And also what is the oil and gas mix now in B-80 for FY '24?
To that CapEx plan for the 3 years is about INR 1,000 crores. And what happens, we have to that magic junk of for the B-80 development that is for the third year. [indiscernible] roughly around annual exposure is about some INR 300 crores per annum. That will be supported by our cash flow and the mix as such, we are producing about 8,200 barrels [indiscernible] gas is almost [indiscernible].
The next question comes from the line of Rishikesh with Robo Capital.
My first question is [indiscernible] for a net production for the upcoming 1 or 2 quarters? And what more production are you targeting for FY '25?
So we [indiscernible], I don't go through any rejections for this business basically because many importers we have to come up with us. We can have the reference predictions. Our -- we would be improving our current production level once both of those are growing from the B-80. And if there is an increase in the demand and [indiscernible] will be the determinant paces for the coming financial year to increase the production.
Okay. And so my second question is respect with our B-80. [indiscernible].
Can you repeat the question?
Yes. My question is with respect to B-80. Chemical is not fixing [indiscernible]. Are we now mobilizing the rate and when can you expect this to the optimum production level?
We are in the process of cleaning up the export flow line. Once the cleanup operations are over, then we will be testing the well for some period after we can get a solid set on it and get the [ pressure ] stabilization. And then we will be observing for about 7, 8 days, and that would be called as a sustained cash flow of the well. So that way, we will test both of us in such a manner, then we point both the production and that would be determined as the level of production from the pilot.
Okay. Okay. Could you just share your revenues from B-80 for Q4? We wanted to know the revenue from the [indiscernible].
[indiscernible]. I can tell you that [indiscernible] about INR 47 crores. And B-80, you have to look at one abnormality because the entire [indiscernible] which was store has been sold, which is about INR 23 crores.
Next question comes from the line of Rohit [indiscernible] for investment.
So my first question is the problem at [ B-80 ] right now. So will it be impacted by the weather window? So do we expect it to get toward the before month or will it get postponed after the month?
Yes, I think we have carried out all the precautionary measures and the inspection and change of weather and the maintenance of the SBM is carried out are and [indiscernible] instruction also carried out. And now no one can take the [indiscernible] of the monsoon. So that's the position and such to ourselves, we are fully prepared for meeting any eventuality.
So basically, it can be done during the monsoon?
Yes that is right. Before the monsoon in itself, we have taken care of it. We change the [ houses ] and we did carry out the maintenance, and we did inspect [indiscernible]. We believe that we have taken adequate precautions. The weather remains to be unpredictable by anyone.
So sir, right now, in Q1, what is the production for B-80?
You show quarter 4 [ isn't there].
So for quarter 1, sort of [indiscernible] so both the wells are not functioning right at the level that we want to. So right now is [indiscernible]? Or are we producing at lower level?
So we are today, because of the market of the clone, we will not be able to tell the exact volume, which comes a little more on [indiscernible]. So we will be able to get back to the normalcy once the cleanup is completed.
Okay. Sir, my second question would be, so if you look at B-80 overall, it's been 3, 4 years since we started the field, there have been multiple delays certain and things which are not in our end. So I just want to know because of the various problems that have happened in the field, will there be any impact on the overall production? So we were targeting to be around net around 7,000 barrels. So do you see any change in those numbers? Any impact on those numbers because of the various problems happened over the last 3 to 4 years?
Actually, if I tell you precisely, we have started on June [indiscernible] 2022, for 2 years now. I agree with you. Now see, we are not worrying too much about the below the ground research and [indiscernible] the ground facilities are [indiscernible] which we are trying to solve one by one and if we -- if I say in this production level, we will be planning for drilling 3 more wells to fully exploit [ the ] block. The expenditure level should be around $50 million. So that's what we plan 2 years down the line. Once we [indiscernible] reached to that level, we can reach to the plate of production level what you are indicating to me. With the current [indiscernible], we won't be able to [indiscernible].
Got it. So overall, there is no change once the problem is solved, we can still reach the levels that we want it to be earlier, right?
[indiscernible] than the current production level up June 2023 can be continued. But you will reach to the level of the number you indicated to me more than 5,000 barrels and gas and [indiscernible] . It will be possible. Only after drilling the additional 3 wells which [indiscernible] with the cost of about $50-plus million. That we are planning at the end of [indiscernible] -- planning for the third year. Now the first year, we'll concentrate on our anchor and 1 well at [indiscernible]. B-80 we get back to spending of -- producing from [indiscernible] only on [indiscernible] 2026, '27. Sorry, '27, '28.
Next question comes from the line of [ Manan Mundra ], and individual investor.
My question is regarding the Dirok-2. Just wanted to understand, currently, the reduction in the sales volume in the Dirok [indiscernible] due to the supply side pressures or the demand side pressures?
The weather impact, we can be able to supply 45 million to 50 million cubic feet per day even tomorrow morning. But the fact remains we don't have as demand for that update. That's the reason we have to [indiscernible] our [indiscernible].
Okay. And once the Northeast [indiscernible] gets connected and the [ central ] gets connected, the demand is going to pick up. But just wanted to understand, is it going to impact the premium prices that we are charging? I'm supposing the gas flow is by direction in the flow lines. So can you please clarify on that?
What happens, you'll get a better price because it gets connected to the national grid. So the additional cost to you would be only the [ tariff ] counter line. [ Tariffs ] are pumping the gas into the line. You will be getting the price that is in the Western region, you should be getting the price in the same in the Eastern region. But what also minus only the tariff charges. So in FX, we should be able to always get around PPAC.
Okay. And that includes -- I mean, after netting of the transmission charges, right?
That's right. So we have to look at [indiscernible] because if the price also will move up once it's connected to the national grid. So any increase on that price will certainly offset by the increase in the cost on a conduct [indiscernible].
Okay. My second question is on the [indiscernible] field. We are planning to increase our output and having more exploration wells in that part, right? So how do we -- is there already a pipeline for extracting the oil or -- or how is it done currently? And what are the future plans on that from that?
