Hindustan Oil Exploration Company Limited (NSE: HINDOILEXP) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
R Jeevanandam — Managing Director
N.S. Senthilnathan — Chief Financial Officer
Analysts:
Nupur Jainkunia — Analyst
Riddhesh Gandhi — Analyst
Rishikesh Oza — Analyst
Unidentified Participant
Amit Mehendale — Analyst
Darshika Khemka — Analyst
Shaurya Punyani — Analyst
Gautam Rajesh — Analyst
Manpreet Arora — Analyst
Manan Patel — Analyst
Sanjeev Damani — Analyst
Dhruv Rawani — Analyst
Abhilash V — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Hindustan Oil Exploration Company Limited Q3 and Nine Months FY ’25 Earnings Conference Call, hosted by Valorem Advisors. [Operator Instructions]
I now hand the conference over to Ms Nupur Jainkunia from Valorem Advisors. Thank you, and over to you, ma’am.
Nupur Jainkunia — Analyst
Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Nupur Jain Kunia from Valaram Advisors. We represent the Investor Relations of Hindustan Oil Exploration Company Limited. On behalf of the company and Valadem Advisors, I would like to thank you all for participating in the company’s earnings conference call for the 3rd-quarter and nine months of the financial year 2025. Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management beliefs as well as assumptions made by information currently available to 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 call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today’s earnings call and hand it over to them for opening remarks.
We have with us Mr, R Jeevanandam, Managing Director; Mr N.S. Senthilnathan, Chief Financial Officer; Mr Krishnan Raghavan, Chief Technical Officer, ENP. Without any further delay, I request Mr to start with his opening remarks. Thank you, and over to you, sir.
R Jeevanandam — Managing Director
Thank you. Good morning to you all. Hope everyone has received the updated presentations. It is on our website for your reference. I have with me Krishnan, CTO; and Sanjal, CFO; and Daisy, our Company’s Secretary. I would like to start with updates on Northeastern region. After the Dirok workover, San 9 is on continuous production and we plan to activate 4 wells. Pre-stack depth migration study has been completed to place the new development wells and to target all deeper sands. Land acquisition for new development wells are initiated. Gas sales for the current quarter is 17.64 million standard cubic-feet per day and the uptake in the previous quarter was 15 million standard cubic-feet per day. There is a marginal increase in the current quarter. Therefore, the sales volume of current quarter is 0.44 Bcf compared to 0.37 Bcf in the previous quarter for our share. Condensate is 7,499 barrels compared to 5,858 barrels in the previous quarter though the steel can produce more than 50 million cubic-feet of gas, we have to restrict the production due to lack of demand. Price realized in the current quarter is US dollar 8.25 per mmbtu, whereas it was dollar 9.08 per MMBtu in the previous quarter. The price business of BPAC in the nominated block was about block is about US dollar one per MMBtu. As long as the price of gas for the nominated block is lesser than the PPAC price, first uptake will be from ONC and oil. Therefore, the full potential of the field could be activate — achieved once the demand constraint is eased out. We have been updating ourselves with the progress of Northeastern gas grid.
Yes, and when the concept of common carrier is accepted and the connectivity is established, the situation of the demand constraint would get reversed. It is difficult to predict the timeline, but we believe that it should be operational in 2025, ’26. We have received the approval from our Polution Control Board for one-well and we plan to drill this well after the formation. We are ready to meet the potential increase in-demand once the demand concern is eased out by connecting the Northeast gas to the national gas. Joe and Pro only one subsidiary is the operator to Glob and the group has 35% participating interest in the block. Continuous workover is being carried out in the producing wells to maintain current production. Our program to drill the development well will commence before the end of this financial year and an exploration well is being pursued with the partners for approval.
Pro operating office in Delhi has been moved to Chennai for operation. We have successfully completed the public hearing at Kashn, Pradesh on 26th November 2024 for EC clearance — for a nominal clearance. About 250 people participated in the public hearing and we received the full support for the project. The Environmental Committee meeting was also held on 9th January 2025. EAC has recommended the project for approval to MOEF. We are awaiting the final formal approval from EF. 1,000 per rigs have been secured and the LOE issued for drilling man wells. Civil work tender is under finalization, contracts for other services are under discussion and we endeavor to commence the drilling of first development well in Kashan before the — before 31st March 2025. We also plan to drill on exploration well subject to partners’ approval in the ensuing financial year to the depth of about 404,000 meters, which would unlock substantial value on the block. Our plan to drill initial nine wells in upper region would increase the fuel production at the earliest. Depending on the results, we will continue to drill shallow wells to enhance the production.
We believe substantial upside exists in lower region, paper and barrel formation. With the connectivity of northeastern gas grid to national grid, monetization of the gas development would be faster with a better price. ONHP 2017 oblign adjacent to called as a greater is unelected structure. We are expecting the extension of the block for one more year to start and complete the committed work program. Plans are laying approach road and civil work is in-progress. We have carried out the depth migration study, which is quite encouraging and the prospects look much better. Our capital outlay for the Northeast region for the next two financial year continues to be to INR250 crores, Cambe blocks. In Cambe, we have secured the environmental clearance after four years for Balon and. We have also received a consent from the pollution Control Board. We have secured a rig for — for workover of two wells in North Balon and will start as soon as we get the final approval from partners. We have also secured a drilling two wells in and tangibles are in-place to commence the drilling, awaiting approval from our JV partner.
