Hindustan Oil Exploration Company Limited (NSE: HINDOILEXP) Q3 2026 Earnings Call dated Feb. 18, 2026
Corporate Participants:
Saloni Soni — Senior Associate at Ernst & Young
R. Jeevanandam — Managing Director
N. S. Senthilnathan — Chief Financial Officer
Analysts:
Gautam Rajesh — Analyst
Harshit Khadka — Analyst
Dhruv Rawani — Analyst
Sucrit D. Patil — Analyst
Sabri Hazarika — Analyst
Mehul Panjwani — Analyst
Amit Mehendale — Analyst
Riddhesh Gandhi — Analyst
Rajiv Agarwal — Analyst
Nirbhay Mahawar — Analyst
Anubhav Goel — Analyst
Prashant Daya — Individual Investor
Manan Patel — Individual Investor
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and nine month FY ’26 Earnings Conference Call hosted by Hindustan Oil Exploration Company Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. Saloni Soni from Ernst & Young, Investor Relations team. Thank you, and over to you, Mr. Saloni.
Saloni Soni — Senior Associate at Ernst & Young
Thank you. Good day, everyone, and welcome to the Q3 earnings call of Hindustan Oil Exploration Company Limited. The company published its results on February 13 and has uploaded the investor presentation on the Exchanges yesterday. I trust all of you have had the opportunity to review them.
Before we start, a disclaimer. 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. Participants are cautioned not to place undue reliance on these forward-looking statements while making their investment decisions.
On that note, let me introduce you to the management participating with us in today’s conference call. We have with us Mr. R. Jeevanandam, Managing Director; Mr. Senthilnathan, CFO; and Ms. Josephin Daisy, Company Secretary.
Without further ado, I would like to hand over the call to Mr. Jeevanandam. Thank you, and over to you, sir.
R. Jeevanandam — Managing Director
Thank you. Good morning, everyone, and welcome to the quarter three financial year ’26 earnings call. From our team, I have Krishnan Raghavan, our Chief Technical Officer; N. Senthilnathan, our Chief Financial Officer joining me on this call. I will start with the updates on the Northeastern region.
Let me begin with an update on the Kharsang block. As of today, we have drilled eight wells and ninth well is in progress. Out of the eight wells, five wells are oil wells and sixth well is completed as gas well. The other two wells will be perforated once the drilling of the ninth well is completed and will be hooked up for production.
Sixth well encountered with well control issue is resolved and converted as gas producer. It was tested for production and with a minimum choke, it can be on continuous production of about 2 million standard cubic feet per day. The results from the sixth well authenticate the substantial volume of gas, which can be commercialized at the earliest once the Northeast gas grid is fully operational.
Though we have completed the drilling of seventh and eighth well, will be perforated along with ninth well once the drilling of the ninth well is completed as all the three wells are in the same plinth. You are aware that we have secured environmental clearance for drilling 40 development wells and three exploration wells in the block. We will continue to drilling to reach the full potential of the block subject to partners’ approval.
Our current production level is about 800 barrels per day and some workover of existing wells could not be taken up due to repair of workover rig, after the well control issue. We honestly hope that with the support of Oil India Limited, we can unlock substantial value for all stakeholders in the block. G&G review of the data of newly drilled wells with the data of old wells authenticate the potential of the field already communicated by GTA.
We have received responses to the expression of interest for a 2,000 horsepower rig as well as 1,000 horsepower rig. We will finalize the drilling rigs to progress further. For the Dirok field, the revised field development plan has been approved, enabling an extension of the block. We plan to drill a well in North Dirok targeting the Barail formation. Based on the responses to the expression of interest for a 2,000 horsepower rig, we will finalize the drilling contract upon receipt of the formal extension letter from the Government of India.
Dirok gas sales for the current quarter is 13 million standard cubic feet per day, while the offtake in the previous quarter was 14 million standard cubic feet per day. Accordingly, sales volume of the current quarter is 0.31 Bcf compared to 0.34 Bcf in the previous quarter for our share.
Condensate production is 5,614 barrels compared to 5,858 barrels in the previous quarter. Price realized in the current quarter is $7.32 per MMBtu compared to $7.8 in the previous quarter. While the field with an existing wells has the capacity to produce up to 45 million standard cubic feet per day, production has been constrained due to limited demand. It can be seen that IGGL has hooked up the connection up to Numaligarh from Guwahati and commissioned it.
It is to note that mechanical completion of the DNPL line also has been completed. Now the connection of DNPL line with the IGGL line is yet to be completed, expected by end of March 2026. Good progress has been made. We are closely watching the development to augment our capacity to meet the increase in demand. We hope that the increase in offtake will occur before the end of the fourth quarter of the current financial year ending 31st March 2026 or early first quarter of ’26-’27.
We anticipate the grid to be operational within financial year ’26, ’27, we will augment our capacity by drilling in North Dirok and by drilling three more development wells in Dirok. This will enable us to increase the sales volume to meet the rising demand by connecting the Northeast gas grid to the national gas grid.