So [indiscernible] Oil India is also operating in that area. [ About 36-kilometer ] line needs to be laid, then it will connect to the grid. I don't know the exact name of the place, which we [ recited ] also. It is about 26-kilometer line only to be laid to connected to the Eastern Grid, then it will automatically get into the national grid. Because there will not be any problem on monetization [indiscernible].
A reminder to all the participants, please restrict yourself to 2 questions. Next question comes from the line of [indiscernible] with [ MK Ventures ].
Since [indiscernible] these wells are being shut. So like what can give us the date or the [indiscernible], they're not functional.
I couldn't get that question.
You're currently having some shutdown in our [ D1 ] well, right?
Shutdown because of the [ refi ] blockage that has been rectified. Now both the wells are fully active.
Okay. So for how long was this shutdown?
No [ future], it will be a very, very limited duration, and our people are working as we speak and we will let you know once the land cleanup is over.
Next question comes from the line of [indiscernible] with [indiscernible].
Hello. Am I audible?
Yes, yes.
Yes. Congratulations, sir, for the activation of both the wells. So my question is regarding -- so any idea what could be the oil and gas production from D1 and D2 wins, respectively, after the export line is clear. I believe we had guided for a 3,000 [ BOE ] from [ VAT ] in our last call. Is that the number we will be sticking with? Or what is your expectation?
So I wish my visual projection is 3,000 barrels of [indiscernible] equivalent per day but we should be certainly [indiscernible] level of 2,500 as the reference what we observed last few days.
And sir, how many days was the D2 well operating in the last quarter?
D2 well was operating on and it was almost on a continuous basis. But expect for some intermittent [indiscernible] injecting the chemicals.
Next question comes from the line of [indiscernible] with Unique Stock Broking.
Yes. Earnings [indiscernible] outdoor retails, you have mentioned and I think [indiscernible] supposed to be disclose or decide on the disclosures and inform. So can we understand what exactly went in the meeting and what is decided?
What is the question [indiscernible]? I couldn't get it.
With disclosures, what is given be given to the stock exchanges? In your outcome of [indiscernible], you mentioned that now the Board has decided on some policy And that I think yourself is going to decide on the material event and inform the exchanges. So can we understand what happened in [indiscernible]?
So this is based on the set guidelines. They put a threshold actually that we updated in the policy.
I did not get the answer.
We have updated our disclosure requirements in our governance in accordance with the [indiscernible].
Can we understand [indiscernible] that when the even when it was activated which [indiscernible]?
It's -- we have activated the well on 2 occasions. First of all, we have to see the well activation is not a [indiscernible]. We have to see that the well is getting activated and stabilizing the flow. And then what is the bad pressure it is having with the existing facilities.
So many parameters we have to check and every time we wanted to see this well is in a good condition to flow continuously that we have established in the end of March. But we were not able to test the flow rate. So that's why we couldn't come back and inform [indiscernible] the well activated, and this would be the flow rate and other things. because of the docket in the flow line.
Now we are trying with the chemical injection is clear of the blockage that was not so successful. So now we are mobilizing team as well as the hard water. And both things will be as we speak, it is on the platform and they will do the cleanup operations. Once the cleanup operation is completed, we will put the well and the well sustain the flow. Once a sustained flow is confirmed, then we will [indiscernible].
Next question comes from the line of [indiscernible], an individual investor.
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language]
[indiscernible] they have [indiscernible] chemical the block [indiscernible].
Next question comes from the line of [ Pasi ] and individual investor, please go ahead.
Sir, my question is in regards to the previous question by [indiscernible]. What is it that vehicle guys did and why they were not able to fix it in now being the export, they should have been able to fix? So why were they not able to fix it? And why do you think that you will be able to fix it. That they were not able to fix it. That is first thing.
And with the same question, another question comes like in the same thing. That are we changing any [indiscernible] the line on the pipe or the host right now when are [indiscernible] is being mobilized currently? Or not? Because if there is a problem in the line, I remember you mentioning in previous calls that we already have that hot flush line there which is already installed in our facility. So what new [indiscernible] is going to do it right now? That will help us to fix the problem.
Yes. [indiscernible] the backer was mobilized for well activation which we made and both the wells are active right.
[indiscernible] you mean to say when you say active, does that mean there are [indiscernible]?
The activated means the well can flow, once it is running the line means [indiscernible] I have a limited storage asset, so I cannot store the oil at the [indiscernible]. So once the line is fully cleaned up, both the wells can flow to its optimum capacity, right? Till the time, if I wanted to flow more than [ 32 party ] barrels the land gets [indiscernible]. So that's the problem. Okay? We will clean up that line.
Second thing is your question on it. We were talking about we have made an insulation on the cost side as we have sold in the last time. Then we have [indiscernible] indirect water bath heater. This is all functional now. But the temperate required [indiscernible] it.
The main reason for it [ uninsulated ] rises about 95 meters. And that also we are planning to insulate. In essence, there is an element of heat is required in the oil is [indiscernible] getting pumped into the export flow line. If the temperature is high, then there would not be any [ VAT ] formation. If the temperature is low, that continue to [ lever wax ] formation. This is a process, and we are learning and we know how to clean up [indiscernible] in 3 months. So we are the first time attempting the [indiscernible] team and indirect water [indiscernible] get the maximum keep getting into the [indiscernible] that appearance temperature, that [indiscernible]. You look at [indiscernible] [ 80 ] degrees, it will melt about 52% and [ 90 ] degrees, it will melt about 65%.
So we are attempting to clean up the line as much as we can with this deal. Once this is done, we believe that there would not be any further obstruction and using the chemicals on a continuous basis. And this causes we will continue once in 3 months to enable us that there is no blockage in the export flow line.
Next question comes from the line of Sunil Jain with Nirmal Bang.
Continuing on this, [indiscernible] has clear with resolve the other problems. And once the line gets clear, then those problems got fully resolved or not, we will come to [indiscernible] thereafter, am I correct?
Yes. That's right.
