Hindustan Oil Exploration Company Limited (HINDOILEXP) Q3 FY23 Earnings Concall Transcript

Hindustan Oil Exploration Company Limited (NSE:HINDOILEXP) Q3 FY23 Earnings Concall dated Feb. 20, 2023.

Corporate Participants:

Elango Pandarinathan — Managing Director

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

Analysts:

Anuj Sonpal — Valorem Advisors — Analyst

Rohith Potti — Marshmallow Capital — Analyst

Hardik Shah — Taurus Mutual Fund — Analyst

Dhwanil Desai — Turtle Capital — Analyst

Riddhesh Gandhi — Discovery Capital — Analyst

Rohit Suresh — Samatva Investments — Analyst

Tejas Shah — Unique Stock Broking — Analyst

Manan Patel — Airavat Capital — Analyst

Hitesh Doshi — Nirzar Securities — Analyst

Maulik Patel — Equirus Securities — Analyst

Rikesh Parikh — Rockstud Capital — Analyst

Ravi Sundaram — Sundaram Family Investment — Analyst

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

Gaurav Shah — Harshad Gandhi Securities — Analyst

Sunil Nagpal — Lotus Investments — Analyst

Rahul Shah — — Analyst

Parthraj Gohil — — Analyst

Vivek Joshi — — Analyst

Jungoo Fitter — — Analyst

Uday Vernekar — — Analyst

Karan Mehta — — Analyst

Vasu — — Analyst

Jayesh Gandhi — Harshad H Gandhi Securities Private Limited — Analyst

Presentation:

Operator

Gentlemen, good day and welcome to the Q3 FY ’23 Earnings Conference Call of Hindustan Oil Exploration Company Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you and over to you Mr. Anuj Sonpal.

Anuj Sonpal — Valorem Advisors — Analyst

Thank you. Good morning, everybody and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of HOEC Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the third quarter and nine months ended of financial year 2023.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. 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 and hand it over to them for opening remarks. We have with us Mr. P. Elango, Managing Director; and Mr. R. Jeevanandam, Whole Time Director and Chief Financial Officer.

Without any further delay, I request Mr. Elango to start with his opening remarks. Thank you, and over to you, sir.

Elango Pandarinathan — Managing Director

Thank you, Anuj. Good morning, all. Thanks for joining. I hope everyone has received the updated earnings presentation. We’ve also uploaded it on 14th February on our website for your reference. Our apologies for the delay in holding this call.

I’m pleased to say that after successfully dealing with several challenges, we have finally managed to operate both the wells in B-80 field simultaneously. Since December, both the gas and oil wells are on continuous production mode, contributing to about 15% production growth at operated gross production level and 30% growth in net to HOEC level compared to Q2. The issues of top phase facilities are limiting the production of well D1 to produce at its optimum capacity. HP separators is being repaired and any — all other issues if any need to be addressed when the HP separator is put on production by our contractor.

When we flow both the wells through a single separator, there are limitations to the volumes it can handle safely. On continuous basis, our operations team monitor the fluid flow and determine the quantity of oil and gas that can be safely produced. In parallel, while HP separator is being rectified, the possible options to increase the production is being examined with the contractor. Since October, we have executed two critical operations at B-80. One was to repair and replace sections of the under buoy and export hoses and other was pumping sealant to arrest the loss of hydraulic fluid in SSSV line, enabling D1 oil well to be brought online. These rectification works have been executed safely by adopting innovative and cost-effective methods.

As part of monsoon preparation, we have placed orders to change the hoses after carrying out due technical assessment. This hose replacement work will be carried out pre-monsoon and we are closely monitoring the manufacturing progress to expedite the delivery. Oil produced is being continuously transported to FSO for storage and the gas being is sold to GSPC through the ONGC and GAIL pipeline network. When we recommenced gas production in November after rectifying the under buoy hoses, GSPC required more time to tie-up with consumers and was unable took immediately offtake the gas.