Block AA-ONHP 2017/19, which we refer to as Block 19 is an area adjacent to Dirok, known as the Greater Dirok and is analogous to the Dirok structure. We have received the environmental clearance. We have also secured two-year extension effective December 2025 to drill two additional — to drill exploration wells.
Regarding the Umatara Block, we have 10% participating interest in this block where IOCL is the operator holding 90% participating interest. IOCL has started drilling the first development well and has drilled up to 4,300 meters and tested, needs stimulation, and this will be after completing the second well. We endeavor to complete our drilling in the Northeast within two years to commercialize the discovered resources to meet the increased demand on completion of the Eastern gas grid.
Moving to our Cambay blocks, we have drilled two wells in North Balol. One well flowed oil in Balol Pay, which will be put on production. And the second well is planned to sidetrack for Babaguru formation. With this, we will have four wells on production from North Balol. We plan to drill two wells in Asjol. We also expect to receive final clearance for the ring-fenced production sharing contract along with the extension of the Palej block.
Following the extension, we will install SRP in existing wells and drill additional wells in Palej. These activities are expected to enhance the value across the Cambay assets. Overall, production from the Cambay wells remained stable at 0.32 MMSCFD of gas in quarter three financial year ’26 compared with 0.33 MMSCFD in quarter two.
Now I’ll speak about our offshore blocks in Cauvery and Mumbai High. Coming to the Mumbai offshore blocks, in case of B-15, the G&G review and preparation of the development plan is in progress. Given the water depth of about 40 meters, we should be able to put the field on production within about two years. In Block B-80, we hold 100% participating interest. Production in the current quarter is 45,742 barrels of oil and 0.4 Bcf of gas compared to 31,468 barrels of oil and 0.23 Bcf of gas in the previous quarter.
During this quarter, the average gas price realized is $10.5 per MMBtu compared to $10.62 in the previous quarter. Our plan to work over the D1 well continues and plan for drilling additional three wells in progress, which we will start after the forthcoming monsoon. And we have sold about 417,000 barrels of crude oil to HPCL in accordance with the crude offtake and sales agreement, title and risk transfer and incurable interest transferred to HPCL at the offshore delivery point on 25th September 2025.
Nearly three weeks after taking the custody of the crude, HPCL raised a concern regarding the contamination. While the COSA does not include any warranty or representation regarding the crude quality, and therefore, there is no basis for any claim or cost on us, and we are actively pursuing all available avenues to realize the outstanding dues from HPCL.
Cauvery offshore block based on the study by Petrovietnam, we proposed drilling two infill wells, one appraisal well through the existing platform and one exploration well outside the platform. The project remains economically attractive even at the PPAC pricing, given the minimal incremental capital requirement and the availability of substantial unrecovered costs.
Moving to the quarterly results. Our EBITDA for the current quarter is INR31 crores in the consol accounts compared to INR25 crores in the previous quarter. We remain committed to drilling a total of 18 shallow wells and three deep wells in Kharsang, four wells in Dirok, two wells in Greater Dirok and two wells in each in Asjol and Palej in our onshore assets.
To unlock the potential of our offshore fields, we plan to drill 10 offshore wells, three wells in PY-1, three wells in B-80 and four wells in B-15. Timing would change, but it is our endeavor to complete the drilling to unlock the value of all our assets. HOEC’s reserves and resource potential are estimated about 100 million barrels of oil equivalent for its share. These resources can be developed in a cost-effective manner, offering substantial value creation for all stakeholders.
We remain confident in our ability to navigate temporary challenges and committed to progressing our drilling program and monetizing the discovered resources and — reserves and resources.
Now I will now hand over to Senthil, our CFO, to take you through the financial results in detail.
N. S. Senthilnathan — Chief Financial Officer
Thanks, Mr. Jeeva. Good morning all. Stand-alone revenue for this quarter is INR77.32 crores compared to INR321.51 crores in the previous quarter, which includes crude oil sale of INR258.78 crores from B-80. Revenue from gas sales from B-80 for the current quarter is INR40.22 crores compared to INR22.94 crores in the previous quarter.
Current quarter revenue increase in B-80 is mainly due to continuous production of gas, which is 401 MMSCF in this quarter compared to 229 MMSCF in the previous quarter, which was impacted by monsoon disruptions. In the case of Dirok, revenue for the current quarter is INR23.78 crores compared to INR26.57 crores in the previous quarter.
During this quarter, 314 MMSCF of gas was sold compared to 339 MMSCF of gas sold in the previous quarter. Similarly, 5,614 barrels of oil was sold in this quarter compared to 5,858 barrels of oil sold in the previous quarter. The decrease in revenue is mainly due to less offtake from gas customers and margin reduction in selling prices.
In stand-alone accounts, the field operating expenses for this quarter is INR60.34 crores compared to INR46.51 crores. Statutory levies are INR12.44 crores for the current quarter compared to INR10.6 crores in the previous quarter. Similarly, total cost without stock adjustment in the current quarter is INR87.7 crores compared to INR71.5 crores in the previous quarter. The increase in expenses is mainly due to increase in production in B-80 field.