And the flow line is not a onetime problem. It's a continuous problem and you need a continuous solution for that. Whatever the solution you would come out that will be therefore continuous process?
What happened, there is a [ VAT ] on the [indiscernible] the [indiscernible]. Once you have the clean line, further deposition can be arrested by investing the chemicals. We identified some chemicals [indiscernible] and we will pump it along with the crude, so that will stop further accumulation of the [indiscernible] in the line.
Next question comes from the line of [ Mama ] Patel with Care Portfolio Managers Private Limited.
In the last call, you mentioned that the FY '26, we can do net 10,000 BOPs. [indiscernible] draw range of what can be other fields contribute in this number?
See, [indiscernible], giving any projection is depending on the continuous production of the B-80 and [indiscernible] [ offtaking ] the [indiscernible]. Then what we are planning for the other [indiscernible] and some ramp-up in the small contributions will come also convert and [indiscernible]. So 2 already existing asset in assets can be -- can increase the production and the new assets based on the other program of drilling and other things were covered, we will be able to increase.
Can you give a broad range, how much [indiscernible]?
I think it's too [ immature ] to give you any guidance on this.
Next question comes from the line of [indiscernible].
My question is kind of in continuation to, I guess, the previous question that was asked. See, sir, for us, as investors, we like a certain degree of predictability and not too many surprises. But I have been following our company for the last 5 years, and there has been a lot of ups and downs and unpredictable surprises coming our way.
And even now, we are unable to really estimate what the current year or the future also in that sense it makes it very difficult for us as investors to really -- on how to value the business. So what, in your view, sir, is a time line that you can say that, okay, maybe in this time period, we will be in kind of a steady state where we'll be able to sustainably and safely predict our revenues and our production, et cetera. Because every year, it's been kind of very topsyturvy and that puts us in a bit of fixed on how do we really value the company or the business? Any thoughts you can share on that to help us?
I would like to submit one fundamental fact. Oil and Gas business, there are 2 ways. We are looking back only from the monetization that is [indiscernible]. But the below the ground value also matters a lot. Now this company is sustainably increasing its [ reserves ] and resources over a period. Now that [ resource ] and resource basis have to be monetized.
There are certain impacts on monetization. Because certain things are beyond our control. For example, we are ready to flow the gas and there is no demand at the [indiscernible]. Similarly, [indiscernible] not in our predictions. Yes, we did not a great job on our tax rate facility that has created some problems on the [ PAT ]. Then it is a learning for us, and we are trying to fix it up. And as you see that the uptime of the facilities of '22, '23 was about 60% that we have increased to 86% in '23, '24.
So these are the ways we are also trying to do our best to get on to it. Then what happens when the price -- the price is not in [ enough ]? The price moves up and down then currently the things going on. As a gas company, I am comfortable to say that to you, the underlying value of the assets are increasing, it is substantial.
But the monetization to the expected level is not getting reached even to our visual projection, we are not able to achieve because the impacts are beyond our control. But we believe that the next financial year once the lira production comes and the stability on [ DAP ] production and drilling up questions and some of the workovers which are doing is in [ Iraq ] and the [ belt ] to be drilled in Western regions, this will [indiscernible] some more stability in a growth mix with growth.
Okay. Sir, we have been very patient with the company, and I think the company has a lot of value, as you said, but we will be more patient for another year also. And hopefully, by next year, as you said, the thing stabilizes and we are able to predict, go on a predictable path forward and reach the production levels that make us happy.
[indiscernible] it is our digital projection also, we should do better, better by monetizing the existing assets as well as creating the new assets. Thank you.
[Operator Instructions]. Next question comes from the line of [ Bhavik Shah ] with MK Ventures.
It's really disappointing to see that how the mediator is handling the call. We are not even allowed to answer a question, a follow-up or a second question. The call [indiscernible] high or something or what?
So that my second question was, sir, what is the CapEx plan for like FY '25? Can you just break up into segments? Where are you going to invest? And what are the return issues are you seeing there?
See, our CapEx plan, I told is INR 1,000 crores. which will be -- every year, we are planning to spend about INR 300 crores. If you have seen in the last financial year, '23, '24 we have repaid the loan to the extent of [ INR 235 crores ]. That now current financial onwards, we will be embarking on the investments, and we could have got some more investments made on the carton, which we could not do [indiscernible].
All the INR 300 crores will go basically be [indiscernible] for this year. Is that what you mean?
No, it [indiscernible] I'll tell you that we will be going [indiscernible] for about building the wealth and working over and creating a facility in Northeast, it is about INR 250 crores to INR 300 crores. If the demand picks up, we will [indiscernible] and we plan some [indiscernible] for something on the Western region and something on the [indiscernible]. On the last year, we are 3 years -- 2 years down the line, we'll be again going for drilling 3 wells at planned in the [indiscernible]. Thank you.
Next question comes from the line of Anushree with Alpha Invesco.
So I had another question. So in the PY-1, we have -- do we have the [indiscernible] platform installed and post all the drilling and when do you expect the production to start from PY-1?
So PY-1, we have carried out the pricing fee processing and third-party review. Our team has released the 3 drilling locations. This will be again reviewed by an expert from East London. Once it is true, the parcel, we are planning in June 2025. That's what our plan at the moment.
Once the wells start drilled and we determine the floor rate, then we can tell you actually what is the [indiscernible] we will be able to [ fund ].
And sir, so is the platform ready?
[indiscernible] it is [indiscernible].
Okay. So the infra is ready, is what I'm asking.
Absolutely all we can evacuate up to 55 million cubic feet of gas and about 2,000 barrels of condensate. But unfortunately, we -- our 4 [indiscernible] are large [indiscernible] producing more than 1 million cubic feet of gas. And where the 3 planned wells, there should not be any concern on the facilities, and we will be able to quickly monetize on some drilling and completion and facilities are getting connected to the place from the place.
Ms. Anushree, please rejoin the queue for more questions. Next question comes from the line of [indiscernible] with [indiscernible] Financial Limited.