To continue the production, we exported the gas into ONGC GAIL pipeline network, while GSPC was working on tying up with — tying up the demand and we expected that to be resolved within few days. However, due to unprecedented gas market conditions prevailing at that time, they could do that only from 16th November. Therefore, 3.78 mm SCM of gas that was supplied into the ONGC GAIL pipeline network remains in the GAIL network. We initially tried for GAIL to redeliver the gas for offtake by GSPC, along with the December volume by offering to pay them the transportation and parking charges. Since that was not feasible, we have now offered the gas for sale to GAIL and the same is under consideration by GAIL. We remain focused on achieving optimum and stable production operations at B-80, as soon as possible by addressing the remaining process equipment-related issues and carrying out permanent replacement of hose system pre-monsoon.

Moving over to Dirok, at Dirok we achieved an average gas sales of 33 million standard cubic feet per day during Q3 against 34 million standard cubic feet per day in Q2 and 25 million standard cubic feet per day in Q1. Dirok gas offtake has seasonal variations, maintenance activity of any major consumer also impacts offtake adversely. The PPAC notified gas price was revised to $8.57 per MMBtu effective October 1, 2022. About 36% of Dirok gas sale was sold by us in Q3 at a minimum price — premium price of $9.57 per MMBtu. Overall in Q3, we achieved record level revenues from Dirok.

For the next phase of development at Dirok, pipeline construction work in the difficult forest segment has commenced and is progressing as planned. This 18-inch pipeline will transport Dirok gas to Duliajan marketing hub independently without relaying on Oil India pipeline network. This will enable connecting with Northeast gas grid in future significantly enhancing the market size for Dirok gas. We are closely monitoring the Dirok gas sales offtake rates at different seasons and at different price points.

We are proactively engaging with multiple stakeholders involved in building the Northeast gas grid to achieve greater demand and consistent offtake. Wells and facilities have demonstrated capacity to deliver nearly 46 million standard cubic feet of gas per day. Depending on the demand, we have the flexibility to execute workover operation to enhance the production capacity further. Both in PY1 and in Kusijan, outstanding issues have been resolved with the government to secure 10-year PSC extension and formal PSC amendment is under process in Ministry of Petroleum and Natural Gas. We are continuing with small volume of gas sales to GAIL from PY1 that was commenced in May 2022.

In Cambay assets, while production operations are continuing, final execution of ring-fenced PSC for R2 area by government is still awaited. Meanwhile, we are progressing the environmental clearance process to undertake a drilling campaign in three marginal fields at Cambay in future.

I now invite Jeeva to share the financials.

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

Thanks, Elango. We report that the company made a total revenue of INR106.37 crores in the current quarter against INR81.69 crores in the previous quarter in the standalone accounts. The consolidated accounts it is INR171.56 crores against INR125.79 crores [Technical Issues].

Operator

Sorry to interrupt you, sir. Sir, your voice is breaking.

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

Is it okay now?

Operator

Yes, sir. Much better. Please continue.

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

We report that the company made a total revenue of INR106.37 crores in the current quarter against INR81.69 crores in the previous quarter in the standalone accounts. In the consol accounts, it is INR171.56 crores against INR125.79 crores in the previous quarter. If we take the revenue for nine months of ’22-’23, it is INR388.39 crores comparing INR123.56 crores in the corresponding previous period. This increase in revenue is mainly due to sale of 45 days of continuous production from B-80 field. This has contributed about INR30.96 crores revenue in the current quarter comparing INR10.34 crores in the previous quarter.

Dirok revenue also increased about INR11.7 crores in the current quarter. In consolidated accounts, about INR45.77 crores increase in the current quarter comparing the previous quarter. This [Technical Issues] both the MOPU and FSO are in revenue mode, which has contributed to the increase in the overall revenue. Standalone profit after tax is INR15.92 crores against INR6.57 crores in the previous quarter. This does not include the 15 days sale of gas which Elango has explained. In nine months accounts it is INR56.7 crores and the corresponding previous period is INR46.71 crores.

