Hindustan Oil Exploration Company Limited (NSE: HINDOILEXP) Q1 2026 Earnings Call dated Aug. 18, 2025
Corporate Participants:
Unidentified Speaker
Nachiket Kare
Jeevanandam
Senthilnathan
Krishnan Raghavan
Analysts:
Unidentified Participant
Dhruv Ravani — Analyst
Andre Prushardam — Analyst
Rithesh gandhi — Analyst
Tejas Shah — Analyst
Amit Mehendale — Analyst
Vaibhav — Analyst
mehul Panjwani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Hindustan Oil Exploration Co. Ltd. Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nachiket Kare from Ernst and Young Investor Relations. Thank you. And over to you sir.
Nachiket Kare
Thanks Nadine. Good morning everyone and a very warm welcome to all of you. I’m Najkit Kale from uiir. On behalf of the company and the management, I would like to thank you all for participating in the company’s earnings conference call for Q1FY26. The company has published its result and uploaded the investor presentation on the exchanges. I hope everyone had a chance to go through the same. Before we start, a disclaimer. Some of the statements made in today’s earnings phone call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated.
Such statements are based on management’s beliefs as well as assumptions made by information currently available to the management. Audiences are cautioned not to place undue reliance on these forward looking statements in making any investment decisions. The purpose of today’s earnings phone call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Let me introduce you to the management representatives on the call. We have with us Mr. R. Jeevanandam, Managing Director, Mr. N.S. senthil Nathan, Chief Financial Officer Mr. Krishnan Raghavan, Chief Technical Officer, ENP. Without further ado, I would now like to hand over to Mr.
Jeevanandam. Thanks. And over to you.
Jeevanandam
Thanks colleague. Good morning everyone and welcome to the quarter one financial year 26 earnings call. From our team I have Krishna Raghavan, our Chief Technical Officer, Sendhil Nathan, our Chief Financial Officer and Daisy, our company Secretary. Joining me on this call, I’ll start with updates on the northeastern region. Let me begin with an update on the Khasan block. As you may recall we have secured environmental clearance for drilling 40 development wells and three exploration wells in this block. The drilling will be executed in a phased manner. In the first phase we plan to drill nine development wells of which four wells have been drilled to date and drilling up the fifth well is currently underway.
Out of the four completed wells, three have already been cooked up and we have commenced production contributing an additional 350 barrels of oil per day which is equivalent to the production of the existing 28 wells. The fourth well is under testing and has tested a zone with the good rates of gas which is which validates the GCA report of considerable gas volume in the upper Gurujan sands. We will complete this program of nine wells before December 2025 which we expect should add about 1,000 barrels of production per day by the end of this year. For the drilling of nine more wells and the deeper wells targeting up to the barrel formation, about 4,000 meters will be carried out subject to partners approval.
An expression of interest has been issued for a 2000 hours per ric as well as for thousand hours per rig and technical evaluation is in Progress. During the quarter one, the Carson Block recorded an average production of 450 barrels per day, up from 351 barrels per day in quarter four financial year 2025 move on to the Dirac field the revised field development plan for the Dirac block has been submitted to the DG edge enabling the extension of the block. We plan to drill a well in North Dirac up to the barrel formation and an expression of interest has been published for a 2000 RSP rig which.
Is currently under evaluation. A suitable rig will be finalized and civil work will commence at the earliest. Gas sales for the current quarter is about 20 million standard cubic feet per day, while the uptake in the previous quarter was 15 million standard cubic feet per day. Accordingly, the sales volume for the Current quarter is 0.41 BCF compared to 0.37 BCF in the previous quarter. For our share conducted production is 8,893 barrels compared to 6,603 barrels in the previous quarter. Price realized in the current quarter is 7.54 per mm BTU compared to 8.45 in the previous quarter. While the field has the capacity to produce up to 50 million standard cubic feet per day, production has been constrained due to limited demand.
We are closely tracking the developments related to the northeastern gas grid which will connect Dirac to the national gas grid. Some issues regarding the common carrier and the augmentation of the DNPL line have made progress and an increase in demand from NRL would boost the regional demand. Irrespective of the grid connectivity, local demand is expected to increase. We hope that the increase in uptake will commence in the third quarter of this financial year and is likely to occur before the end of the fourth quarter of the current financial year on 31 March 2026. Once the common carrier framework is adopted and connectivity is established, we expect demand constraints to ease.