One of my questions have been answered. My first question is with respect to what is the approximate operation -- operational days of [ BKP ] in Q1? For this quarter.
For this quarter, right? So this quarter, it's the entire 91 days out of that [ date]. Intermittently, you can take the number of [indiscernible] shut down, it's about 4 or 5 [ was ] together. These are roughly around 25 days we were on production.
Sorry, sir, your voice was unstable [indiscernible].
About 25 days. Can you hear us now?
Yes, sir. And I said it on the last month, right? Last quarter. In the last quarter [ '23 ].
Next question comes from the line of [indiscernible].
I have a couple of questions. First question is regarding B-80. You made around INR 200 crores in Q2. And sir, currently, what I understood that you are running with 1 well. So considering 2 wells fully operational, [indiscernible] like is it correct to compute around INR 400 crores of revenues from B-80? This is my first question.
And sir, regarding Dirok. The second question is regarding Dirok. You said like around 200 million standard cubic feet you are excluding Q4. And you're like connecting the national gas [ grid], you will be able to produce around 70 million standard cubic feet. So once this line would be -- would get connected. So can we expect -- you met INR 56 crores in Q4, I think. So can we expect -- like it will be 3x wells in that case, your revenue will make your -- output will grow up to 3x from 23 million to 70 million.
So can we expect around INR 150 crores of revenue once it will be fully operational? This is my second question.
You can refer that Dirok 22, 23, we have produced about 3.1 [indiscernible] debt for our shares and about 58,000 barrels [indiscernible]. In '23, '22, it was about 2 million [indiscernible] of gas and [indiscernible] barrels [indiscernible]. So that net revenue before finance cost was about INR 191 crores on 22, 23. It has got reduced to INR 117 crores. We've actually lost about INR 73 crores. For this -- so this would get reversed when we reach to the level of production of 22, 23, and it gets into the multiples, but similar numbers will get inflected.
[indiscernible], please rejoin the queue for more questions. Next question comes to the line of Rikesh Parikh, an absolute adviser.
This -- from B-80, I think, sir, our agreement for the gas price sale is getting expired. So can you give some thoughts on how we are going to take it forward here on here?
I think they have got -- we have [ explained ] that we have got the auction completed. And the price we will be now getting is about 12.2% of the -- 12% of the [ Brent ] price, which was much higher in the previous year. It's about 22%, now reduced to 12%.
Okay. So if proportionately, if you are to look at it of around [ $16 ] what we call the relation that will reduce around [indiscernible] [ dollars ].
It will be around 12.2% of the Brent price.
[indiscernible], please rejoin the queue for more questions. Next question comes from the line of Rohit with ithought PMS.
Yes, I have the same question on the repricing of the gas from the [indiscernible]. So this is -- are you saying that this is 12% of the crude, right?
12% at the Brent price. .
12% of the Brent price, understood. And sir, in terms of B-80, the pending issue that we are trying to do with the export for the [indiscernible]. There, I was not clear. So is it contingent on the monsoon or it is not continuous on [indiscernible]? Can you explain that? I would want to understand that.
And any time lines you were sort of talking about? And has the work already started? Or are we waiting for equipment if you can just maybe explain now?
The equipment is already on board. They will be starting to work on the line of the -- it may be taking a couple of days. And that's a period, we'll go for a small period of shutdown. And once the line cleaned up, we will again reconnect both of those.
And second thing regarding the inquiry on the margin, we endeavor to operate during the entire monsoon period. But see, the monsoon cannot predict if that's the issue. If any. So that we're fully prepared to operate during the monsoon, [indiscernible] monsoon.
Mr. Rohit, please rejoin the queue for more questions. Next question comes from the line of Vishal Prasad with [ BP ] Capital.
So approximately INR 280 crores [indiscernible] of crude. So what was our share out of INR 280 crores? And what was the share of the profit?
So we see, we always look at our participating [indiscernible] 60%.
Okay. So out of 50%, 60% is the revenue as well as profit?
That's right. The record [indiscernible] will get adjusted for the outstanding cash flow [indiscernible] the other parties.
Okay. Another question is, I think it's been happening for last 2 years, and I have asked a lot of times [indiscernible]. So in your view, when you see at B-80, I mean how are you going to solve the continuous problems that we are facing? And is there an end to the problem?
I think I would like to tell you one thing. So we build the wells successfully. And the top sale facility is having the issues initially. Now but the day, it has been implemented, that was during the COVID period. So we are in a difficult situation, but we implemented the project.
Now we will be able to solve the problems one by one. And because it is too difficult, it is like a structure and it has already been installed, there's no possibility of just throwing it away and get a new one done. So every small issue comes [indiscernible] and when they are rectifying it. Now being an offshore, you have to look at the uptime, uptime of the facilities. If you look at the uptime of the facilities of 22, 23, it was about 60%.
Now it has gone more than 88%. So in a manner that we will gradually improve it comes around the 90% to 95%. So that's what we are planning for it, and it is a learning ground for us because the crude -- quality of the crude is [indiscernible]. And it was not expected that this continuing of the [ bat ] deposition will be so high in the flow line. that was not anticipated. Now considering that happening now, we have to take a preventive measures.
So that's the reason once the line is getting fully flushed out. We have to put the chemical, which not allowing the further deposition of the [ WACS]. But this is a continuous process now to keep the facilities all base and proper maintenance as well as the lines were on. So we are learning, and we will be doing better work in the coming years. That's the way before the importance more than drilling, we should be in a position, our facilities can handle the additional volume without any issue. That's what we are planning for.
Mr. Prasad, please read the queue for more questions. Next question comes from the line of Tejas Shah with Unique Stock Broking.
My question is answered.
Next question comes from the line of [indiscernible] with [indiscernible].
Yes. So my question was on the exploration block of 2017-'19, which is in the [indiscernible]. So is it going to be a gas and oil field? Or can you just share any data on that?
Our prognosis at the moment is more of a gas.