Standalone EBITDA for the current quarter is INR23.89 crores compared to INR28.81 crores in the previous quarter. Profit after tax for the current quarter is INR11.96 crores compared to INR19.04 crores in the previous quarter. In consolidated accounts, the revenue from operations for this quarter is INR81.04 crores compared to INR64.53 crores, excluding crude oil sales in the previous quarter.
Total expenses without stock adjustment in the consolidated accounts for the current quarter is INR94.32 crores compared to INR85.95 crores in the previous quarter. In consol accounts, EBITDA for this quarter is INR30.99 crores compared to INR25.15 crores in the previous quarter.
Consolidated profit after tax for the current quarter is INR8.28 crores compared to INR2.83 crores in the previous quarter. India Ratings have reaffirmed the rating IND A for INR500 crores bank loan. With the internal accrual and continued production and with the borrowings for capital expenditure as required, we will meet all our obligations.
Thanks, and back to Mr. Jeeva.
R. Jeevanandam — Managing Director
Thanks, Senthil. We can now open the forum for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] We have the first question from the line of Gautam Rajesh from Leo Capital. Please go ahead.
Gautam Rajesh
Hi sir. Good morning. Thank you for the opportunity. My question is what is the exact status of the Northeast grid connectivity for Dirok? The PPT basically mentions that the mechanical work is done. What all is pending here sir between now and when the connectivity happens?
R. Jeevanandam
So, yeah, we understand from the people whom we have talked to them that one, as I told you in the last quarter itself, they have connected the Guwahati to Numaligarh. Now from Duliajan to Numaligarh, that is a DNPL existing line, they need to — have 50 kilometers line has to be repaired and that mechanical completion has been fully completed in a way that the line is ready to be connected to the IGGL line at Numaligarh. For that, they may look for some shutdown of the refinery for some days.
Once that is done, then the line would get connected. That will immediately augment the — so in a manner that as at the moment, it is established from the outside gas can come up to Numaligarh. Now the gas from Duliajan to move out of Assam, that could be possible once this connection is made. That is a shorter duration work. We expect it should get completed by March and the augmentation of the offtakes should take place at least by the first quarter of the next year.
Gautam Rajesh
Understood. That will be it from my side.
Operator
Gautam, do you have any further questions?
Gautam Rajesh
No, no, that is it from my end. Thank you so much.
Operator
Thank you We will take the next question from the line of Harshit Khadka from RoboCapital. Please go ahead.
Harshit Khadka
Thank you for the opportunity sir. As per our internal budgets or estimates, what can be the net production for FY ’27 and ’28 and the debt level for the same period?
R. Jeevanandam
’27, ’28 would be the — we are depending on the Northeast grid line connected. And that will increase our production by at least another threefold increase. That’s what we believe. So then we don’t intend to borrow anything for onshore developments. So that would be the immediate low-hanging fruit, which we can go for it.
Harshit Khadka
Okay. And sir, can we expect Dirok to go to 45 MMSCFD from Q1 FY ’27 itself and this additional gas offtake will be consumed by which customer?
R. Jeevanandam
It will get into the grid. Once it gets into the grid, then it is on the — anybody can consume. There is no regular customer request for you, which can — you can enter into any long-term arrangement, short-term arrangement, whatever it is. The gas supply will go up to the — up to [indecipherable], right?
Harshit Khadka
Alright. Thank you.
Operator
Thank you. We have the next question from the line of Dhruv Rawani from Shreeji Finserv LLP. Please go ahead.
Dhruv Rawani
Sir, can you give me some timelines on the workover well for B-80?
R. Jeevanandam
I think we are supposed to do it, but by all probabilities, we should be able to immediately after the monsoon.
Dhruv Rawani
So the — what was supposed to happen in Feb will now happen in post monsoon?
R. Jeevanandam
Yeah, I think we are trying to do that before 15th of May. But by almost likely, it will be happen after the monsoon.
Dhruv Rawani
So any specific reason that we are unable to source the rig or any further technical challenges?
R. Jeevanandam
Not only source a rig and there is an onshore activities are going in a full swing in Eastern region because as we are speaking, we are drilling on the wells in Kharsang. And some resource constraints because we have to get the money from HPCL. So, with this resource constraints, I think we will be able to do it in the — after the monsoon would be sure. And before the monsoon, it’s little doubt.
Dhruv Rawani
Okay. And are we on track for the PY-1 well which you were supposed to start in April?
R. Jeevanandam
PY-1, well, we can go up to still October. There should not be any problem of drilling. And our people are trying to get the rig at the lowest possible rates. They are trying to do whatever the best they can do to start the drilling at the earliest. As I told you, the offshore campaign is a little getting delayed because of the impact of the revenue.
Dhruv Rawani
Okay, revenue regularization. Thank you. That’s it from my side.
Operator
Thank you. We have the next question from the line of Sucrit D. Patil from Eyesight Fintrade Private Limited. Please go ahead.