Although the timeline remains uncertain, we anticipate the grid to be operational within financial year 26. We will augment our capacity by drilling in North Dirok and and by drilling three more development wells in the rock. This will enable us to increase the sales volume and meet the rising demand by connecting the Northeast gas grid to the National Gas grid block AAONHP 2017. Oblique 19, which referred to as A block 19, is an area adjacent to the Dirac, known as a Greater Dirac and is analogous to the Dirac structure. We have received environmental clearance and are expecting the extension of the block for one more year to start the committed work program.
We have submitted the extension of the bank guarantee to the Government of India. We will start our drilling preparedness for the first well once we receive the extension. Regarding the Umatara block, we have 10% participating interest where IOCL is the operator holding 90%. The necessary environmental clearance have been obtained. IOCL has started drilling the first well. We believe this drilling campaign will give us some momentum to continue drilling in all our blocks in the northeastern region. Our capital outlay for the northeastern region for the next two financial years continue to be reached 250crores and we endeavored to complete our drilling in the Northeast within two years.
Moving to our Campe blocks, we have received environmental clearance to drill two wells each in North Balol and as Joel we have completed the workover operations of the NP1 well in North Balol and we have also begun drilling first development well in North Balol after the 17 year characters. This will be followed by drilling the second well. Following the drilling of the North Ballol wells, we plan to drill two wells in Asjol. We are also expecting the final clearance of the ring fence TSE along with the extension of the Polish block. This would add reasonable value to the Gambia blocks.
Overall, the Wilson Can Bay production remains the same. I shall talk about the offshore blocks in Cauvery and Mumbai High. Coming to the Mumbai offshore blocks, we signed the revenue sharing contract for block B15 in April 2025. You may recall that this is a discovered small field with an area of about 332.4 square kilometers which we successfully bid for financial year 2025. After collecting the existing 3D and 2D data from DG Edge, our GNG team started working on the development plan for this block focusing on two existing discoveries with upside potential for exploration. Considering the water depth of about 40 meters, we are discussing a cost effective development plan to unlock the value in the block.
In block VIP we hold 100% participating interest production in the current quarter is 48,406 barrels of oil and 0.37 BC above gas compared to 60,000 barrel of oil and 0.4 BC above gas in the previous quarter. During this quarter the average gas price realized is 11.4 per MMBtu compared to 12.09 in the previous quarter. We have about 410,000 barrel of oil in stock and we are in the process of disposing of the oil by auction through M junction. Production was disrupted in mid June 2025 due to monsoon fury and we demoed the FSO from the SBM for safety consuming the oil in the vessel.
We removed the vessel in August 2025 and commenced production. Considering the initial production from the D1 well and the reduced production due to mechanical and wax issues, we are planning to complete workover of this well as well as soon the current monsoon is over. At the moment both D1 and D2 wells are flowing. We are making every effort to avoid disruptions during the monsoon and acknowledge our inability to ensure continued production during the adverse weather in June and July. With the lessons learned from each monsoon we will continue to improve to minimize the shutdowns as much as possible.
We are in the discussion to finalize the drilling contractor and the subsea contractor who supplied the tree for running tools, risers and eye box to commence a workover. We are also evaluating the minimum facility platform for drilling three new wells to maximize the value from the block. Regarding the Cauvery offshore block, you may recall that in the picture in the PY3 offshore field we engaged Petrovietnam, a state owned oil and gas company in Vietnam with experience of producing oil and gas from the basement akin to the complex geology of BY one for a comprehensive review of the block.
We have received a report on the block’s prospectivity which indicates upside potential. Accordingly, Petro Vietnam has proposed drilling two infill wells which are development and on appraisal well through the existing platform and on exploration well outside the platform. We have sought expression of interest from various drilling and expect to finalize the drilling rig and source long lead items to commence drilling in the last quarter of this financial year. This will bring new hope to the field and the successful drilling and completion of the wells. They can be hooked up for production Immediately all facilities for processing and transporting gas are in place even at the PPAC price.
With the estimated volumes for each well, the project is economically viable since the capital infusion is marginalized. Coming to the quarterly results, our EBITDA for the current quarter is 35 crores in the consol accounts compared to 39 crores in the previous quarter. Excluding the adjustment for the acquisition of 40% participating interest in DIT, we remain committed to drilling a total of 18 shallow wells and three deep wells in Karsang, four wells in Durag, two wells in Greater Turok and two wells each in North Balor and as jolly in our onshore assets. To make our offshore fields reach their potential, we plan to drill 10 offshore wells, three wells in PY1, three wells in BAT and four in four wells in B15.