After the initial workover and drilling, we will continue with the drilling of additional development wells. We are also expecting the final clearance of ring PSE along with the extension of block. This could add substantial value to the blocks. Now I move on to offshore blocks. We are awaiting the award of DSF special 2024, wherein we bid for Block 315 in Mumbai offshore, we discovered small field with an area of about 332.4 square kilometers. Being the sole bidder under an award of the block by Government of India, we will embark on the development of this field. Water depth of this field is about 40 meters. P80, both of us are on production. Production in the current quarter is 88,073 barrels of oil and 0.629 to Bcf of gas compared to 58,000 barrels of oil and about 0.38 Bcf of gas in the previous quarter. During this quarter, the average gas price realized is 10.78 compared to 9.89 per MMBtu in the previous quarter. Now the gas price in Western region is moving akin to the imported LNG price. In PY1 offshore field, all facilities for processing and transporting gas are in existence.
We have issued a letter of to PetroVietnam, a state-owned oil and gas company in Vietnam, producing oil and gas from the basement into the complex geology of PY1. PetroVietnam will evaluate the block potential as well as review the locations released by the team. This will bring new hope to the field. These studies will give more confidence on our plan for three wells. And if everything goes as per planned drilling of the first well will commence in ’25-’26. The existing contact with the Gail has expired after the completion of 15 years. We are confident about the reserves and resources in our existing blocks and our forthcoming drilling program will add to the results by testing other surface. For this quarter, our consolidated turnover is INR156 crores compared to INR100 crores in the previous quarters and our profit before-tax for this quarter is INR52 crores compared to INR13 crores in the previous quarter. Our net-debt is zero. This volatility in quarterly results is due to factors beyond our control such as weather, price and the demand. We will continue our efforts to maximize the value of underlying assets, both onshore and offshore.
Now Sandhil, our CFO, will update on the financial results. Over to Sandhil.
N.S. Senthilnathan — Chief Financial Officer
Thanks, Mr. Good morning to all. Standalone revenue for this quarter is INR72.46 crores compared to INR51.85 crores in the previous quarter. The increase in revenue is mainly on account of VAT field, continuous production and improved offtake in. VAT revenue for the current quarter is INR35.52 crores for gas sales compared to INR16.96 crores in the previous quarter. Oil in-stock is adjusted in the operating cost. Price for the current quarter for BAT gas is $10.78 per MMBtu compared to US dollar 9.89 per MM BTU in the previous quarter. In the case of, revenue for the current quarter is INR34.76 crores compared to INR32.33 crores in the previous quarter. During this quarter, 436 mm SCF of gas was sold compared to 369 mmccf of gas sold-in the previous quarter. Similarly, 7,499 barrel of oil were sold-in this quarter compared to 5,858 barrel of oil sold-in the previous quarter. Field operating expenses for this quarter in the standalone accounts is INR71.92 crores compared to INR49 crores in the previous quarter.
Other costs including depreciation, depletion and amortization, finance costs and others is INR11.57 crores for this quarter compared to INR10.34 crores in the previous quarter. After the total operating cost in the current quarter, credit adjustment for oil stock is INR29.47 crores, whereas it was INR13.6 crores in the previous quarter. The increase is mainly due to continuous production of oil from blocks, which is 52,844 barrels for the current quarter compared to 35,344 barrels in the previous quarter. Standalone EBITDA for the current quarter is INR15.59 crores compared to INR9.73 crores in the previous quarter. Profit-after-tax for the current quarter is INR4.93 crores compared to INR1.11 crores in the previous quarter. In consolidated accounts, the revenue from operations for this quarter is INR156 crores compared to INR100 crores in the previous quarter.
Total expenses in the consolidated accounts for the current quarter is INR97.73 crores compared to INR86.17 crores in the previous quarter. The increase in cost is due to increase in sales operating costs in VAT fields as production days increased in the current quarter. In the consolidated financials, EBITDA for this quarter is INR77.69 crores compared to INR36.467 crores in the previous quarter. Consolidated operating profit before-tax is INR52.47 crores against INR13.41 crores in the previous quarter. Profit-after-tax on the current quarter is INR43.32 crores compared to INR10.81 crores the previous quarter. As on 4th September 2025, the term-loan outstanding is about INR91.25 crores and the net-debt is zero. We have rating with positive outlook for INR500 crores loan by India Ratings. With the current cash position and with the continued production, we will meet all our obligations, including the planned capital program for the coming three years. Thanks, and back to Mr.
R Jeevanandam — Managing Director
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 will wait for a moment while the question queue assembles. The first question is from the line of Riddhesh Gandhi from Discovery Capital. Please go-ahead.
Riddhesh Gandhi
Hi, sir. Just had a few questions. With regards to — to actually VAT, how much is the inventory we are holding right now and how much do we need to actually the oil sale? And do we like cover our exchange rate or this sale we do will be on the existing dollar exchange rate?
R Jeevanandam
Yeah. Yes, thanks for the question. BAT, our current stock is 3,7370,000 barrels and our optic we plan to do the optic before 31st March of this year. And yes, that we don’t hedge either the oil price or the exchange rate. So we would be looking for a better price to carry-out the uptake before 31st March of this year.
Riddhesh Gandhi
Got it, sir. Sir, just to understand, you have mentioned in the presentation that you have cleared off all of the blockages and the new houser and all has been installed. Has that all happened in Q3 and were there any — in any shutdown days? And if so, how much is the existing run-rate of production from BAT compared to what we had in Q3?
R Jeevanandam
Yeah, I think we don’t expect any more work to be carried out in the 4th-quarter. So we believe that is any unfortune even then we have to take into consideration.