In the consolidated accounts, the profit-after-tax is INR37.33 crores against INR17.71 crores in the previous quarter. The nine-month consolidated accounts, it is INR87.39 crores comparing INR47.2 crores from the previous — corresponding previous period. In fact, continuous production from B-80 is inevitable to have an improved and sustained bottom line of the company. The total expenses of all standalone, including the DDA is INR90.45 crores comparing INR75.12 crores in the previous quarter. Crude oil produced and stored is INR16.59 crores, which is reflected in the stock adjustment.

Cost increases associated with the full operating cost of FSO for B-80 field for two months. Other operating expenses are increased due to forex loss and loss mark-to-market about INR5.68 crores and provision towards the Digboi [Phonetic] field, production enhanced contact with oil. The total expenses in consol accounts including DDA is INR124.16 crores comparing INR105.71 crores in the previous quarter. Nine months account, it is INR288.95 crores for ’22-’23 comparing [Technical Issues]. Operating costs accounted for B-80 in consol accounts for ’22-’23 for MOPU and FSO is INR72.54 crores per HOEC shares.

Finance costs and DDA in consol account is INR81.86 crores for nine months comparing INR20.39 crores in the corresponding previous period. The EBITDA in consol accounts for this quarter is INR81.37 crores comparing INR47.7 crores in the previous quarter. Nine monthly accounts for ’22-’23 is INR181.29 crores comparing INR90.4 crores for whole of the previous year. Consequent to the commencement of production from B-80 field with gas well effective November 1 and both the wells from 1st of December, all the assets of B-80, including the subsidiary companies on revenue mode. Most of the operating costs are not linear and are fixed, which leads churning of assets to get better net realizable value to the company.

Continuous production B-80 field and to produce top level on completion of top side repair is inevitable to create value to the investment in B-80 including the assets of wholly-owned subsidiaries. Even with the current level of production and the prices, the company can meet all its obligations. On achieving the optimum protection from B-80, the company will embark on drilling wells in PY1 having secured 10-year extension for the block.

Thanks, Elango.

Elango Pandarinathan — Managing Director

Thank you, Jeeva. Anuj, we can now open the forum for questions.

Questions and Answers:

Operator

Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rohith Potti from Marshmallow Capital. Please go ahead.

Rohith Potti — Marshmallow Capital — Analyst

Thank you for the opportunity, sir and congratulations for bringing B-80 back on track. My first question was on B-80 itself. So, if you see the gross production number in the first slide, we have indicated that we produced around 1,700 barrels last quarter, but in the B-80 update slide we’ve mentioned that the current flow is 1,400 barrels. So, — and the gas has gone up from 9 to 11.5. So, could you explain this a little more, sir?

Elango Pandarinathan — Managing Director

Yeah, what — as we explained, what we are doing is because we are operating the both the wells to a single desktop separator, on a constant basis depending on the fluid flow that comes in, we adjust the volume of gas and oil to ensure there is no — see the facilities are operated in a safe manner. With the single separator, we are not able to pull the full volume from the oil wells and once that is set right, you’ll be able to see higher volumes from both the wells.

Rohith Potti — Marshmallow Capital — Analyst

So, just to clarify, once the separator is fully online, we will be able to go from — go to 4,000-odd barrels, which we have indicated in the past. Right?

Elango Pandarinathan — Managing Director

Yeah. We will put the separator back in flow and then test it for different levels before we can confirm with the volume.

Rohith Potti — Marshmallow Capital — Analyst

Any timeline on this that you would like to share right now, sir, because you said the full hose replacement you intend to do by before the monsoon, but what about the test separator?

Elango Pandarinathan — Managing Director

We are looking at a couple of other option right now with the contractor to see with the existing set up, how we can by adding couple of equipment, whether we can increase the production further. That work is still in progress. You just give us some time before we come back with the result of that.