This program will commence with the workover of BAT in November 2025 and drilling in PY1 in the last quarter of 2025 and 26 and will continue until completion except during the monsoon period. On both the east and west coast. With internal accrual, we raised a debt capital of rupees 250 crores to meet the above capital expenditure. This long term loan will be used exclusively for our capital expenditure. We believe in our assets which will not let us down even in the worst price scenario. Now I’ll hand over to Sandhill, our CFO to take through the financial results in detail.
Senthilnathan
Thanks, Mr. Jeeva. Good morning. All standalone revenue for this quarter is rupees 83.48 crores compared to rupees 83.37 crores in the previous quarter. And by including the year end adjustment of rupees 46.98 crores increase on account of assignment of 40% PI of VAT and rupees 12.25 crores towards Kashang. Adjustment makes a total of rupees 142.61 crores in the previous quarter. VIT revenue for the current quarter is rupees 38.58 crores for gas sales compared to rupees 44.15 crores in the previous quarter. Oil and stock is adjusted in the opening operating cost. Current quarter revenue decrease in VAT is mainly due to lower production of gas which is 492mmHCF in this quarter compared to 439mmSEF in the previous quarter.
In the case of Dirac, revenue for the current quarter is Rupees 36.97 crores compared to Rupees 31.47 crores in the previous quarter. During this quarter, 490 mms scf of gas was sold compared to 373 mm scf of gas sold in the previous quarter. Similarly, 8893 barrel of oil was sold in this quarter compared to 6603 barrel of oil sold in the previous quarter. In standalone accounts, the field operating expenses for this quarter is Rupees 55.8 crores compared to Rupees 62.59 crores. Statutory levies are Rupees 12.13 crores for the current quarter compared to Rupees 13.5 crores in the previous quarter.
Cost including depreciation, depletion and amortization, finance and others is rupees 13.57 crores for this quarter compared to rupees 16.07 crores in the previous quarter. Stock adjustment for this quarter is Rupees 15.22 crores credit compared to Rupees 23.77 crores credit in the previous quarter without considering the year end adjustment of change in PI and the rate revision. Similarly, total cost in the current quarter is Rupees 66.28 crores compared to Rupees 48.01 crores in the previous quarter. Standalone EBITDA for the current quarter is Rupees 27.24 crores compared to Rupees 24.38 crores in the previous quarter. However, with the year end adjustment, the previous quarter was rupees 148.32 crores.
Profit after tax for the quarter is rupees 48.21 crores compared to rupees 130 crores in the previous quarter. With year end adjustment in consolidated accounts, the revenue from operations for this quarter is rupees 85.5 crores compared to Rs. 85.54 crores in the previous quarter. After adjusting the impact of revenue on assignment of VA of DAT and day rate revision, total expenses in the consolidated accounts for the current quarter is Rupees 69.29 crores compared to Rupees 64.9 crores in the previous quarter. The decrease in cost is mainly due to stock movement in consolidated accounts. EBITDA for this quarter is Rupees 35.02 crores compared to Rupees 38.74 crores in the previous quarter.
Excluding adjustment on rate revision of facilities and accounting of 40% participating interest with this adjustment, the previous quarter number is rupees 61.85 crores now 100% of VAT is owned by HOEC facility revenue and cost is eliminated in the consolidated account. For the current consolidated profit after tax for the current quarter is rupees 43.87 crores against rupees 51.16 crores in the previous quarter including the year end adjustments, India Ratings has reaffirmed the rating in day and revised the outlook from stable to positive for rupees 50 crores bank loan. With the current position, current cash position and continued production and with the borrowings for capital expenditure as required, we will meet all our obligations.
Thanks and back to Mr. Jeeva.
Jeevanandam
Thanks. We can now open the forum for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Dhruv Ravani from Sriji Finserve llp. Please go ahead.
Dhruv Ravani
Hello sir. Am I audible?
Jeevanandam
Yeah, yeah,
Dhruv Ravani
yeah. So you know, since we are holding a share, you know, in the Kathiranga field, the 350 number that you give for the barrels of the. That is our share. It is the total production from the field.
Jeevanandam
The total production from the field.