Okay. Okay. And my second question is, sir, can you just share any policy updates on the terms of government in terms of domestic oil and gas exploration in the [indiscernible] of how OLP has performed over the past 4, 5 years? And what do you see forward in terms of domestic gas -- oil and gas explanation.
I think there is an all out -- there are many blocks have been offered. And recently also, they put some blocks, which is taken by somebody, which is getting recycled. So we believe that most of the block, which is discovered will be coming for auction. And that's the time we will also having our experience in both offshore and on ship. We will be able to get on to some of the -- get into some of the blocks as a reasonable [indiscernible].
Next question comes from the line of Mayur Patel with Care Portfolio Man0agers Private Limited.
I request the moderator to allow me to have the follow-up question. So my question is, margins in FY '24 has fallen significantly and more so in Q4. So what is the major reason for this?
I'm sorry, I couldn't get the question exactly. Can you just tell me?
Margin in FY '24 has fallen from FY '23 levels, and the Q4 margins are relatively lower. So what is the major reason for this fall?
See, we were in the similar line of '22, '23 comparing to '23, '22. Because what has happened was there was about some INR 80 crore reduction on account of the -- some INR 75 crores, actually, that is a reduction in the drop and about INR 55 crore to INR 60 crore increase in the B-80. So what is happening is Dirok, we have lost some of the revenue in Dirok because of the lack of demand. And we have done some better performance in B-80 that get offset.
So when both things are doing well, we will be doing much better. But if the Dirok goes to 35 million to 40 million cubic feet of gas, which was done once upon a time. Similarly, if the B-80 continued and stable production for at least 90% of the uptime [ then better ].
So can you explain the margins to go back to FY '23 levels by the next year? Or will it take longer?
I think we will be doing better. That's what we believe in, but in one [indiscernible], which is not in our control.
Our next question comes from the line of [indiscernible], an individual investor.
I have [ 2 types ] on my questions. Can you explain me the economics of the B-80 project? What would be the fixed cost on a daily and annual basis? And what are the variable costs in terms of [indiscernible] and et cetera, as a percentage of the revenue?
Okay. The variable cost because the facilities are getting resourced in most of them, that is a MOPU and [ that is owned ] by us. And total cost because that is like if you've taken it primary third-party contractor, you have to pay that money. That is the pipe of the matter. So it's about $140,000 per day. Okay? Now that you divided by 2,500 [ square ] barrels [ equivalent ], that would be the third barrel [ fast ], right? .
That is more or less fixed actually. And we are a little lever because if there is a delay in payment or not taking being our own facility, we can run that. With that, I take stand-alone B-80 which the government share, we are not making much money. But in co-mingled with our other assets, we make money.
Okay, sir. And [indiscernible] you mentioned, MOPU and FSO and [indiscernible] B-80, what would be the revenue and EBITDA margin that HOEC would make? And what are the operating organic cost in the subsidy? And as the revenue also, would the revenue be impacted with the relevant shutdown you had mentioned when the wells becomes non operation? And if so, how much would that be?
To tell you your question, the revenue -- we will be charging when there is a production there in both. Second parts are not -- the other, for example, helicopters and offer support vehicles, which we have to pay [indiscernible] unless they are shut down on their own. The [indiscernible] as whether the field is operational or not. .
But in case of MOPU and FSO, we will be charging only when the -- it will return production more not otherwise, right? If you take the $140,000, today, we [ don't ] make much EBITDA on the quarter 4 of the [ '18 ], it is on negative and quarter 3 automotive. So unless the production improvement takes place, we will not be able to make much money in the B-80.
Okay. And just to clear out the shutdown would not have great impact as of now. Like on the revenues?
So it's not a question of shutdown impact for revenue to us because if there is a few shutdown than we are -- because of our facilities are not operational, then that takes a hit down on our account also, right?
Yes, sir. But could you give like a ballpark on how much would that affect us in terms of remedy, any rough numbers or anything like that or a percentage?
It's a charge [indiscernible] like a third-party contractor, I'll be -- we will be charging there to pay for it, right? Luckily, we have got the MOPU and that is owned by [ our charity, more ] subsidiaries. If that is some third-party contractor, B-80 wouldn't have been there at all. That's what I would like to say with you clearly.
Next question comes from the line of [ Vivek Joshi ] with BP Capital.
Yes. Congratulations, you have continuous efforts to take the wells [indiscernible]. I just wanted to understand, you mentioned that the rate for the entire B-80 gas has been changed from 22% to 12% growth?
Yes, that's the rate. We see what happens it is going with [indiscernible] the Western India market rates for LNG imports. LNG is getting around $11 to $12, we are not able to get more than that. So that's the reason that the prices are fixed to the Brent price. And then this ongoing [indiscernible] for the entire last year for B-80, is it correct? It's about 23, 24 was the price per average, price was about $16, [ 15.8% ]. That will stand reduced to now $10 to $11.
[indiscernible] state revenue which we [indiscernible]?
That's right. That will be impacting us. But at the same time, it is having a revenue share will come down to some extent. So overall, you are right, it will impact us.
Next question comes from the line of Nigel, an individual investor.
Okay. I just had one question about Dirok. Once the connection to the Northeast gas grid happens and then the production scales up to, let's say, 60 million to 70 million standard cubic feet per day, what will be the economics for them? Like how much will the revenue share for the royalty for the government be operating expenses and the margins?
This is an old production sharing contract because the government share will go around maybe 20% to 30%. But that will lead our top line and as well as the bottom line will increase in proportion to our current volume. So the current volume may say [ 20 million ] of [ visible ] growth on an average. If it goes to 60 it will [indiscernible] that.
All right. And also by when can we expect this connection to the Northeastern gas grid to happen and see the production ramp up as well?
It's handled by the respective government companies. So we are not way to it. But when we talk to them, we expect that should get fully commissioned by [ 2026 ].
Next question comes from the line of Mohammed Patel with Care Portfolio Managers Private Limited.
Now most wells are operational B-80. So will we be funding the CapEx from internal approvals?
We plan for it no borrowings anymore. We will be -- all capital expenditures through internal accruals. You could have seen we have about 300-plus operating cash flow. That will be pumped into the [ -- for ] capital investment.