Sucrit D. Patil
Good afternoon to the team. I have two forward-looking questions. My first question is, beyond the production guidance, how will Hindustan Oil manage risk and uncertainty in the B-80 field and the Dirok Phase II development? Particularly around reservoir performance, regulatory approvals and execution timelines, what frameworks will ensure resilience if outputs or approvals don’t move as planned? Just want to understand your point of view on this. Thank you.
R. Jeevanandam
Okay. So, two questions you raised. One is about the uncertainty, another one is about the risk. So, we don’t find any uncertainty in these events. So, risk is akin to the oil and gas business, which is below the subsurface and that is the only risk. And the risk is more mitigated by already drilled a number of wells. So Dirok, we don’t have any uncertainty on — we don’t have any risk as expected. And the risk is much limited.
And similarly, in B-80 also, there is no problem on the reserves. There is no problem on the reservoir. And at the moment, the government of India is pushing for drilling maximum number of wells. There would not be any constraint from the Government of India to getting the approvals. So, as usual, some small delays here and there will take place. That won’t impact the operations to drill the wells as well as put it on production.
Sucrit D. Patil
Thank you and best wishes.
Operator
Thank you. We will take the next question from the line of Sabri Hazarika from Emkay Global Financial Services. Please go ahead.
Sabri Hazarika
Yeah, good morning. So, first question is on Dirok. So, how much production you expect it to go up to once this Northeast Gas Grid-DNPL connectivity happens?
R. Jeevanandam
I think we can go to the full potential, which is about 40 million to 45 million cubic feet per day.
Sabri Hazarika
And currently, what is the production?
R. Jeevanandam
13.
Sabri Hazarika
13, right. So this DNPL will have enough capacity to take care of your growth as well as Oil India’s own increase, right?
R. Jeevanandam
This will be about additional minimum about 1 million to 1.25 million cubic meters per day that itself is about, say, 35 million to 45 million. So even our volume additional is — assume it another 30 million, the balance is still available for additional production from Oil India. I think this will at least give us some stability and improved offtake.
Sabri Hazarika
Right. And your I think one pipeline from your fields to the Duliajan gathering station that has been done?
R. Jeevanandam
30% has already been completed. That has been hooked up for the production, moved up to the Oil India line. And the balance line is in progress, but that is not going to hamper our 45 million by any means.
Sabri Hazarika
Okay. So, the evacuation of 45 million up to Duliajan is ready from your side?
R. Jeevanandam
Even if it is tomorrow, it’s ready.
Sabri Hazarika
Okay. And you mentioned that March end, this hookup is March end or probably Q1 of FY ’27, this hookup is expected. So this is subject to — I mean, it’s just a technical hookup? Or is there some — I mean, from Oil India, we have come to know that there’s some PNGRB approval also which is required to make it a common carrier or something of that sort. But if that doesn’t come, then also this technical hookup can happen? Or would the things should happen simultaneously?
R. Jeevanandam
The PNGRB will give a clearance once it is fully hooked up.
Sabri Hazarika
Okay. Once — first, the hookup will happen, then the PNGRB clearance will come, right?
R. Jeevanandam
Right.
Sabri Hazarika
Okay. And for that, NRL will have to take a shutdown also for this hook up to happen?
R. Jeevanandam
That’s right, that should not be more than about a week.
Sabri Hazarika
Right. And B-80, right now, what is the guidance? Are you like giving a target in terms of increase in production? Or are we at this range only and trying to like reduce the impact.
R. Jeevanandam
It will be in this range only till the workover is completed.
Sabri Hazarika
Okay. Those two, three wells, which you are planning after that, there will be an increase in production. Is that right?
R. Jeevanandam
Workover may improve. But till the time — till all the three wells are drilled, it will be on the similar line.
Sabri Hazarika
Okay. Got it. And last question. So what’s the assessment for Kharsang? You have 35% stake right now, correct?
R. Jeevanandam
Yes.
Sabri Hazarika
Okay. And what is — you mentioned that you’ve got the environmental approval. I mean, eight wells you have already drilled, right? And they’ve been put into production or they are being tested right now?
R. Jeevanandam
You could listen to me that around five wells are already on production. And the other two wells, along with the sixth well is completed as a gas well. And it is on the same plinth. Two rigs cannot work simultaneously. So the two completed wells are to be perforated. And this will happen along with the third well completion. So which we are expecting by the end of this month or 15 — by all probability, by 15th of March, we will be able to hook it up.
Sabri Hazarika
And do you have a planned production plan for next, say two years, how do you see the production of Kharsang, both oil as well as gas?
R. Jeevanandam
This is actually a field which is having — see, the 28 wells are already on production, which are all depleted, which are all on the old legacy wells. These nine wells are the new wells. And we are expecting the new wells can produce better, and the old wells needs to work over. The production plan per se is about targeting about 1,000-plus barrels with the existing well.
Sabri Hazarika
Right. And is there any pricing upside to it in terms of new wells gas? Or how would the pricing be for this incremental gas which is coming?
R. Jeevanandam
Yes, I think we have the Government of India as a policy, but it’s all subject to the demand, right?