Riddhesh Gandhi
But in Q3, did we have any issues?
R Jeevanandam
No, we are not take. So okay. No, no. The entire 92 days were fully operational. And Q4 also, we are expecting the same line, except couple of days, some changes are something which you would like to do with.
Riddhesh Gandhi
Got it. And with regards to and DiRock, we had earlier spoken about potentially actually the incremental exploration happening after the connectivity happens, you know. So is it that we have the visibility on the connectivity now, which is why Hawaiwe going ahead and drilling incrementally? And is there any sense on actually how advanced it is and just some idea on the timelines?
R Jeevanandam
See we expect it should get connected and there should not be any demand constraint for our volume of gas by end of this financial year. So — but any small bits and pieces works are being carried out and it will take — the timeline given by them is somewhere around 31st of this 31st March of this year. But this is not in our direct control and we cannot commit to that date. Of course, of course it is not going to — but effectively what, what, what they are saying and I understand that there could be slippages that by hopefully by 31st of March, we should have the connectivity to December yeah, right.
Riddhesh Gandhi
Got it. Sir. And the last question is that we were the only bidder for the oil drill block, which you mentioned, which we have done on in the auctions. Just to understand, is there any reason why others hadn’t bid and what did we see in that in terms of the opportunity or is it because we already have assets which we can leverage, we were the only people faced. Well, just wanted to understand the rationale behind the new bid.
R Jeevanandam
So the rationale behind this, our J&P team has evaluated the block. And we have got 342 square kilometer area in the discovered one. We believe substantial potential exists in the field, that is our basis for bidding on it. And second thing, it is a shallow depth. It is a 40 meters water depth and we can bring some innovative technology in such a manner, we can build the wells faster and put it on production. And even with your opening discovery, we can make money out of it. That’s the reason we went ahead.
Riddhesh Gandhi
Got it. Understood. Sir, thanks and all of the best. Thank you.
Operator
Thank you. The next question is from the line of Rishikesh from RoboCapital. Please go-ahead.
Rishikesh Oza
Yeah, hi. Thank you for the opportunity. Sir, would like to know what revenues can we do in FY ’26? Would it be fair to say that we can do INR1,000 crore revenue and on that what kind of EBITDA margins can we do?
R Jeevanandam
Yes, could you see that our EBITDA margin is somewhere little over 50%, around 50% to knock-out all our other costs. So that’s the reason when our top-line is doing better, then we can get the margins of INR250 crores should be an easy target for us to spend per annum.
Rishikesh Oza
And we should — and would it be fair to say that INR1,000 crores revenue in FY ’26?
R Jeevanandam
See, we will be reaching the revenue of INR1,000 crores. If you look at, our consolidated revenue is in the — it’s in the order of about 800 crores right now in up to nine months, so we will be somewhere around INR800 crores and with the full potential of the Dirag field and the continuous production of the BAT and we are getting some more wells drilled in CASA, we will be able to reach to the revenue level by the next financial year. That’s our wishful projection okay.
Rishikesh Oza
Got it. Thank you.
Operator
Thank you. The next question is from the line of Ajit Sanjay [Phonetic] from Nizar Enterprises. Please go-ahead.
Unidentified Participant
Hello. Hi, sir, am I audible?
R Jeevanandam
Yeah, thank you.
Unidentified Participant
Yes, sir. Good morning. Sir, I just wanted to have an understanding on timeline of the Northeast gas grid pipeline. You just mentioned it. But in the last call, you mentioned that the gal pipeline is expected to be completed by December. So sir, is it completed or —
R Jeevanandam
The gail line after is completed and that is ready from to normally there is under commissioning and that’s what we — these are — when we discuss with them, this is what we understood. And the DNPL line is getting repaired and so the DNPL line connection also expected by end of 31st March. This is what is the plan at the moment by the respective authorities who are handling this issue.
Unidentified Participant
Okay. And IGGL pipeline, sir.
R Jeevanandam
IGGL line is already there up to Gawathi to. And once the DNPL line becomes the common carrier or if there is any arrangement between IGCL,. Now IGCL lines from to from to would be there under their control. And they are laying another line which has been already-approved by the Government of India. That will take little more time. So till the time, this DNPL line will increase the demand assets that will meet our requirements.
Unidentified Participant
Okay. So for us, DNPL line is important and not IG, right?
R Jeevanandam
IGL line, it’s important in the sense when we go a ramp-up to 70 million cubic-feet of gas per day.
Unidentified Participant
Okay. Okay, understood. Thanks. Thanks.
Operator
Thank you. The next question is from the line of Amit from RoboCapital. Please go-ahead.
Amit Mehendale
Thanks for the opportunity and congrats on good set of numbers. My first question is on capex. Sir, we had earlier guided about INR1,000 crores capex late over three years. Could you add more color to that? Are we on-track? What is the plan now?
R Jeevanandam
See, actually if you could look at actually this year, we are not able to spend some money. You could have done some wells in the and some wells in the Nath, but that didn’t happen actually. But we did a workover that is taken about some INR20 crores. And total our capex plan in the current year is not up to the mark. And this all linked to the regulatory clearance as well and nominal clearance and others. Now we are having all those clearances in-place. Our capital spend and drilling will get a momentum from ’25, ’26 onwards. Then after that whatever the EBITDA we generate, most of the money will be spending on growth of the company by drilling the wells.
Amit Mehendale
Is it fair to say that next year we’ll spend about INR300 crore INR50 crores or that ballpark like INR300 crores a year provided all the production assets stay as we all know.