Rohith Potti — Marshmallow Capital — Analyst

Perfect. So, that was helpful. And turning to Dirok, my understanding was that — I mean, as you mentioned in this call as well, we can produce up to 46. And right now, we’re producing only around, let’s say, in mid-30s for the longest period right now. So, why are we accelerating the setting up of the new pipeline at this moment and drilling of the two new wells to increase production to 55? Do we expect the demand to increase rapidly in Northeast in the next couple of years because of Dirok [Phonetic] spread?

Elango Pandarinathan — Managing Director

Yes, the answer is yes. And what we are doing really is the Phase II of the Dirok development plan, really consist of drilling the well and laying the pipeline, also setting up the distribution facilities in the consumer units as such to move away from the dependence on Oil India facilities. Two things are happening in Northeast. One is the production from Oil India is increasing, therefore relying on their infrastructure would create problem for us in the future. Therefore, this pipeline is a very critical element on that infrastructure. So right now, as you know from Kusijan to Duliajan, we are using Oil India pipeline. Therefore, irrespective of the scenario, even to evacuate the current production, we thought it would be appropriate to have our independent line, so that we are able to target the market without any disruption. That is number 1.

We don’t have any plans to drill the well. As you pointed out, the existing wells are able to give us 46 million cubic feet per day and the wells have the capacity to produce even more. Perhaps if required, we will do some workover operation for which we budgeted. The third is in the two-year timeframe, we really see the North-East that grid being connected with various demand centers in different phases. The first phase is Dirok connectivity with Guwahati. Right now, the Dirok gas can go up to Numaligarh refinery through the existing pipeline network and there is a pipeline coming from Numaligarh refinery to Guwahati being under construction. So, once that is very which we expect in a — 12 to 18 months’ time that will be ready, then Dirok gas can flow all the way to Guwahati market in Phase 1.

Subsequently, multiple demand centers are being connected and we have the flexibility to — we will wait for the demand to build up first. And then if required, we will do the workover operation if required to increase the production from the existing wells and future as the demand increases substantially, we will look at considering drilling well. In all scenarios this 35 kilometer pipeline is a very critical part and what we have done is we have started playing the forest segment only. That can be done during this season, that is the most critical and difficult part of the pipeline network, that’s what we have to.

Rohith Potti — Marshmallow Capital — Analyst

Thank you for that elaborate answer, sir. My last question is on the capital structure right now, so with B-80 producing at the current levels and we have other capex setup. So, could we give us a — share a summary on the working capital issues that we faced in the past? So, what is the priority? Is debt reduction to zero and continuing to have the INR100 crore cash on the books before we embark on other capex? So, what is the management thinking of in terms of the balance sheet and the capital structure right now? And could you also address the capital raise that we were talking about in the last couple of quarters? Are we going ahead with it or are we doing away with that idea for now?

Elango Pandarinathan — Managing Director

Rohit, you would have seen the accounts, we have raised INR100 crores from the bank to tide over all the working capital issues. We have no working capital issues anymore. Now having — we are having — we have now having — we are having a BHU [Phonetic] production and at the current price at the current level of production, we will be able to meet our all obligations. And as such there is no capital program at the moment other than PY1, which will be start planning for it at the end of this year, but once the monsoon because we could have seen that the monsoon ends in West Coast, the monsoon picks up in the East Coast. So, once the East Coast monsoon is over, we should be ready to drill some wells in the — first well in the PY1. So, as put your question right, now we are organically, we will be comfortable with our position of cash generation to meet all our obligations, including the discretionary capital.

Rohith Potti — Marshmallow Capital — Analyst

Okay, okay. So the — so we will be paying down debt — yeah.

Operator

Sorry to interrupt. Sir, I would request you to…

Rohith Potti — Marshmallow Capital — Analyst

Yeah, sure. Thank you so much. Yeah.

Operator

Thank you. [Indecipherable] Thank you. The next question is from the line of Hardik Shah from Taurus Mutual Fund. Please go ahead.

Hardik Shah — Taurus Mutual Fund — Analyst

Hi sir, thank you for the opportunity and congratulations for successfully completing the B-80 site. Sir, my question is that if at all for some reason, if are not able to solve the remaining problems of B-80 before the commencement of monsoon, sir. Can this be done during the monsoon? The hose pipe and separator, which you have mentioned, sir?