Sabri Hazarika
Okay. Only if it is like sent to sectors like CGD and all, you will get that premium pricing. Is that right? Otherwise, it is like classified as a stranded gas. So maybe like it’s like at that APM rate only. Is that right, right now?
R. Jeevanandam
It has to be, now — the grid connectivity comes, it is no longer standard. So then you will be looking for all the price, the premium thereon.
Sabri Hazarika
Okay. Fair enough. And just one last question.
Operator
Sorry to interrupt, Mr. Sabri. I would request you to rejoin the queue.
Sabri Hazarika
Yeah. Yeah. Thanks. And all the best.
Operator
[Operator Instructions] will take the next question from the line of Mehul Panjwani from 40 Cents. Please go ahead.
Mehul Panjwani
Hello sir. Thank you so much for the opportunity. Sir, what is the update on the PY-3 arbitration?
R. Jeevanandam
So it is — the tribunal has been constituted. Now the tribunal will be deciding on that, seat and venue. And after that, they will get on to the substance of the matter.
Mehul Panjwani
Sir, what is the timeline for this? Any idea?
R. Jeevanandam
Arbitration, what timeline I can give you. It is up to the — tribunal can give you the timeline.
Mehul Panjwani
Right. Okay. Okay, sir. And sir, how many days was B-80 operational in this quarter, sir?
R. Jeevanandam
This quarter, almost 90 days we have been operating, except one or two days, it is about 89 days, right?
Mehul Panjwani
Okay. And sir, this HPCL issue, what they have mentioned that they have found contamination that was expected to be resolved — get resolved in the last quarter itself. So, why is it such an overhang, I mean if it’s such a trivial issue?
R. Jeevanandam
We have been requesting and we continue to request and we hope some resolutions will come, because our substantial money get blocked. So we wanted to have an early resolution, and we have been doing all the best possible efforts and trying to talk to our people, talk to HPCL. That’s the status now.
Mehul Panjwani
How much funds are pending on this one?
R. Jeevanandam
INR259 crores plus interest.
Mehul Panjwani
Okay sir. Thank you so much. I’ll come back.
Operator
Thank you. We have the next question from the line of Amit Mehendale from RoboCapital. Please go ahead.
Amit Mehendale
Hi, thanks for the opportunity. So, my first question is on the production, net production. So, if you were to move to, say, from our current levels of 2,500, 3,000 barrels [Phonetic] to say 6,000 level, what is the by field net production that we’re estimating. Can you please get numbers like Kharsang, B-80 that way split of 6,000?
R. Jeevanandam
No, I think we are waiting for the — I’ve already told to Kharsang, we will be a ramp up of 2,000 barrels. And Dirok should go about to 3 times of the current production. These are the two immediate things, and smaller volume can come out from the Cambay. And we cannot choose the exact numbers as such, we will be wrong.
Amit Mehendale
Sir, if I look at the math because that way, Dirok will add only 600 incremental. I mean, Dirok will become essentially, yes, about 600 barrels and Kharsang, so most…
R. Jeevanandam
Your math is wrong, you can recheck the numbers. Your math is wrong, you can recheck.
Amit Mehendale
We’re doing 237, right, or 250 for Dirok. So we’ll go to 750.
R. Jeevanandam
Okay. Now there are how much is — so you have to convert into the gas into oil, right? You do that, it will be a much better number.
Amit Mehendale
Okay, understood. And my second question is, sir, on the transition part. So what is the path there? And do you wish to hold your personal equity in the company going forward?
R. Jeevanandam
So that’s a personal equity remains with a company like any other investment, okay? And now I think the NR committee and the Board is looking for the new CEO, which you will get an announcement shortly on that.
Amit Mehendale
Right. So, how long do you plan to stay with the company? I mean, any color on the transition that will be helpful.
R. Jeevanandam
Change is the law of life. Change is the law of life, right?
Amit Mehendale
Right?
R. Jeevanandam
Constant is the change, [indecipherable] peaceful at home.
Amit Mehendale
Yeah, true. Sir, last question on the EBITDA margins, maybe for ’27, ’28. Broadly, what type of — in percentage term, what type of margins do we expect?
R. Jeevanandam
It would be somewhere around 60%.
Amit Mehendale
Okay, sir, great. Thanks a lot.
Operator
Thank you. We will take the next question from the line of Riddhesh Gandhi from Discover Capital. Please go ahead.
Riddhesh Gandhi
Hi sir. I just want to understand when we have initially spoken about doing incremental actually well after the pipeline was actually up and running. Just wanted to understand the reason why we are already starting to do it despite — we were earlier expecting this pipeline to be completed in the middle of last year, then the end of this year, then early this year. And we have even talked about, I mean, March and April actually now, given we’ve got a limited resource, I just wanted to understand the logic of actually starting it given that delays appear to be actually indefinite there.
R. Jeevanandam
It’s not the work carried out by us. It is carried out by the government companies and they are the one running the — they are the ones…
Riddhesh Gandhi
No, no, no, incremental. I’m thinking — I think the incremental wells, which we are like we are exploring. Just — I thought that like logic was we will start the additional exploration only after the pipeline is complete, given the completion of the pipeline isn’t in our hands.