R Jeevanandam
That’s right. So whatever the cash generated from the company would mostly like to go into the capex of this.
Amit Mehendale
Sure. Thanks. That’s it from me. Thank you.
Operator
Thank you. The next question is from the line of [Indecipherable] from N Square Capital. Please go-ahead.
Unidentified Participant
Yeah, good morning, sir. Congratulations for the great work you’re doing in this.. Sorry to interrupt, sir. I would request you to please use your handset. Yeah, good morning, sir. Congratulations for the great work you’re doing. Thank. For the INR1,000 crore CapEx we are doing, could you give us the breakup of how much would be on the onshore and how much would be for the offshore.
R Jeevanandam
See, if you look at our major expenditure on the North is about INR250 crores and about INR50 crores to 60 crores on the western region. The balance, most of the things will go for offshore.
Unidentified Participant
700 and 300 to 300 onshore.
R Jeevanandam
I said two goes to offshore on goes to onshore.
Unidentified Participant
Fair enough. And on the, sir, could you give us more color on in terms of timeline of when we can hit production and what kind of incremental output can come?
R Jeevanandam
And see we are currently it’s about 360 barrels on production okay we will be starting the shallower wells on the upper Gurigen stand. It is all shallow depths which is around less than 1,000 meters, 1,200 meters type. We have already final drilling rig, which will get mobilized now. Civil works are in-progress. Our first well will start but we expect it to start by 15th of March plus-minus one-week so from there we are continuously drilling nine wells. So this nine well program if we expect reasonably about 100 barrels each well then we will surpass 1,000 barrels, 1,200 barrels. And even we get into the lower estimate we look at, we will be reaching at least 1,000 barrels in the next financial year.
Unidentified Participant
Okay. So 1,000 barrels plus 300 additional — so 1,300 would be our total?
R Jeevanandam
1,200 barrels you can say if we assume on it.
Unidentified Participant
Fair enough. And for the evacuation infrastructure and all everything is in-place, sir.
R Jeevanandam
You saw the facility up to 5,000 barrels.
Unidentified Participant
Okay, great. Thanks a lot and all the best.
Operator
Thank you. The next question is from the line of Darshika Khemka from AV Fincorp. Please go-ahead.
Darshika Khemka
Hello, sir. Thank you for the opportunity. Firstly, do you broadly —
Operator
Request you to please use your handset.
Darshika Khemka
Am I audible now?
Operator
Yes ma’am.
Darshika Khemka
So thank you for the opportunity and firstly I missed your — the production number that you had given for B80, it’d be great if you could repeat that. Secondly, the last-time around previous quarter, you had mentioned that the net realizable value for the closing stock of B80 was 73.69 per barrel. What was the rate this time around and what was the inventory gain that we have been able to do?
R Jeevanandam
So you wanted to know the production numbers yes and that is production numbers based on the current quarter is 88,000 barrels of oil and 692 mmacf of gas say 0.69 Bcf of gas.
Darshika Khemka
0.69 Bcf of gas all right and the net eligible value for the closing stock sir.
R Jeevanandam
Closing stock valuation is done at 73.5 or something $73.3 $2 and now it is —
Darshika Khemka
Expecting it to be a little higher than the last quarter.
R Jeevanandam
Mark-to-market on the date of closure of the books right so that should be the price on the. So we have to take that. What is accounted is based on the $73.32 per barrel, but we endeavor to sell it only at $80, not lesser than that.
Darshika Khemka
Okay. So we did not have an inventory gain, is it this time around?
R Jeevanandam
No, it is not — no inventory gain because it is almost in your.
Darshika Khemka
Okay, all right. Yeah, that’s it from me. Thank you.
Operator
Thank you. The next question is from the line of Shaurya Punyani from Arjav Partners. Please go-ahead.
Shaurya Punyani
Hi, am I audible?
Operator
Yes, sir.
Shaurya Punyani
So I just missed your earlier. So what will you said about FY ’26 revenue projections.
R Jeevanandam
See it’s not proper in this industry to give any guidance. Okay, that’s not fair also because either way I’ll be incorrect. So it is you can say the reference will be doing little better than the current year.
Shaurya Punyani
Okay, and current India, where should we close at next in three or in nine months we have around 3 80 crores type of revenue so where can we close FY ’25?
R Jeevanandam
So you’ll be doing better in the 4th-quarter because everything goes well so we will be somewhere little lesser than the previous year and somewhere closer to the — better than the current year, current quarter.
Shaurya Punyani
Okay, sir. Okay. Thank you.
Operator
Thank you. The next question is from the line of Gautam Rajesh [Phonetic] who is an individual Investor. Please go-ahead.
Gautam Rajesh
Good morning, sir. Thank you for the opportunity. I had two questions. My first question was, when is the pipeline connectivity expected for — to be established for DRock? From which month can we roughly start seeing a ramp-up of the gas volumes from?
R Jeevanandam
We have the 18 inch line is getting connected with the Oil India line for 15 kilometers then the oil India line will take it up and that will go up to Jan. From it gets into the DNPL line that comes to. From it gets into the IGGL line that goes to this is what is that so the once the DNPL and up to it gets connected and upgraded, then that’s a starting point for us. So which we expect should be by end of this financial year, but that is not in our hand. If everything goes well from ’25 ’26, there should not be any demand constraint, that’s what we believe. But again, it is not in our hands. That’s what I can repeat it.