Elango Pandarinathan — Managing Director

I think it should be done because this has nothing to do with the monsoon as such. This is repair work carried out at the offshore platform, they should be able to continue with that.

Hardik Shah — Taurus Mutual Fund — Analyst

Okay. So, even if, sir, we have missed the weather window, still we will be able to operate and we’ll be able to scale-up the production. Is that correct, sir?

Elango Pandarinathan — Managing Director

That’s our, endeavor. Yes.

Hardik Shah — Taurus Mutual Fund — Analyst

Okay. Understood, sir. Sir, my second question is sir, that if you could share some number in terms of what is the current number of barrels of oil, which we have stored and what is the first delivery expected timeline sir?

Elango Pandarinathan — Managing Director

As we speak, we have about 142,000 barrels in stock.

Hardik Shah — Taurus Mutual Fund — Analyst

Okay.

Elango Pandarinathan — Managing Director

And other — first offtake plan comes once we reach to a level of 250,000 barrels. And the parcel type we expected to be in the order of 200,000 barrels. So, 50,000 barrels will be in stock always. So, that’s what we plan for it.

Hardik Shah — Taurus Mutual Fund — Analyst

Understood, sir. Thank you, so much. That is all from my side.

Operator

Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go ahead.

Dhwanil Desai — Turtle Capital — Analyst

Hi, sir, good morning. Sir, the first question is regarding the sales which we have not booked this quarter, which was in ONGC pipeline. So, can you elaborate a little more on that? Whether the custody transfer happened for that gas to the buyer and if not then whether that gas is still — has a line back in the pipeline or it’s been sold to somebody and yet to be settled in terms of accounting? What is situation?

Elango Pandarinathan — Managing Director

Let me just for the benefit of everyone. The gas that we produce in B-80 gets treated in the — in our facilities. Then the treated gas initially gets connected to the ONGC pipeline. That is from the Bombay High to Hazira Terminal of ONGC. It goes through the ONGC pipeline, we pay a tariff to ONGC for that transfer. Now, after it gets into the Hazira Terminal, then ONGC, Hazira Terminal is connected by the HVJ pipeline of GAIL. Then it gets custody transferred to GAIL in two streams. What is ONGC gas and the remaining gas is treated as the HOEC gas or HOEC gas as received by ONGC and the remaining gas is treated as ONGC gas.

Then GSPC will have to book a capacity in the GAIL pipeline in advance to lift the gas from GAIL system by GSPC paying a whatever is the tariff to GAIL and then GSPC in turn delivers the B-80 gas to the end consumer. That is the system. It has been working very well. Though, it’s a fairly complex system, we have a contract with ONGC and we have a contract with the GSPC. We do not have any contact with GAIL because we don’t deal with GAIL as far as this distribution network is concerned.

When we recommence the production in November. And so we could not give GSPC adequate advance notice. But we told them as soon as the production started we informed them. They said, just give us couple of days time to tie-up with the customers because you have not given as adequate time. But they could not conclude with the buyers or book capacity till November 16. So, from November 16, onwards, all the volumes that we produce go through the same system and GSPC has been taking the gas and making the payment to us. But the volume, about 3 million cubic feet that we delivered in the — that has gone from the ONGC system to the GAIL system and draw [Phonetic] GAIL system.

Our first approach was to contact GAIL and tell them, look, we will pay you transportation and parking charges, you redeliver the gas to GSPC, if you can lift it along with the December work. Unfortunately, in the current scheme there is no parking concept and that is the time where there was excess supply of gas in the market. So there was a huge, there no facility to store, but both ONGC and GAIL acknowledged that this volume is not ONGC gas and they acknowledge it to be B-80 gas. Subsequent, once we — part of, which is not feasible for GAIL to redeliver the gas to us for offtake by GSPC, we have made a formal offer to GAIL now.