R. Jeevanandam
As you say that, we are constantly drilling one well per month on an average, and that progress will continue on it. Kharsang drilling is going on it, and we are looking for the rig to drill the North Dirok. I mean Dirok extension is pending with the Government of India, which we get at the earliest. Once the extension comes, then we have to start the drilling of the North Dirok and that is about — and Cambay, we have drilled two wells in North Balol, and we are waiting for the extension of the Palej and as well as ring-fenced RFC [Phonetic] from the Government of India. Once the extension comes, then we can ask our partners to put the money and we can start drilling.
Riddhesh Gandhi
Okay. Sir, and if you could sort of explain the HPCL issues slightly in the detail because it’s slightly strange that they will take the oil without actually testing it. And then given that they’ve actually made a large release, the refinery was closed down and on the conference call also sort of indicated it was all linked to our oil. Just if you could give us a little bit incremental granularity on what the issue is, how the resolution is expected and the exact status right now? Because obviously, it’s going to impact our future capex? And is there any risk of this happening with other oil which is produced in the B-80?
R. Jeevanandam
So, one thing is that there is no risk associated with the production of any oil for many of our fields. That is the first thing. Second thing, normally, we sell the oil on an FOB basis. You’re fully aware FOB basis means the risk and — the risk, insurable interest and the title transfer to the buyer. It is not with the seller. The buyer takes the delivery of the crude and putting into the tanker and then blending it with the other crudes and then using into the refinery. And that’s what has happened in this case.
So we are requesting this all happening after the transfer of the title. So as far as we are concerned, the sale is fully completed. And the amount is due to us. They are saying your oil is having some contamination. But we do not know, we are not responsible for those contamination, if any, or anything, anywhere, it happened.
So we are open and transparent, and we have told them, these are the oil we are going to sell. And that accordingly, we transfer to the tanker, which has gone and taken by them and blended by them and refined by them. Now we are requesting them kindly release our payment. Our request will continue to be with HPCL. That’s all from our side.
Riddhesh Gandhi
And have you taken any legal action against them?
R. Jeevanandam
Actually, that is — so whatever the legally, they’re asking me are replying on legal manner, that’s all. And we are wanted to have amicable resolution on this. And if that happens, it is well and good. If nothing happens, then that is the last reserve, right?
Riddhesh Gandhi
Got it. And then typically, how long do these things legally take? Suppose it goes down the legal route, how long does it take?
R. Jeevanandam
Three to four months. In the course of any arbitration on this should be dealt within a period of four months.
Riddhesh Gandhi
Got it. But we’ve not started with the arbitration.
R. Jeevanandam
No, no. We have no intention of doing anything on this thing. We want an amicable settlement. They are after all our big brother. We have to deal with them in the subsequent period also. We don’t want to be in a litigation mode in life.
Riddhesh Gandhi
Got it, sir. And so we are hopeful. It’s close to being resolved.
R. Jeevanandam
I think we hope and we pray for that.
Riddhesh Gandhi
Okay. And on the Kharsang, if you could expand on the potential we have from Kharsang and how we’re looking at the opportunity there?
R. Jeevanandam
So, Kharsang, you see there is a well-controlled issue on one of the well drilled, and that means the potential of the gas is substantially enough to connect to the grid line. So Oil India is investing to drill additional number of — more number of wells. So we will be in a continuous mode of drilling there, and the deeper prospects also. And this will unlock substantial value of the block.
That’s what we believe in. And every well would be adding at least about 100 barrels per day additional production. And if the gas — we are expecting even by perforating the shallower part of the existing wells and some other one or two new wells, we can go up to a minimum of 10 million cubic feet per day.
Riddhesh Gandhi
Got it. Thanks. That’s all from me. Thanks.
Operator
Thank you. We will take the next question from the line of Rajiv Agrawal from Sterling Capital. Please go ahead.
Rajiv Agarwal
Thank you for the opportunity. Some data questions, sir, what is the conversion factor you use to convert gas into equivalent barrels of oil? That is my first question. And my second question.
R. Jeevanandam
First question, can I answer before you ask the second question? 6000 standard cubic feet is roughly equivalent to 1 barrel of oil. Okay? Now second question?
Rajiv Agarwal
Second question sir, if I see the consolidated P&L, sir, this revenue has declined from the last year, from INR156 crores to INR81 crores. So I just want to understand what is happening there?
R. Jeevanandam
This is mainly due to the reduction on the Dirok offtake as well as the B-80. Both were not performing as expected.
Rajiv Agarwal
Okay. Okay. Thank you.
Operator
Thank you. We will take the next question from the line of Nirbhay Mahawar from N Square Capital. Please go ahead.
Nirbhay Mahawar
What is the net debt or cash in the book?
R. Jeevanandam
INR55 crores as on date.
Nirbhay Mahawar
INR55 crore debt or cash?
R. Jeevanandam
INR55 crore debt and the cash is about INR30 crores cash is there.