Gautam Rajesh
Okay. My next question was, for the VAT, will we continue at current levels or is there a scale-up expected or the next few — over the next few quarters without taking any additional wells or will the next scale-up happen only when new wells are done?
R Jeevanandam
So the next scale-up will happen with drilling a new well. So we are looking at internally discussing whether to advance a drilling. That’s what we plan.
Gautam Rajesh
Okay. Okay, understood. Thank you, sir. Thank you, sir. Thank you. The next question is from the line of Manpreet Arora from Aurora Wealth Advisors. Please go-ahead.
Manpreet Arora
Yeah. Hello. Am I audible?
Operator
Yes, sir. Yeah.
Manpreet Arora
Thank you for the opportunity. Sir, sir, would you be able to help us with understanding this APM pricing versus PPAC pricing. So my understanding is that because of the KP, the Parik Committee, there was a floor price that was floor and ceiling that was applied to the APM, which was $6.5 the ceiling, but that was supposed to increase every year. And so will that increase happen this year? And then does that impact the PPAC pricing as well? Is there a formula linking the APM and PPAC pricing like, for example, it is 6.5 and will be at least $1 above, etc. Just if you can help understand how these work.
R Jeevanandam
Each PPAC prices linked to the crude price, imported crude basket of India, that is about 10% of the price. Suppose the crude average price is say $80, our PPSE price would be $8. But this there is a ceiling for that in that case for the nominated blocks, the blocks which has been under nomination to Oil India and ONGC, predominantly most of them that would be a ceiling price of $6.5 there also they have given a leeway to them. If the new production they will get some additional premium on it in a way that we are in the process. I think the market is in the process of getting to the discovered price by market rather than by the administered price either the PPAC price or by the price fixed by the government, right? So if the market is — now the freedom is existing actually. So we will go for new options, we may get a better price if the demand exists. But we are not willing to sell it below the TPAC price. That is what is there in the western — in the Eastern region. But the Western region, we will be selling more than the TPAC price because there is a demand exist.
Manpreet Arora
Okay. Okay. So sir, if the — if it is 10% of oil, which means if the oil prices come down, then let’s say it hits below $70, then the PPSE price will be biggest around $7 and sir, you know. If I look at the PPACE website, the notified prices for the last quarter for PPAC were below $8 for the three months, but we have the average price realized at $8.25 for the previous quarter. So PPAC price is based on the grass caloritic value.
R Jeevanandam
But when we process the gas is sold, it gets into net value, so 10% premium is get added directly.
Manpreet Arora
All right. Thanks, sir. And sir, on BAP, I think a previous participant also asked. So the current flow that is happening of gas of 7.52 and the barrels — oil at 957 barrels, is this a steady-state for, let’s say, till the next six months before monsoon hit us.
R Jeevanandam
I think the same level will continue.
Manpreet Arora
Okay. And sir, you mentioned that you know for — you’re looking to sell this oil not below $80 and so is that under our control or that is also market-driven?
R Jeevanandam
It is actually on the price in the market. What is the quoted price in the the brand price most? Then that’s the time you can plan it to sell so your total time taken for will not be more than about 10 to 15 days so that is the reason we are targeting in such a manner we get a better price at the point in time we will offload because otherwise we will have a storage capacity up to 900,000 barrels.
Manpreet Arora
Okay. So if the price is not under — or price is not favorable, then we will store it.
R Jeevanandam
But we have that leverage you test because of the excessive storage capacity.
Manpreet Arora
Okay. But we don’t have a hedging policy where we would like to lock-in the prices.
R Jeevanandam
Generally, we go for a natural hedging the sense both the dollar as well as to the price. All right. Thank you very much, sir. Thanks.
Operator
Thank you so much. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Manan Patel [Phonetic] who is an individual investor. Please go-ahead.
Manan Patel
Thank you for the opportunity, sir. And congratulations for improved set of numbers. Sir, the first question is regarding PY1. So PetroVietnam will help us in drilling or it’s just a formation of where we want to drill the wells? And by what timelines can we expect to start drilling because we were expecting in Q1 FY ’26, so what is your updated view on that?
R Jeevanandam
So Nan, that PY1, it is a complex. It’s a complex geology. It is a basement. Now we have to find out a person who knows the full knowledge on that. In the whole world, the best knowledge emanates from the better Vietnam because these guys are producing from the basement results. So that is why it’s being a government company, it took longer time to get-in touch with them and get the contract finalized. Now we finalize the contract with them and we are sharing the data with them. So it is like a specialist doctor to instead of going for a general physician, you go for a specialist doctor to get the full review done. So that is what we are in the process at the moment. So they will be not only reviewing our three locations, so they will be reviewing the entire field potential. So that would be a good beginning for us. And with that, we will be spending the capital judiciously. That’s what it is.
Manan Patel
Okay. But so have we contracted them also for the drilling part or drilling we will do?
R Jeevanandam
No, no, no, no. Drilling and all this can be done by ourselves. There is no need, but only the evaluation and the geological model review and any other suggestions they give how to drill and where to drill that becomes important.
Manan Patel
Got it. Got it. And that should take like three to four months before —
R Jeevanandam
Yeah, they are — they will be giving a report to us within about 90 days. Okay, we have started uploading the data. Now once the data-set is also big volume for where — because Chinese is over now, so probably they will start work from next week on.
Manan Patel
Got it. Got it, sir. Sir, the second question is on the DRock. So like from what I understand, there are other players also waiting for the same pipeline to get online and start maybe drilling or additional production, a lot of small and big players there. So like once that pipeline comes online, do you think like it will have the capacity to absorb all the production apart from our production as well?