Dhruv Ravani
So our share would be around 25%. So that is how we have to consider it. Would it be Right.
Jeevanandam
Our share including subsidiary is 35%.
Dhruv Ravani
Okay. Wells that we have been drilled in the Katharine or all have been producing. All have been producing. It is. There is no dry holes at all.
Dhruv Ravani
Okay. And you know, on the bat front, you know this new well that you plan to drill, will it happen this year along with the work over well or you know, it would be a separate assignment altogether. So I think we are looking at. The possibility of doing the workover first. After that we are looking for a rig, installing a minimum facility platform and. Then drill the well. If you are able to secure it in this center, this quote, this, this coming monsoon, we’ll be able to do it. Otherwise we have to defer it for the next mantra.
Dhruv Ravani
Okay. And what would be the costing for drilling that new well
Jeevanandam
Excluding the platform? It is being a platform well we. Expect should be in the Arab about $10 million.
Dhruv Ravani
Okay. And the each Kassaranga well, what would be the tentative cost?
Jeevanandam
Each is about $2 million.
Dhruv Ravani
Okay, thank you. Thank you. That’s all.
Jeevanandam
Thanks.
operator
Thank you. The next question is from the line of Andre Prushardam from Colgitto Advisors. Please go ahead.
Andre Prushardam
Yeah, I had two questions. My first question relates to your latest estimate as to when will the Northeast pipeline you think we set up and from what period onwards can we start taking commercial advantage of it? That was my first question.
Jeevanandam
See, I think at the outset you should know this is not in our control. We are not the one.
Andre Prushardam
Yeah, it’s.
Jeevanandam
We expect that’s on the third quarter it should be completed. By all probability, end of the fourth quarter it should be fully commissioned. That’s what we believe in. And accordingly we are ramping up our drilling also.
Andre Prushardam
And what is this assumption based on in terms of your understanding? Is there something more concrete you can share in terms of the things leading up to this deadline?
Jeevanandam
What is happening is because we are on the field itself when we are seeing the lines are getting connected, some of the smaller issues like common carrier and some discussions are happening on it, and it is the best interest of all the parties in the region. They’re expecting the line should get connected at the earliest. So that’s what I would be believing it. They should get functional by end of this year. They all need.
Andre Prushardam
Okay. My second question was that in the last call you had said that you had some unsold inventory of several hundred thousand barrels. What is the status on that now? Have you been able to sell off this inventory or is there an addition to this unsold? And could you just give us some kind of path in terms of what is the strategy and thinking on this?
Jeevanandam
So we are holding around 410,000 barrel of inventory at the moment and which we have already. This has to be through an auction process to be on a transparent basis. We have appointed M Junction to carry out the auction and the technical evaluations have been completed and so on. So after that we will be. We will be asking them to bid a price for it. Once the price bid is accepted, then it will take about 10, 15 days to them to take the uptake. That’s what we plan. It’s already in the process now. So when is the option like to begin from, from what period should I count those 10 or 15 days before. End of this month.
Andre Prushardam
So you’re talking about in a month, this inventory before the end of this. Month, before 31st August, I understand. So roughly in a month’s time or let’s say a month and a half, you expect this inventory to get liquidated?
Jeevanandam
Yeah, that’s right.
Andre Prushardam
And what, what would be the revenue range expectation? I mean I know you cannot fix the price but let’s say the price is between X to Y between. What kind of revenue range are you likely to get out of this?
Jeevanandam
You can multiply with the 410000 barrel with the price which you would like to consider. That should be the value.
Andre Prushardam
Yeah. So what is the range of the price that I should take?
Jeevanandam
You take the current price or whatever it is. It should be about some 25, 26 million dollars. We should be crossing more than 220 crores value. That’s what we believe.
Andre Prushardam
Okay, thank you. Thank you very much.
Jeevanandam
Thank you.
operator
Thank you. Before we take the next question, I would like to remind the participants. Anyone who wishes to ask a question may press. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. The next question is from the line of Ritesh Gandhi from Discover Capital. Please go ahead.
Rithesh gandhi
Hi sir. You had indicated earlier that you were going to start exploration in Assam only after the grid was connected. And now you’re sort of looking at expansion even now. Is there any incremental visibility because the pipeline we should be able to actually even just see how the progress is going. Right? So is there anything which is giving us increment of actually the comfort around this?