And what is the shutdown duration for B-80 from which base and which data should we can help? There [indiscernible] confusion.
So there is a [indiscernible] shutdown and such, we have looked at -- the operational uptime was about 88% last year. And this year, we will be further improving on it. But the production-related shutdown, we expect maybe about whatever the line crushing it takes. It may be 2 days or may go to 5, 6 days. We will let you know once the job is completed.
I was asking more from a Q1 perspective. So we are doing this steam thing in the well, right? So how much shutdown duration will be for that?
It's a job now. The equipment and everything is functional. It is a matter of base. It's over a couple of days. If some equipment is not functional, it will take more time. So predicting the time it's all you can say less than about 7 days. 7 day... Okay.
If you can just tell us the revenue from Dirok [indiscernible] full year FY '24 versus FY '23?
We [ won ] for this item, actually, that Dirok, it was -- the revenue -- net revenue is about INR 250 crores, that reduced to INR 161 crores. And then what else you wanted to know? There are other [indiscernible], we have very minimal contribution. It is not much. So we are ramping up production by building the new wells.
And the B-80, when you look at the whole thing, I said it is about INR 175 crores in the last year, that has gone up to INR 259 crores, INR 260 crores [ EBITDA ] in the current year. And [indiscernible] is a very negligible [indiscernible]. It's about overall contribution system approach.
Okay. I have one last question, if I can. Yes. So we have results of [ 40 ] [indiscernible] as of FY '23. So what will be the estimated life of these reserves in a number of years?
Normally results and refer replacement ratio, we would like to have -- that's where we were drilling the well, and we wanted to test in the sand, which has not been tested to increase the reserve base, which will be in a manner that when we monetize, we will be still having the results and resources left in the company in a manner over a long period. So we are expecting this deal and the potential and are looking at the minimum period of at least 15 to 20 years comparable [ days ].
Next question comes from the line of Rikesh Parikh with Absolute Advisors.
I want to understand, have we [ mean ] finalized the rig for the processing?
So we have not signed the rig to say, that's a fact. But we are waiting for some expert appraisal on it. Our people have given us 3 drilling locations. [indiscernible] team has done a detailed work on it. That has been reviewed by [ Clara ]. She is also an expert in the base in reserve.
And both the things are doing the same thing, but still to be abundantly cautious, the status, a lot that has happened in the block in the past. We don't want to repeat it. To be abundantly cautious, we are getting the firm engaged to review the whole thing again. Once the review is completed, and then we will start finalizing the rig.
So when can we expect the [indiscernible] [ latest ] start as [indiscernible] fourth quarter?
I think drilling, we are planning for [ June 8 ] next financial.
Next question comes from the line of [ Uday Warner], an individual investor.
Yes. So we have an operating stake in PY-3. So I believe it will be going online this year as they have already been Russian contract [ revision ]. So are we going to hold that stake? Or are we going to exit that stake in that and what are the plans?
In our mind, we still hold, and we believe we are holding to build personal [indiscernible] the participating interest in the block. As at the moment, there is no progress to us and if they come out with the details of what are being done, so we will decide whether to able to get back into that [indiscernible]. If it is economical [ growth ], we'll certainly get back to our rights.
Next question comes from the line of Manan Patel, an individual investor.
Congratulations for getting both wells activated. Hopefully, the journey from here on will be smoother. Sir, my question is on PY-1. So you have mentioned that PAC has been extended in 2030, but from the time lines that you gave, most likely the production might start only in '27 or '28. So how do we see in terms of the -- is there a risk of not PAC not being extended further? And also if you can throw some light on the pricing of the gas from the same?
Actually, you are right. So '25, '26 [indiscernible] takes about 18 months, we'll be able to get back on '26, '27. You are right that in processing PAC, we believe that we'll get extended by additional 10 more years. Phenomenally, any producing field that they don't shut down, they will give extension. That's what we believe in it.
I think [indiscernible] will also do the same thing. So there should not be any issue of continuing the production from PY-1. And your next question is about the price. Now when the volume is too small, we are not able to get a better price. Now this will go up, and we will be auctioning the gas to the good volumes, we will get a price at least not less in the PPAC.
Understood. And sir, the next question is on the results that you mentioned that below the ground HOEC has done extremely well. So can you throw some light on what kind of growth have we seen in the resources during the year? And what can happen in the next 2, 3 years?
Yes. So [indiscernible] -- as we are speaking that the [ DCS ] is reviewing the potential in Dirok. So we are expecting increase in the [indiscernible] Dirok field. Then already BC has given the [ 390 ] so you should see number of the B-80, we believe that we will be able to reach in the [ 350 ] number move to [ 390 ]. And we will be doing an own exploration well in Kharsang.
That would be for the lower region and [indiscernible] formation. In the [ turnover ] to be successful, substantial additional volume with the [indiscernible] custom block. Then we are drilling an exploration well in block 19 that is having a southern pricing [indiscernible] and the chance of us [indiscernible] amount of [ 5 ], and that would be creating at least substantial half of the Dirok in our opinion because with all the projections and the result prospective resources, and it will be get converted into reserves only are pertaining the wells.
And we are planning for 2 more wells in [ Asjol ] and 2 more wells in [indiscernible] that will also increase our reserve base. And in addition, PY-1, there are [ Mr. Christian], in his experience in the basement. And he is finding a difference between the gas water contact in the North and South. Once the gas water contact is higher and the other one is in the lower. If you take the higher gas water contract, this block could grow [ a surprise ]. The substantial volume and recovery is still there in PY-1.
These are our projections for the increase in the reserve base of the company. As and when the activities are taken, then we will be going to a third party to review not only our [indiscernible] and the external third party will review and the results will get upgraded. And in a manner that we are comfortable, our reserve replacement ratio would be much, much better than many other companies.
That's very helpful. Just a suggestion, it would be great instead of publishing resources only in the annual report. It would be great if you could add that to your presentation. That would be very helpful.