R Jeevanandam
Yeah, our production is current. The others production as expected. That’s the difference.
Manan Patel
Okay. But so we can ramp-up very fast. But once that other production also comes online maybe three, six months down the line, then can it be absorbed fully or then again, we’ll have the demand challenge.
R Jeevanandam
Then there is about 4.5 million line. IGL line gets ready.
Manan Patel
Okay, okay, so by the time everything comes online, the may bigger line will also get ready.. Hello. Yeah. Okay. Sir, last question on the B-15 and B80. So does this INR1,000 crore capex include B15 capex as well or that will be additional?
R Jeevanandam
That is not for P15. B15 we have not factored it. It is for our the program of about three wells in PY3 and about three wells in B18 and D15 we the base.
Manan Patel
Okay. And sir, lastly on B80, so we mentioned — so is it about — the increase in-production is only about — is the factor of drilling wells or we’ll have to add additional evacuation infrastructure and other infrastructure for us to bring other wells on production for the existing — we don’t —
R Jeevanandam
We don’t add anything on the production facilities that will take-up to 10,000 barrel comfortably and about 20 million cubic-feet of gas processing facilities. And then the export line will take care of the transportation and sorry for moving the oil from the KGP to FSO. From FSO facility it’s about 900,000 barrels, so that should not be any constraint on this. But what is the requirement is, how do we do the additional three wells, whether we go through subsea or through a or some new ways of getting a structure and making this well-served sufficials? That’s our idea.
Manan Patel
And we have engaged some experts to do that as well or that is the internal process.
R Jeevanandam
No, no, we will be going with an external experts and our team is also strengthened. So we will be taking a full review of basic engineering and as well as a detailed engineering before we embark on it.
Manan Patel
Got it, sir. And last question, sir, when will this B15 announcement will be made and when will we start process of approvals and all this?
R Jeevanandam
We have been waiting for the last three months, so we will know only when it is announced.
Manan Patel
Okay. Okay, sir. And the new policy recently last quarter it came about that helping companies in terms of better, faster production and all, does it — does it help us or how — what is your view on that?
R Jeevanandam
So it helps actually we have to go and you can’t say that it’s not helping. Any other improvement they are done by the DGH in the ministry that helps us to faster it and fast-track it and they are helping wherever they could. That’s what said. Got it, sir. Thanks a lot and wish you all the best.
Operator
Thank you. The next question is from the line of Sanjeev Damani from SKD Consulting. Please go-ahead.
Sanjeev Damani
Good morning, sir. Am I audible?
R Jeevanandam
Yes, please.
Sanjeev Damani
Sir, actually, last-time I had a inquired about B80 where you had said that we have enough storage capacity offshore also. And now are you meaning to say that you have onshore facility of 9 lakh liter — 9 lakh barrels of petroleum, which is produced from these wells?
R Jeevanandam
No, no, it is only an offshore facility we have. The system is totally offshore. That is a floating production system both on process as well as on storage that FSO is having the capacity of 900,000 barrels. So it will be transported from FSO to a shadow tanker that will move-out.
Sanjeev Damani
Okay. And now this — there is an export thing facility pipeline has been set for export also. So this is a new facility we have created now?
R Jeevanandam
No, there is no, but nothing, no new facilities. Okay it’s not a new facility. So when you said this that we can export also, so means we can sell to our Indian companies like earlier you had told to IOC. You wrongly understood the export. I mean the export means process is exported to the FSO in the sense, it is being transported to it. The FSO. Okay. Export exporting more than that.
Sanjeev Damani
Okay, okay. Exporting from the oilfield to our storage facility, something like that okay. Okay. Now and my question is that, sir, you know, we are producing some 9, 5, 7 barrels per day from this facility in last quarter. So what is the current running rate? Is it same or it is higher now hello.
Operator
Yes, sir, the management disconnected. Okay. Okay. Should I speak hello? Yes, sir, please continue with your question.
Sanjeev Damani
Sir, am I audible, sir again?
Operator
Hello. Yes, sir, you’re audible. But I think management is not responding. I’m not able to get their voice. Sir, are you there?
Sanjeev Damani
I’m so sorry. And my question is, my question is about B80 only. In last quarter, we have produced I think 95, 7 barrel per day average. So what is the production — current production run-rate? Is it higher or lower? Hello, in this quarter?
Operator
Hello. Ladies and gentlemen, we have lost the management connection. Please stay connected while reconnect. Please stay connected while we reconnect them. Thank you Ladies and gentlemen, we have the management back on-call, sir, please continue. We have lost the connection of the current participant. We will move on to the next participant. The next follow-up question is from the line of [Indecipherable] from N Square Capital. Please go-ahead.
Unidentified Participant
Hello. Yeah. Another follow-up on the CapEx only, sir. This INR1,000 crore capex will be able to do it with without taking any significant debt.
R Jeevanandam
Yeah, this is we will be — we will not be taking any debt for this.
Unidentified Participant
So we’ll be maintaining this net-debt — net cash status in next two, three years.
R Jeevanandam
Yeah, that’s right. So our EBITDA will support this. So we’ll be able to do without any debt.
Unidentified Participant
Fair enough. And sir, this currency depreciation straight away flows to our PBT or there is any cost element which hits us, which one I couldn’t get you the currency depreciation and straight away flows into bottom-line? Yeah, yeah, that’s right.
Nupur Jainkunia
That is the non-cash item gets into the balance sheet. Gets into the income statement.