Now, you take the gas. You buy the gas. That offer is under consideration by GAIL. We are waiting for them to confirm and conclude the transaction. So, right now, the volume is acknowledged. What we produce, what ONGC refuses is acknowledged and GAIL has acknowledged that that volume has been delivered into their system. Since we do not have a contract with GAIL, which has taken more time because it has to be a retrospective contract, GAIL has certain formalities to complete it.

Dhwanil Desai — Turtle Capital — Analyst

Okay. So, sir just a follow-up on that. So essentially, it means that the volume that went into the HPJ [Phonetic], what eventually supplied by GAIL to somebody, but we have not yet built for it because there is no contract between GAIL and us. Right?

Elango Pandarinathan — Managing Director

They’ve not supply to somebody because it is a long pipeline. So, there is a gas within the system, it just needs to be reconciled with GAIL.

Operator

Thank you. The next question is from the line of Riddhesh Gandhi from Discovery Capital. Please go ahead.

Riddhesh Gandhi — Discovery Capital — Analyst

Hi, sir and congratulations on B-80 [Phonetic]. Actually, you have everything online. Just a couple of questions. If we were understand, you know, the revenue recognition from the B-80, which we have done in Q3 and obviously, given we are — the storing the oil and this entire ONGC gas and the facility we started operations only some point in November. How does this sort of compare to the existing run rate in Q4 right now of B-80? Either volume or revenue, however, we want to show that.

Elango Pandarinathan — Managing Director

Since we’ve given — we take the existing production as a base. So, that is for 1.5 months virtual revenue. Now, it will be double of that in the current quarter.

Riddhesh Gandhi — Discovery Capital — Analyst

Got it, got it. But even in this entire, like actually 1.5 month, where we were operational, the oil was not sold, right it was stored [Speech Overlap]. Gas is in the pipeline, so I mean, would that actually be less than actually half them in terms of the normalized run-rate at this rate of production?

Elango Pandarinathan — Managing Director

Yes, I agree with you that we should add additional INR6 crores for the gas itself and the oil would be around say INR20 crores. So, we will be adding additional INR25 crores more than that.

Riddhesh Gandhi — Discovery Capital — Analyst

Got it. So if we understand if look at B-80, it’s another INR25 crores from just the unbilled stuff and then I mean, double it in terms of the production?

Elango Pandarinathan — Managing Director

That’s right.

Riddhesh Gandhi — Discovery Capital — Analyst

Got it. Sir, and just from separator angle, just wanted to understand the reason for the delay and I mean are there other options that we can just maybe restart from scratch or will that take longer and you know if you could throw some light on to, sir the prisms of issues and how quickly we expect to resolve it?

Elango Pandarinathan — Managing Director

See, if you know that, actually what we are producing at the moment is from a test separator. This test separator is designed for about 4,000 barrel of oil and about 7.5 million cubic feet of gas with certain back pipe — with the separator pressure thereon. Now, if we look at both the wells, one well is about 2,850 PSI another well is about 1,900 PSI. There is a differential, the velocity difference is too high. If we increase the production of the oil then what will happen there will be an oil carry-over into the gas dehydration unit, then that is a big one, then we should not be — we cannot be able to continue, then we have to stop the production.

So, our guys, what they are doing at the offshore, in a manner that maintaining the gas supply and what is the maximum quantity of the oil, they can pump it into the system as such. That’s where they come out with the level of 1,400 barrels and about 11 million to 12 million cubic feet of gas, which that they can optimally produce at the moment with the test operator. Once the HP separate comes in, the volume is high, then we will be able to pump more of oil, but there is a limitation because the issue is more towards the velocity difference. So, guys are working on the different permutation combination with process engineers in India and with the contactors and abroad, they work it out, to put the both the wells to its optimum capacity. That is being worked on it. So once the HP separator comes, we will put both the wells on production. We’ll be in a better position to understand and optimize both the well production to its tested capacity. I think little lesser than the tested capacity. That’s what we believe in it and we are endeavoring to do it.