Nirbhay Mahawar
And would it be fair to assume, based on current expectation that Dirok production next financial year would be at least double of this year? Would it be fair to assume?
R. Jeevanandam
We expect triple of this year. For next financial year, FY ’27. So we would be expecting around 40,000 MMBTU daily production. That’s right.
Nirbhay Mahawar
Okay, thanks.
Operator
Thank you. We will take the next question from the line of Anubhav Goel from Cosma Ventures. Please go ahead.
Anubhav Goel
Sir, if I heard you right, if the HPCL issue is not resolved in the next three to six months, and we don’t get the money, then we would mostly delay the drilling for PY-1 and B-80 post monsoon?
R. Jeevanandam
I think, see, once the money is get, then you have to look at other options of raising funds, right?
Anubhav Goel
Right, sir. Right. So sir, the October timeline you mentioned for PY-1, that is independent of the HPCL issue?
R. Jeevanandam
That is independent of the HPCL issue. We are trying all possible — see, once an issue is there for a substantial blockage of the revenue, and every day you look at actually, you may realize it. Now we come to your state when you can’t realize it will take more time, then at that point in time, you have to look for alternative source of funding, right?
Anubhav Goel
Then this would mean you would take on more debt? Or are we more open to equity as well?
R. Jeevanandam
We will talk to the board to have a look at it, and both options are open at the moment.
Anubhav Goel
And sir. You mentioned the new CEO, do we expect him or her to come within the next three to six months?
R. Jeevanandam
I think much earlier than that, I hope.
Anubhav Goel
All right.
Operator
Thank you. We will take the next question from the line of Prashant Daya [Phonetic] an Individual Investor. Please go ahead.
Prashant Daya
Yes, sir. First question. I wanted to understand on the HPCL issue in the current scheme of things, how much does it delay our plans? And secondly, do we also have — what is the amount of fuel do we have on the floating storage vessel? I mean, is there an opportunity to sell more? That’s one.
R. Jeevanandam
Yeah. I don’t think we have got an immediate option to sell anything on store, but it’s — that’s ruled out and overall, in my opinion, it should — I may be wrong, it should be much earlier. But it will delay the whole process by about four to six months.
Prashant Daya
Yeah. Okay. And sir, second question is on B15. I mean we had spoken about a year back that once Discovery would add that it will take about two years for us to start realizing. Now given that we have 100% participating interest in this, and it’s a shallow field etc., and there are already some wells there. I mean, are we more aggressive? What is the — what is our — because this could be a significant revenue changers for the company in the mid to long run. So where are we with the development plans and environmental clearances etc.?
R. Jeevanandam
I think we are already waiting for the mining lease once, that is expected shortly. Once the mining lease comes and we will — our people are already working on the development plan, that will be given to the Government of India for approval. After that, we will start placing orders for the materials and things required in a slow and steady manner. So, in a manner that we will be able to put the field on production within about two years from the submission of the development plan.
Prashant Daya
Sir, overall, are you happy with the — as management, are you happy with the last couple of quarters, production and the basins are going. Clearly, the stock is almost 50% down from a year ago. So what is your like management view in terms of development, all the field and the progress that was committed versus what is actually happening on the ground?
R. Jeevanandam
So, I’m not happy about it. That is — that’s for sure. So, one is even because you are able to produce, you are not able to sell. And second thing, you are continuing with the capital commitments and the B-80 is not performing as expected. These are the more of an issue — the surface issues, which has to be resolved. Until the resolution comes, some of the things are not within our hands to do it. So until all these things are getting resolved, we are not able to achieve what we are expecting. There are gaps, and these are the gaps are getting filled up now. So we will be able to do much better once the grid connectivity comes into play.
Prashant Daya
Thank you for the transparency sir. All the best.
Operator
Thank you. We will take the next question from the line of Manan Patel [Phonetic], an individual investor. Please go ahead.
Manan Patel
Am I audible?
R. Jeevanandam
Yes, Manan.
Manan Patel
Hello. Good morning sir. Sir, first question is regarding the — just wanted to understand the accounting because if I see the difference between standalone and consol, the revenue is just INR4 crores. While I understand Kharsang and the subsidiaries like Hindage and all those comes is consolidated apart from standalone. So, I would have assumed that revenue in standalone would be much higher than just INR4 crores. So can you throw some light on that?
R. Jeevanandam
I think, Manan, clearly, I’ve seen what is happening is they are asking us to hit it off some of those, that might be the one of the issue for it. And you can send me that question, so I can — because off the cuff, I’m not able to answer to you clearly. I will — you can give me a call and I’ll go through the numbers and explain to you.
Manan Patel
Okay. Okay, sir. And sir, second question on Kharsang. So you mentioned 1,000-plus barrels. So, is that only oil or that is including gas? Because you said gas…
R. Jeevanandam
It’s just oil. It’s oil.
Manan Patel
Okay. Okay. So, once gas connectivity is there, you can produce a lot better in Kharsang as well, right?
R. Jeevanandam
That’s right.
Manan Patel
Okay. Thanks a lot sir. I’ll get in touch with you.
R. Jeevanandam
Thanks Manan.