Unidentified Participant
Fair. Thank you.
Operator
Thank you. The next question is from the line of Amit from RoboCapital. Please go-ahead.
Amit Mehendale
Thanks for the follow-up. Sir, my question is on this line.
Operator
MR. Amit, I would request you to please use your handset.
Amit Mehendale
Hello, am I audible now? Yes, sir. Please continue. Thanks. My question is on the nine new development wells that we are planning to do for. So sir, just wanted to check the timeline on that. When do we expect — which quarter do we expect those to be completed and the revenue flowing to P&L?
R Jeevanandam
So we will be starting the first well around the 15th of March current year. So each well will take about 20 to 22 days. That’s what it is. So most of the nine well drillings will get over on the next financial year. And as soon as the well gets connected, so we’ll be hooking upon production. So every work — every well once drilled within about 10, 15 days, we’ll be put it on production. That’s the way it will be working.
Amit Mehendale
Okay, sure. Great. Thanks. And what is the capex? I don’t know if I missed earlier, but for, in particular, what is the capex to be nine.
R Jeevanandam
Well total capex for the nine months and all the small work is about some $25 million. So our share should be about $8 million. Okay. $8 million to $9 million.
Amit Mehendale
All right. Okay, great. Thanks. Thank you. Ladies and gentlemen, you may press start and one to ask a question. The next question is from the line of [Indecipherable] who is an individual investor. Please go-ahead.
Unidentified Participant
Can she buddy thank you sorry to interrupt.
Operator
Mister, I would request you to please use your handset. Your audio is not very clear.
Unidentified Participant
Million it will be. We are ne expecting next financial year 25, 26 million Pachpan million, such one million could wait another year. So barely, you want to give up so sir, ’25-’26 financial year may first-quarter, second-quarter on sector those it is actually done by somebody else it should be from first-quarter. Sorry, first-quarter of the next year. 35 million at 35 million peak is up. Thank you. Thank you. Thank you,.
R Jeevanandam
Thank you. [Operator Instructions] The next question is from the line of [Indecipherable] from Indian Petrol Plus. Please go-ahead.
Unidentified Participant
No, I was just wondering, you know you get gas from different fields. So what kind of pricing regime do each of these gas production come under? Could you just explain it to me? I’m a little confused on that front.
R Jeevanandam
Okay. So what is happening is, see the marketing freedom except for all the private companies in India. So what is — if you have the demand is there, then the price is determined by the demand and supply, right? So there are two benchmarks are in India exit. One of the recommended price by the government of India that is PPAC price. That is 10% of the crude, right? But if the demand is more, you can sell it at a premium there on to it. And if the demand is less, you can sell it at discount there on to it. But in case of a nominated blocks, which is with only Oil India and ONGC, their ceiling price is fixed at $6.5, okay. Similarly, they get a floor price also. So for us, you can look at what is the market, what is driven by the market, that’s the price.
Unidentified Participant
Okay, so your entire gas production is market-driven essentially.
R Jeevanandam
Yeah, that’s right.
Gautam Rajesh
Okay. That’s all. And also I was wondering, sorry for this confusion again, when exactly are you going to start drilling in your B80 field.
R Jeevanandam
So BIT field we plan for so we may advance it so that’s what we are internally discussing it to ramp-up the production. So are you going to involve a consultant do a prefeasibility study and then basic engineering detail engineering how do you intend to go about it step-by-step? Now we wanted to get into the basic engineering by our in-house team then we’ll go for a detailed engineering from an external expert.
Unidentified Participant
Okay. So you understand the substructure very well. So you don’t really need any help in determining where exactly the location of the wells, etc.
R Jeevanandam
Yeah, we are strong enough. We don’t need any support.
Unidentified Participant
Okay. So the only support that you’re requiring then from an expert would be basically after you done the basic engineering in detailed engineering if there is any problem?
R Jeevanandam
That’s right. Yeah. So in terms of you said that in terms of drilling platforms, you are looking at different kinds of platforms. So what kind of platforms are you looking at, what kind of options you really have? See, we have to look at the water depth and the stability. Based on that, we are looking at the different models, or or whatever it is suitable to us, which is a low-cost one to facilitate this marginal fuel production.
Unidentified Participant
So you’re looking at drilling platforms essentially, what kind of drilling platforms will have?
R Jeevanandam
That’s. Okay. That’s all.
Unidentified Participant
And what is the cost per well you think it’s going to be? As you said, one or 3/4 of your INR1,000 crores is going to be offshore and then of course, you have other offshore establishments as well.
R Jeevanandam
So in this one, that’s your program about INR350 crores on answer is offshore is about INR650 crores.
Unidentified Participant
Yeah. So in B80 per well, how much do you think roughly the spend is going to be?
R Jeevanandam
So we have to look at actually whether we are going for the subsea wells or to the platform well because platform wells will be cheaper say to $10 million but the subsea wells it will cost more.
Unidentified Participant
So the other thing is that you know these three wells that you are drilling, is that going to be a full drilling program for the foreseeable future or do you expect more from the reservoir that you have right now?
R Jeevanandam
No, we see we are looking at — you look at the field is about 56 square kilometers, 56 square kilometer and the well intensity is much less. So we have to increase the well intensity.