Operator

Thank you, sir. The next question is from the line of Rohit Suresh from Samatva Investments. Please go ahead.

Rohit Suresh — Samatva Investments — Analyst

Thank you for the opportunity. Sir, my first question is, could you just indicate the current volumes in Q4 in Dirok and how is the demand going forward for this quarter?

Elango Pandarinathan — Managing Director

The Dirok offtake is in the 30s right now, and so we expect the same then to continue unless any major shutdown by any other major customer than that…

Rohit Suresh — Samatva Investments — Analyst

Got it. Sir, and my second question is right now, at what price are we supplying gas to GSPC? It is at the existing contract or is it around $12 to $14 that you mentioned in the last call?

Elango Pandarinathan — Managing Director

We are supplying at the existing contract.

Rohit Suresh — Samatva Investments — Analyst

Okay. So, my final question is on the QIP part. I read the raise around INR100 crores in working capital, but in the last call you had mentioned that we may need around INR150 crores of additional capital for the development of other fees. So, do we plan to raise that also in the future, as you mentioned that PY1 maybe drilling wells post the monsoon. So, will we be raising INR150 crores additionally? Any plans on that?

Elango Pandarinathan — Managing Director

No. With the current cash flow, we don’t need it.

Rohit Suresh — Samatva Investments — Analyst

Okay. Got it. Thank you so much.

Operator

Thank you. The next question is from the line of Tejas Shah from Unique Stock Broking. Please go ahead.

Tejas Shah — Unique Stock Broking — Analyst

Hi, good day. Can you explain the revenue from Dirok for the current quarter and also the expenses at Dirok, because what I understand earlier was that, that expense on the Dirok was only $1 during the production and expenses. And also, if you can share the B-80 revenue break-up wherein at 1,400 barrels of oil and also the gas price, I think this is at 22% of the earlier [Indecipherable], 22% of the oil price of average oil price or it is at $13?

Elango Pandarinathan — Managing Director

Okay. You asked the first question on the Dirok revenue. Dirok revenue, the gas revenue is about INR65.62 crores and the condensate is stored, because nothing is stored there. That is about INR8.65 crores. And the total revenue generation is about INR74.25 crores for the whole quarter — for the full-quarter of three months. In B-80, gas was about INR31 crores for 15 days production. And the stock, we are having mark-to-market is about INR16 crores. If we look at both the things it should be around INR47 crores. Right. INR47 crores is for 15 days approx., sorry, 45 days. Because you actually started from — okay. Right. That is including the stock. That’s what I said. And if you take the MOPU and FSO, we make about INR51 crores, sorry INR61 crores for our revenue for higher charges from B-80. Okay. So, that is a revenue base. Major revenue base comes from these two blocks. One is on the Dirok and another one is B-80. So, that’s what we said. In continuous production of the B-80, we will be reporting better numbers.

Tejas Shah — Unique Stock Broking — Analyst

Okay. And the prices, if you can share, which is at 22% or is at highest price?

Elango Pandarinathan — Managing Director

No, that B-80 prices, we realized was for the November, it is $13.55 gas price and they were not having an offtake. Because up to 31st March, it is a best endeavor basis. So, they have honored the price as agreed in the contract. So, this is based on the exchange price. Gas exchange price of $13.55. November, it is $14. And December also in the range of — sorry, November, it is $13.55, December, it is $14 and January, we got back to $18. That is January, they have honored the prices based on the Brent — 22.2% of the Brent price.

Tejas Shah — Unique Stock Broking — Analyst

So, from March on, by default, they will be honoring 22% concept. Correct?

Elango Pandarinathan — Managing Director

Correct. From April 1.

Tejas Shah — Unique Stock Broking — Analyst

Okay, April 1. Now the next question was, sir on the test separator, there is still no clarity. Why it is taking so long to replace that high pressure test separator because what I understand from your answer is still, I’m not getting clarity whether this test separator is going to get replaced and repaired because and we’re still looking at other alternatives. Means, if you can explain.