Operator
Thank you. We have the next follow-up question from the line of Mehul Panjwani from 40 Cents. Please go ahead.
Mehul Panjwani
Hello sir. Thank you so much for all the responses. Sir, one update, which I missed out is maybe I was not there in the commentary, so can you please brief on the new CEO and changes in the management?
R. Jeevanandam
I think the NRC, what we call the Nomination Remuneration Committee and the Board is discussing with the people, and they will come out with the new CEO, we will announce it actually.
Mehul Panjwani
Sir, are you taking a different position at the executive level or are you [indecipherable].
R. Jeevanandam
I won’t be in any executive position.
Mehul Panjwani
Sir, you are leaving your position, is it?
R. Jeevanandam
Yes, I will not be in this position.
Mehul Panjwani
But sir, there has not been any update to the stock exchanges. Has this been announced only in the — during the call today or…?
R. Jeevanandam
No, it has been already announced in the exchange a long time ago, Jan 22.
Mehul Panjwani
Okay. So how long will you be able to continue?
R. Jeevanandam
Until the new CEO comes. This is very clear in the message actually to the stock exchange.
Mehul Panjwani
Okay. Sorry, sir, I have no doubt [Phonetic]. And sir, about the B-80, as you
R. Jeevanandam
See that what we are struggling with that we need to have a workover of the well, and that is getting delayed. Once the workover is done, the D1 well will do much better. And the D2 well, as usual, meet the zone transition. And both the things we could do it, and it will be doing much better than what we expect — what is currently. What — so can you elaborate on zone transition.
Operator
Sorry to interrupt, Mehul. I would request you to rejoin the queue again.
Mehul Panjwani
No, this is just a follow up question on the…
R. Jeevanandam
Okay. Next question.
Operator
We have the next follow-up question from the line of Anubhav Goel from Cosma Ventures. Please go ahead.
Anubhav Goel
So the approval now for the next nine wells for Kharsang, you mentioned we have to take partner’s approval. Any color you can provide on this?
R. Jeevanandam
So we have — we are ready to drill the wells, but we are only 35%. The balance 65% approval is expected. As we speak, we have already circulated trading the approval for the nine wells, are immediately on six wells and then followed by another three wells a little later. But the budget is proposed for the nine wells and one deeper well.
Anubhav Goel
So this is something we have recently submitted to the partner?
R. Jeevanandam
So, it has been in discussion, and we have to finalize a location. After finalizing the location, we have submitted to the partners.
Operator
Thank you. We have the next question from the line of Riddhesh Gandhi from Discover Capital. Please go ahead.
Riddhesh Gandhi
Hi sir. You indicated that you needed an extension on Assam. Just wanted to understand, is there — is this just procedural? Or is there any risk attached to it? Or how should we be looking at that?
R. Jeevanandam
There is no risk attached. It has been already approved by DGH. It is in the regular procedural issue at the ministry. Nothing else.
Riddhesh Gandhi
Got it. Okay. And this will happen after the pipeline or it’s independent of when the pipeline happens?
R. Jeevanandam
This has nothing to do with the pipeline or anything. It is just a procedural thing and which we have been pursuing with the ministry. It may be expected any moment.
Riddhesh Gandhi
Okay, sir, thank you. That’s all for me. Thanks.
Operator
We have the next follow-up question from the line of Mehul Panjwani from 40 cents. Please go ahead.
Mehul Panjwani
Thank you so much for the follow up opportunity. Sir, you were saying something about the zone transition, if you can elaborate, it will be helpful for D2.
R. Jeevanandam
What has happened was in D2 well, we have perforated the gas zones. Now there are other three zones on the top. Once the gas zone started depleting on that, then we have to perforate on the top zones, which will also produce oil and gas, right? So this will be normally being done during the workover.
Mehul Panjwani
And sir, we expect to finish all the work over by October 2026, is it?
R. Jeevanandam
I think if we are not able to do anything on this season, then the next season starts end of October, from October to April, we can do that work.
Mehul Panjwani
Right, sir. And sir, then I heard you about the Dirok offtake that it can be the triple of what we are doing right now. So what would be the timeline we can expect on that one?
R. Jeevanandam
Yes, we are ready with the six-well production, and that six well can be five wells and the sixth can be hooked up for production. Once the line — once there is a demand excess, right? Now the demand will increase only when the grid connectivity is over. So which will be on a day’s job, right? So the demand is there. It is a day’s job.
Mehul Panjwani
Okay. So as soon as the demand is there, we are kind of ready for the offtake? Right, sir. Okay. Thank you so much, sir.
R. Jeevanandam
Thank you. Thanks a lot.
Operator
Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Jeevanandam for closing comments.
R. Jeevanandam
Thank you all for joining this call. Our onshore drilling program is progressing well, and we intend to maintain this momentum as we work to unlock the full value of our onshore assets. We will commence our offshore drilling campaign once the temporary operational issues are resolved. Given the substantial underlying resource potential, these short-term challenges do not diminish our long-term value creation outlook. Thank you.
Operator
[Operator Closing Remarks]