Jeevanandam
Yes, see by all means it is. It is sure that the northeastern gas grid will connect it to the national gas grid. We are getting closer to it and at the same time we have to augment our ability to meet the demand. So that is the reason we are start. We are planning for drilling the North Dirac well first and the three development. Wells in a manner that we don’t. Waste time on it when the market is ready. We are not ready for that. So that’s why our drilling campaign will continue.
Rithesh gandhi
So the other question was with regards to that increment. Actually, actually well that we’re looking to do in the bat. How long is it that expected to take?
Jeevanandam
See that the workover should not be. Taken more than 20 to 30 days. And then we install the platform and. Other thing that will take about a year.
Rithesh gandhi
Take about how long a year
Jeevanandam
here actually. Because what is happening is we have to install waiting for a monsoon and then the three wells will have to be drilled and then it has to be get connected.
Rithesh gandhi
Got it. So for the right now, for, for, for let’s say FY26 or at least for the next, let’s say the 12 to 15 months, we expect production at B80 to be as per how is big pain over the last few months barring the sort of anomaly of the rain and then we’d expect expansion to happen. Only after that is it and that’s.
Jeevanandam
Workover may give some good positive results then this volume will increase.
Rithesh gandhi
Got it. And we expect to start that in how long and after the range? Immediately.
Jeevanandam
Yeah as soon as the monsoon is over we’ll start doing that. We are trying to finalize a drilling. Conductor as well as the the contractor. Who supplied the tree for planning tools and others. So which is people are actually working on it.
Rithesh gandhi
Got it. And given all of the of the assets we own and is there an overall expectation on the amount of you know capex we’re expect to do over the next two years.
Jeevanandam
So we said it was about thousand. Crores that may increase by another 250 crores. Thousand two hundred fifty crores is our targeted expenditure.
Rithesh gandhi
God sir. And at the end of all of this Capex would would be over how.
Jeevanandam
Long it’s a total period of we are expecting the northeast and offshore put together is about two year program now. Which may slip about six months maximum two and a half years.
Rithesh gandhi
Got it.
Jeevanandam
And and we will be monetizing all that. Yeah.
Rithesh gandhi
So and at the end of all of. The end of all of this Capex. What sort of a production would we be expecting in terms of oil and gas?
Jeevanandam
So P90 itself we are expecting at least 10,000 barrels.
Rithesh gandhi
Oh okay.
Jeevanandam
For our share.
Rithesh gandhi
For our share. Got it. Okay okay. All right. So thank you and all with the best. Thank you so much.
operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star and one on their Touchstone telephone. The next question is from the line of Tejas Shah from Laser security. Please go ahead.
Tejas Shah
Hi sir on the bat friend. Why are we deviating from that range of selling oil below 75? I think our range target was 75 and we said we will stick because we’ve got a lot of storage capacity available. So why a sudden change in thought process?
Jeevanandam
We have to. We are looking at the price and looking at the market there on so there are different advices are coming. If there is a price movement which is favorable then we will wait actually but they are indicating that oil price should be in the range of 65 to $70. Then we thought it is prudent to. Liquidate. And in the long term what are we looking at the price? I don’t know if you’re asking short term loan because let’s say 4 lakh barrels what we have we can easily stay with the current production what we have for another year also. But I think in between the prices will go up unless and we have a liquidity problem because what happens bat or production is growing as a stock and there is liquidity issue. You have to look at two other objects also when oil price is going down, your drilling cost and other the input cost of the development, drilling and other things will also go down because. We are embarking on a capital program. So the prices of all service and. Other things will come down and that is the time right time to us to go and complete our drilling program. For that we need this money as such so we are going out and getting it done.
Tejas Shah
Okay, fine. In the bat let us say we are drilling new well and maybe this thing I think our cap to sell for a better revenue recognition was I think two and a half thousand barrels or 3,000 barrels per day or I don’t know means there was some cap on that because after that we would be paying a lot of higher royalty. So how are you planning on that?
Jeevanandam
We are planning for a total of 5,000 barrels per day. That’s our planned production for B80 and. That we will be within that we will have a reasonable share to the government. We are better off even at an. Oil price of $60 per barrel.
Tejas Shah
Okay. So that we will not have to pay higher royalty and all Correct, Right.
Jeevanandam
Because either your volume or the price. Which determines the total share to the government.
Tejas Shah
Okay, okay, fair enough. Thank you.