What is happening is the production data are different because it is not all the peak that come at the same time, right? Some deals are getting reviewed and some things getting in between. So it will create some sort of -- we don't want to create a sensation into us because these are upgraded. We wanted to make it as an annual -- it's a race, and we will give it [indiscernible] [ EBITDA ] balance sheet assets, which we are normally doing on it.
And if we find any [ stock ] prices which is either way, it may be an impairment or it may be substantial increase in the potential, we will certainly inform to you.
Next question comes from the line of [ Neha Kumari Surana ], an individual investor.
So my question is, in the statement provided to the [indiscernible] outcome of your board meeting, the point number cost mentioned that there has been some amendments to the company's policy regarding the policies of announcement and other things. So what is the commitment that has been on? Is it like you guys start coming back to the [ B-80 ] and the normal investors regularly with the update on, if any [indiscernible] or any of the wells or get the broad [indiscernible]?
And my second question is, if I understand, right after the [ cyclone ] during June 2023, there was some kind of repair and maintenance that was being done, which was nothing but you were trying to remove the blockage, which was like [indiscernible] deposited. So at this point of time, this clearing of exporting has already been done. And only after that, when we could not clear it out, we told that and we went back 2 vehicles and we appointed them.
So now why you think we are doing the same excess? And why was this exercise than it was already done, why did we clear the rig depository at this point of time because it is like -- sometimes we feel like as an investor, we are not being given the...
[ Neha ], what's the question in the right perspective? Because it's too long, I'm getting ready to understand and answer to you first. First, if I understand your question, the battery is not -- why you're not clean the export lane. The backup job was related to the [indiscernible].
No, not because -- even before those vehicles were appointed, we did not clear some export lines at this point of time, shaping that there are some kind of lag deposit rates that is there. And if I'm not on some kind of statements were given that we are clearing it, even before the big well [indiscernible] to your question.
See you wanted to engage in a conversation, are you putting a question, I can answer to this, right? The point here is the land pricing is a continuous process. We have pledged the line at that time with the limited facilities there in. It went up to 162 barrels per hour. When we open the wells, we start the flowing, it started coming down. The chemical injection is not helping much.
The line is in the 162 barrels started coming down to 160, 90, 92 and comes down to 60 barrels. So every time when you put a chemical, that goes up to 90 barrels. Then again, within a few days, it comes from [ 40 ] barrels. Again, we are putting chemicals, it's growing. So it is not a facility available. We are not a bigger company to have the facilities in house. We have to mobilize the boiler and other equipment record to flex the line.
We are -- then now the line has come down to less than 40 barrels, we have mobilized mobilize the company -- so the equipment company from -- they mobilize [indiscernible] equipment have more places with a high pressure response. That is on the field. So if we again cleaned up after payments is that again gets largely have to go on, clean up again. Now what happened as a routine, we will be clean at [indiscernible] 3 months.
Okay. Okay. Sir, second question is the update that you have provided in the outcome of Board meeting document, right? You told that there is some kind of amendment that is being done in the company's policies regarding the announcements and other things. So can you please throw more light on this?
This is based on the [ PP ] regulation, [ LODR ] regulations, we wanted to comply with in full. So accordingly, we amended a well, disclose requirements as a part of our corporate government.
Next question comes from the line of [indiscernible], an individual investor.
Yes. Okay. Remember there were some pressure issues initially will go to do function. And for that, we are supposed to come to manage the pressure of the wells. But I guess now that the gas is only not coming through much out of the well, is the pressure issue still there? Second thing, after fixing whatever we are fixing at B-80. And if gas comes more and the oil comes more, so then again, do we have to manage the pressure because of which the well will -- I mean, if you cannot manage the flow because you cannot manage the pressure or that you have to buy a compressor. So have you -- I mean, can you just put some light on that? That is by far [indiscernible].
Second thing is, last time on the con call, it was mentioned whatever the outcome may be after the maker guys have booked, you will come to the investor community or the shareholders, who are the core partners of the company and inform us that it is done. And [indiscernible] is the result. Whatever the result may be, positive or negative. So I'm assuming last time you suggested we were going to come in February.
And if we have come in February, it's been like 4 months, February, March, April and May, we are almost in June now. So you're getting an update in June. I don't know when they have come. But in the con call, it was suggested last week of February. So what really happened that you will still fail to inform the investor community or your core partners or the coinvestors of the company? And you are informing us in this con call right now. So this is 2 of it.
The last thing is very small that I wanted to ask is the penalty on the gas that we had done with the [ GSPC ] last year, which we seem to give them the amount of gas they are asked for. So how did we compensate or what really happened thereafter? So can you please go ahead and inform?
Okay. compresses, we will decide once we know the floor rates. So what is happening is getting as well activated and getting the well continuous production to more capacity. The moment I inform [indiscernible] the release get activated, the next question comes to me as [indiscernible] data. I wouldn't be in a position to tell on that. That's the reason. It has not been informed to the [indiscernible].
In terms of LODR regulation assets, it is affecting how much it comes -- I have to give you a materiality of it, right? So simply saying that it is open, it doesn't have much purpose. That's the reason it has not been informed, no intention to hold an information to anyone. That's the fact.
Second thing, the compression, which is suggested, we will be known only after flowing the well for summer period. At this stage, I can't say anything on it, whether it is really needed or not needed. So these are the fundamental problems we are addressing, number one. Now the third one is about your analogy, right? In all of our gas sale contracts, there is a [ 4 ] major class. The fourth major class very right. We start about [indiscernible] pipeline and any disruption to our top site facilities and our reservoir issues would be construed and termed as a post major.
We have consent -- we have given a consent to notice to the GSPC. It is within that knowledge. So however, they've raised a demand for the shortfall of the quantity, we have given a reply to them. And that's backed up the matter at the moment.
Would there be a penalty?
There is any penalty comes when we are not able to perform when everything gets being normal. If there is any situation beyond our control comes into play, the fourth [indiscernible] kicks in. So we are not obligated to supply that quantity. That is the terms of the contracts.