Unidentified Participant
So we expect at least six wells will do the plot okay so that will tap the reservoir. Okay. So then you have a fair amount of — so this is — this B80 is coming from one-well right now, right? Two wells. Two wells. So proportionately, you could have a similar expansion in-production spanning over six wells over a given period of time in the future when you would have tapped the entire reservoir properly and get a certain amount of capacity of production out of that well — out-of-the — out of those fields. So are you looking at a 40% extraction ratio or are you looking at a higher ratio than that or is it going to be lower than 40%? I wanted to go to the —
R Jeevanandam
We don’t want to the and we look at an optimum flow from the wells for longer duration.
Unidentified Participant
Okay. So long-duration in these kind of wells like in Mumbai, they’ve been running it for decades. So you could look at about maybe 20 years or something?
R Jeevanandam
Yeah. We have a conduct for 20 years, so we should look at it.
Unidentified Participant
So 20 is a long period of time where you could get a lot of production out over six wells.
R Jeevanandam
So the wells just like that actually. We have to flow the well apart into the reservoir.
Unidentified Participant
Yeah, that’s right. And then of course, you will have IOR, UR programs also to be able to push up production, I’m sure. So that’s a lot of money. You mean to earn over 20 years, right?
R Jeevanandam
Yeah.
Unidentified Participant
True but Dirok won’t have that kind of upside right that’s limited.
R Jeevanandam
So see, you look at actually all the wells are having and all the blocks which are having an upside potential, which has not been filling that. So we’ll be drilling more number of wells depending on the demand is a constrain there in, we will be drilling more number of wells there. That’s right. And if any surprice has come in offshore, we will handle it. So that is no that. That’s.
Unidentified Participant
So you have this INR1,000 crores for your own capex, but you have the expertise now in India, onshore, offshore everywhere. So — and there are a lot of these new chaps who’ve come in with OLP blocks, small private operators who are struggling, probably lack of knowledge, probably lack of capacity, internal capacity or resources. Are you looking at any kind of acquisitions also?
R Jeevanandam
See, we are always open-to-buy it at a price and sell it at a price.
Unidentified Participant
Meaning you are willing to consider acquisitions as well.
Nupur Jainkunia
Otherwise that is our strategy, we’ll buy it at a cost and tell it at a price.
Unidentified Participant
Okay. So you can sell it at a price as well. Yeah. So is it possible that you might just sell-out one day if you get a big guy coming in and [Indecipherable]
R Jeevanandam
Whatever our expectations meet with us instead of waiting for 10 years, we’ll do it right now. Yeah.
Nupur Jainkunia
So then what will you do eventually if you just sort of another one now. There is no debt of opportunities in this country as well as outside, right? Yeah. Yeah.
Unidentified Participant
So essentially it’s the rate-of-return wherever you get more money, more buck for your — more bank for your buck, you’re going to go that way. So it’s a different picture entirely. I think it’s all theoretical. Anyway, thank you very much. Thank you. Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Dhruv Rawani from Shreeji Finserv LLP. Please go-ahead.
Dhruv Rawani
Good morning, sir, and congratulations for the great set of numbers. I just had a couple of questions. One being for the next year financial year ’25-’26, the volume triggers will be from which all fields do you feel? See the volume trigger as per our program should be under and then the. Okay. And anything on BAT will come from the Western region. Okay. Anything from BAT we expect volumes to go up?
R Jeevanandam
I don’t think so because unless we drill additional wells. Okay.
N.S. Senthilnathan
And the drilling of additional for BAT will only be in ’26, ’27 yeah, that’s right. And that we will be advancing or something we are internally deliberating on it.
Dhruv Rawani
Okay, okay. Understood. And on the B51, what would be the timelines once we get the approval from the government? Like can you just guide? Okay, once we get an approval, our render is we have to put the field on production within 24 months. Okay. So I think that is still very far away. I think in ’27, ’28 is when we can expect it to flow to profit and loss.
R Jeevanandam
That’s right. But no fuel can be developed less than two years. That is also.
Dhruv Rawani
Okay, understood. Thank you, sir. Thank you.
Operator
Thank you. The next question is from the line of Abhilash V from — who is an Individual Investor. Please go-ahead.
Abhilash V
Hi, good morning. Am I audible?
R Jeevanandam
Yes, sir, please.
Abhilash V
Yes, sir. Sir, a couple of quarters ago, you had mentioned that there is an ambition to get into oil and gas service hard assets also. So where are we in that journey?
R Jeevanandam
So we are mostly using it for the captive. When we — whatever the assets we plan for it, we will be using it for captive. We have not done anything so-far on that. We will be looking into it because I’ve got our hands full at the moment. So next year we will be trying to look at some smaller assets like some unit and other slick line unit or something like that in a smaller capital one to meet our own purposes. And if any letter time is available, it can be serviced to us. That’s why we plan for it. We don’t want to get into a future service company. Okay. Okay. That’s my only question. Thank you.
Operator
Thank you. The next follow-up question is from the line of [Indecipherable] who is an Individual investor. Please go-ahead.
Unidentified Participant
Ab Obi platform sort of you to please use your handset.
Operator
Yeah. Sir, I would request you to please repeat your question right from three and other things are expensive sorry to interrupt, Mister, your voice is not it is etcetera. Very clear your line is not clear.
Unidentified Participant
We don’t know response from the current participant, we will move on to the next participant.
Operator
As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Thank you.
R Jeevanandam
Okay, that’s nice. Thank you for all. We focus to complete the drilling of wells in both onshore and offshore to increase the production as well as increase the reserve base of the company. This will reduce our dependence on two major assets, BAGE and Dirok. Our committed in-house team with the support of external experts will ensure our growth targets. We once again thank you all for joining us today. Thank you.
Operator
[Operator Closing Remarks]