Jeevanandam
Yeah, thank you. Thanks.
operator
Thank you. The next question is from the line of Amit Mehendale from Robo Capital. Please go ahead.
Amit Mehendale
Thanks for the opportunity. So my question is on the capex. So what is it that that. So out of the 1250 crores of total capex what will be our debt. Level at the end of the capex? Say two years, two and a half years from now. See with the. See what happened?
Jeevanandam
What the wells we are drilling right now it will be hooked up to production. So we will not be going beyond this 250crores debt and which will get. Within two years we’ll be getting the dentistry status.
Amit Mehendale
Okay. And I just wanted to reconfirm the. Number of the production we are expecting. After the end of the capex. What type of production target that we. Have.
Jeevanandam
10 wells in offshore and about total about 30 wells in onshore all put together we are expecting we will. Reach our growth target of 10,000 barrels a day for our share. That’s our plan, that’s our visual projection and we are executing to that we are planning the gap between the reference and visual. Sure.
Amit Mehendale
So that’s it from mine. Thanks.
Jeevanandam
Thank you.
operator
Thank you. A reminder to the participants. Anyone who wishes to ask a question may press star and one on their touchstone telephone. The next question is from the line of Vaibhav from Honesty and Integrity Investments. Please go ahead.
Vaibhav
Yeah. Hi sir. Thanks for providing the opportunity. Just a follow up on the northeast gas connectivity. So one is a common carrier issue that you explained your assessment that maybe you know DNPL might become common carrier. That’s what I think we need first question was on that that you know there’s no as of now I don’t see on the PNRG from. From the regulator. This is a proposal to convert DNPL into common carrier. And once the proposal is put forward to then there will be a lot of regulatory process that it will go through. So how realistic is our assessment that this will get done by the end of the year? You know this financial year.
Jeevanandam
Whether it is a common carrier or contract carrier once the line get augmented that the. Gas has to go to in the pipeline. Right? It has to go up to that numbly. Good. So once it gets numb Liga Namligar to Gauhati is already connected which is a common carrier of iggl. Yes. So this only one of DNPL line alone cannot be a stumbling block. Right. And second thing would have seen that the entire we are a small player. In the whole sector and there are. Many oil, India and others all of us interested in this line connectivity. So that is going to be an issue which is. Which is solved on its own by the government. Government is taking all initiatives to make the standard gas to be put on into the use. So I think we are hoping that should not be a problem to us on the demand ramp up.
Vaibhav
And on this also. Secondly I think from Guwahati onwards I think a compressor station is required at Guwahati to push the gas forward into. So what is the status on that?
Jeevanandam
That I am not aware much because what we understood is that there they will be get trying to hook up. This line in a manner that gets into the national grid at the earliest. Earliest means by at least we hopefully. By end of March.
Vaibhav
Understand? That’s it for my session. Thank you.
Jeevanandam
Thank you.
operator
Thank you. The next question is from the line of mehul Panjwani from 40 cents. Please go ahead.
mehul Panjwani
Hello sir. Thank you so much for the opportunity. So my one question is I joined a bit late so I just want to know if there is Any update on the report which was expected from Petroviatnam and how if at all there is an update? How are you trying to monetize? What is the timeline for monetization?
Jeevanandam
Petro Vietnam is reconfirmed our internal working and they are also, they have come. Out with a good report and they. Are saying to go for two infill. Development wells using the existing platform and one appraisal well. So three wells with the existing platform. Using the existing platform and one well. Is an exploration outside the platform. It’s about little, about 1km away from the platform. So their four well planned. They’ve given. They’ve given the well trajectory Also we are embarking on planning the first well drilling before the end of this financial. Year and we are trying to line. Up the drilling rig as well as. The other long lead items and also pursuing the whatever the clearances record from. The Ministry of Environment and Forest.
mehul Panjwani
Right sir. So sir, this will. How much will be the CAPEX for this?
Jeevanandam
It is capex because being a platform drilling we are expecting about three wells is about $30 million and by all. Probabilities the total CAPEX as estimated initially for four wells together it should not exceed $50 million.
mehul Panjwani
Okay, and when will it start adding to our revenue?
Jeevanandam
Sir, it is on the platform, you. Know, then we are successful then it. Will get added on the variable and. We are also talking to the companies. As it’s for the possibility of the. Connectivity in the line and other things. There should not be any constraint on the gases that we are discussing with. The gale in a manner once we. Are ready to the gas apply then. They should be able to sell it.
mehul Panjwani
Okay sir, any anything we have received any update on the arbitration which is going on with PY3?