As on [indiscernible], can I assume that it is already solved and there will be no penalty for this current -- I mean the last financial year that it will not...
[indiscernible] has been called the somebody raise [indiscernible] [ dispute ] you have to go through the more of resolving the dispute, right?
Okay. Okay. And sir, is there any minimum support price for this contract that we have renewed this time with 12% crude rent?
So there is a [ charge ]. So we have gone for a minimum quantity, and then we are asking them as and when we are able to produce more, then we talk to them in advance and increasing it.
Sir, I'm talking about the minimum support price like more of the crude crush?
It's a planted one. There is no -- there is -- we put them actually, the price should not go below the [indiscernible] price.
Okay. And that is what right now currently?
8.9% or something.
Our next question comes from the line of [indiscernible], and industrial investor.
[indiscernible] Dirok, sir, which idea they use of sale? Or [indiscernible] states may a monsoon in the offtake where we see both come out? Because of all the maintenance and all [indiscernible] for North, for East, West states? So the next quarter, we don't expect current [ offtake], [indiscernible] because of all this maintenance last part [indiscernible]?
I said, actually, normally if it is [indiscernible] are substantial demand goes there. These are a bundle were to come over. Otherwise, [indiscernible] the standard in [indiscernible] and all the refineries and whatever the power plants, if all of them are functional, then there should not be a drop in the demand.
But what is happening is [indiscernible] freight [ sir ]. I'm [indiscernible] the other and nominated [indiscernible]. So last part after result presentation for [indiscernible] a monsoon quarter to [indiscernible] ahead offtake. Last part, [indiscernible] recorded [indiscernible]. So [indiscernible] record maintain [indiscernible]?
[indiscernible] been recorded. [indiscernible].
[indiscernible] my mistake, sir. Eastern Region can record who supplies as a standard, I think?
The CSO gas play on a [indiscernible]. It was active, you want to get a problem on the [indiscernible]
[indiscernible], right?
No, no, no. [indiscernible] to Board, they were trying to get it connected.
[Foreign Language]
Yes. [indiscernible] as the company told who also getting connected now. [indiscernible] it will get solved.
[Foreign Language] November, [indiscernible]
[Foreign Language]
[Foreign Language]
[Foreign Language]
Next question comes from the line of [indiscernible], an individual investor.
So I just wanted to discuss one thing. So this is something which I've been taking a wrong way, but please adjust in the right way. My question is like, as someone else also mentioned within the call that why the details of the blockage or reopening all those things are not provided in time to the -- in the public investors. So now what is happening is I can see that even before the -- like say, for example, in the June month, if I'm not wrong when this happened, this particular what you say and [indiscernible].
So when the results are announced, the results had [ tactically ] fell down. And once it fell down, another 2 days, even before the information was out through the conference call that the B-80 one is on like a hold and it is not working anymore, there was reduced -- the share price reduced to almost 45%, 50% within the 2 days matter.
So this kind of [indiscernible] trading is being done by some of the other -- we are not sure what is exactly happening around. And this is because the details are not out in time. Can we do something for the public investors so that the retailers are not stuck in this thought, just because something else has been done by a few other people. Can we do something on this?
We are doing all compliances in terms of the [ B-80 ] LODR. That's what I can say you, I do not know why the share price comes up and goes down. This is not in my control. Whatever the informations are reported to be communicated to the exchange, we are doing it. And wherever the material information are to be given to resin, we are giving it either negative or positive. This is what we have been doing. We'll continue to do that in future also.
When we -- in this way, as [indiscernible], can we keep the conference call like on the same day than the -- nor when the results are announced, like so many other countries -- companies who are doing this. So what happens is the people who are doing this [indiscernible] ,they get 2 days accretive of time to do all this [indiscernible]. If the conference call is set on the same day of the results when they are announced, the time line will be reduced. And obviously, the retailers will be saved out of this. So why can't we do that? Is it possible?
I can't answer to your perceptions because the capital about the wording which are using [indiscernible] and other things, which I don't attribute to any of those things, right? And second thing is, this is a smaller company. We have a Board meeting held outside Chennai then we have to travel back to Chennai to keep ourselves prepared. Till the Board results are declared out, we will not be putting into any write-offs on our investor presentation, which can be prepared and get uploaded on the very next day.
But to the best of our ability with meetings that are held in Chennai, the very next day, we used to have the meeting. Now in this case, 1 day delay, he had the meeting 1 day for yesterday and only 1 day we took because we reached on the early -- earlier about 2:00 and 2:30 in the morning, we prepared everything yesterday and today, we upload. Under the meetings are held in Chennai, so we can work late and go to the next day itself.
Okay. This is what's the answer I can give back to you.
Next question comes from the line of [indiscernible] with Care Portfolio Manager Private Limited.
So what is the reserves number [indiscernible] of FY '24? Is that right? FY '24? As of FY '24.
No, I think it's so much to predict at this stage. So we'll only get this number in the annual report. The reserve number which was partly -- we have declared the results, right? The reserves number which was [ partly ] in FY '23. The results number was [ partly ] FY '23. So it will be given -- I mean, I'm not able to hear your questions clearly. Can you just tell me what is the question, Mr. [indiscernible]?
The results number in FY '23 was [ 40 ]. So what is that number in FY '24?
So we will give that number in the annual report because the amount which we are having is different, but that we will be announcing to everyone there into the time of sales.
Okay. What is the duration of the new price contract of B-80 where prices are now 12% of [ Brent ]?
It's about 1 year.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Thank you. We continue to focus on achieving the optimum production from both the well D1 and D2 or B-80 and to increase OpEx from Dirok. We will also import on drilling development both in [indiscernible], region, PY-1 to enhance the production from the discovered results as well as resources.
In addition, we plan to test our [ adjusted ] plans in [ Dirok ] during the ongoing workover and an exploratory [indiscernible] well in block 19 and also [indiscernible].
Thank you. On behalf of [indiscernible] Advisors, that concludes this conference. Thank you for joining us. You may now disconnect your lines.