Jeevanandam
It’s the arbitration.
mehul Panjwani
Okay.
Jeevanandam
It’s not a tribunal is has to be constituted also tribunal is constituted. We’ll put forth our views to. No, I don’t know, it will take some time. Actually tribunal has to be constituted it.
mehul Panjwani
Okay, okay. And some last thing is on Karang last quarter we had mentioned that we will be drilling one well every month. So did we drill three, three wells in the. In this quarter?
Jeevanandam
Four wells we have drilled and completed and the fifth one is in progress.
mehul Panjwani
Great sir, thank you so much and. Wish you all the best. Thank you so much.
Jeevanandam
Thanks.
operator
Thank you. Before we take the next question I would like to remind the participants. Anyone who wishes to ask a question may press star and one on their touchstone telephone. The next question is from the line of Andre Purushottam. From Qualito Advisors. Please go ahead.
Andre Prushardam
Yeah, thank you. I just wanted to ask a few very basic questions. One is that is there any seasonality in your business and therefore is the year on year comparison more valid or is the quarter on quarter comparison more valid?
Jeevanandam
See, year on year would be more appropriate because the quarter to quarter mean sometimes the demand in the. Which is. Varying in the offtake. If the offtake issues are there, local demand is one of the constraints. And second thing from our side availability. During the monsoon, say one from our. Side, one from the market side. So that’s why it’s having some element. Of a seasonality either in production as.
mehul Panjwani
Well as in the demand. So it’s better to compare the number annually. But is there any predictability of the seasonality? For example in certain capital goods companies there is a skew towards the last quarter in the sale because government budget seem to exhausted. Is there any reason here or is it random?
Jeevanandam
To some extent it’s basically though the. Demand constraint in one seat out through the gas grid then it’s not the. Decisionality will go off. That’s what we believe and we are. Also working on it. How to reduce the shutdown in the offshore. If both the things are there, there. Would not be any seasonality and we. Should be able to our quarter to. Quarter comparison would be relevant.
mehul Panjwani
Right. The second question that I had was. I know you have alluded to in this call but I don’t understand the basics of it. This various adjustments that you have made. 40% PI acquisition, bat day rate reduction of MOPU and FSO. You have for the previous quarter first deducted 33 crore from the revenue and then you have deducted 6 crores from the expenses. Can you just explain to me in some detail as to what are these items exactly and how should I therefore compare the performance on a Q and Q basis between Q1 26 Note to.
Jeevanandam
The accounts you can refer that. What is happening is that. Yeah, there is a note number three. We can refer it into the results and that explains the whole thing.
mehul Panjwani
In essence. How could I compare the performance of Q1 and Q4 25 I should just.
Jeevanandam
Take these items out of is akin. Actually I don’t think there is not much variations between both the things you look at. The volume of production remains the same almost and there is some reduction in. The revenue, there is some increase in volume, both get compensated. And the quarter four and quarter one. I don’t think much this much difference.
Andre Prushardam
Okay, thank you. Thank you. Thank you.
operator
Thank you. The next question is from the line of mehul Panjwani from 40 cents. Please go ahead, sir.
mehul Panjwani
Thank you so much for the follow up. Sir, can I just say, I mean is it a fair assumption to make that you know this monsoon we had less disruption in the production days compared to last monsoon.
Jeevanandam
Because that’s. Because that’s what I vaguely remember from last conference call. That. Please. I can’t predict the monsoon as such. So let it get over. Then I’ll tell you comparatively what we done so far.
mehul Panjwani
No, no. I’m saying so far. So far.
Jeevanandam
So far we are similar to the last mansion. We have not better off. Okay.
mehul Panjwani
Okay. Okay. I appreciate, sir. Thank you. Thank you so much.
Jeevanandam
Thanks.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
Jeevanandam
Okay. Thank you all. We are drilling in onshore. And this momentum will continue until we unlock the value of all our onshore assets. We will start our offshore drilling campaign in the last quarter of this year. And will continue until we put all the offshore blocks in value mode. This will increase the production as well as the reserve base of the company. Our committed in house team with the support of external experts as needed will ensure to meet our growth targets. Once again. Thank you all for joining us today. Thank you.
operator
Thank you on behalf of Hindustan Oil Exploration Co. Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.