Elango Pandarinathan — Managing Director

I would like to state that the total weight of the HP separator is about 80 tonnes. It is some to the offshore now, sitting in the offshore now. We don’t have the crane facility to lift 80 tonnes to bring it shore and getting it done faster. Now what we are doing at the moment, the contractor is doing, we’re not doing it, the contractor is getting a group of people and they are doing the repair works in a slower and steady manner. The reason for that was safety because on side, we’re pumping oil and gas and the other side, we are doing the repair work. So, that’s what they are cautiously doing the work and it is bit slow on. So, once they completed the job, then we have test it, hydro test it for at least 6 to 12 hours to find out that there is no leak — further leak in the HP separator. So, that’s why it is taking more time than what we normally do it in an onshore about less then 15 to 30 days.

Operator

Thank you, sir. The next question is from the line of Manan Patel from Airavat Capital. Please go ahead.

Manan Patel — Airavat Capital — Analyst

Hello. Am I audible, sir?

Operator

Yes.

Manan Patel — Airavat Capital — Analyst

Thank you for the opportunity, sir and congratulations for B-80. Sir, first question is regarding the record of Kirit Parikh committee, so they recommended changing the pricing formula to 10% of the Brent. So, will it affect Dirok production from April onwards or how do we look at it?

Elango Pandarinathan — Managing Director

Yes, whatever, first is, B-80 will not be covered. B-80 will go with the e-auction determined prices and once the firm commitment commences from April 1, we are very comfortable, we go back to the contract price model. Dirok market, the North East market is used to the PPAC price. Therefore, any changes that the government makes in that would kick-in here. But you remember what we have done a separate e-auction for Dirok gas where we have said premium volume will be sold at PPAC price plus $1 and what we’re seeing is at an average of the volume that’s offtake and about 40% we are able to sell on premium basis. Once we lay our own pipeline, we expect those volumes to increase as such. So, the short answer is, yes, the PPAC price will have an impact in North East, but we will continue to explore the market determined basis to marginally increase our realization.

Manan Patel — Airavat Capital — Analyst

Understood, sir. And sir, second question is regarding the hose — that placement that you are planning and its manufacturing is going on. So, when you replace the hose, the production will need to be stopped or the production can go on and you will replace the hose simultaneously.

Elango Pandarinathan — Managing Director

The hose replacement is one is the floating hose and another is an under buoy hose. It should be a stoppage of production for at least about one or two days, not more than that.

Manan Patel — Airavat Capital — Analyst

Okay. Got it, sir. Thanks a lot and that’s very helpful. All the best.

Operator

Thank you.

Elango Pandarinathan — Managing Director

Thank you.

Operator

The next question is from the line of Hitesh Doshi from Nirzar Securities. Please go ahead.

Hitesh Doshi — Nirzar Securities — Analyst

Hello, yeah. Good afternoon, sir. Hello. Hello?

Elango Pandarinathan — Managing Director

Good afternoon, Hitesh.

Hitesh Doshi — Nirzar Securities — Analyst

Sir, will you please quantify the additional expenses incurred so far in stabilizing and repairing the oil well B-80 since we announced the technical shutdown and how much increase in cost we think will remain and how much was one-off in nature and what is the operating cost we are incurring for oil and gas from B-80? This is my three questions.

Elango Pandarinathan — Managing Director

So, Hitesh, that oil well we have not incurred much cost. The cost incurred for the oil well is $75,000 — GBP75,000 we paid to the UK company for pumping the sealant and arresting the loss of hydraulic fluid. And to open the valve sub-surface — open the valve at the bottom, we use the ONGC vessel for a day. That is the one major expenditure, about INR1 crore. These are the two major cost relating to the repair of the oil well.

The next question is about operating cost. Operating cost per day is more or less fixed, which is about $140,000 per day. Out of that $98,000 is coming back to HOEC through its subsidiaries for the FSO and MOPU. The effective third-party cost in this block is about $40,000 a day. Okay, anything more, Hitesh?

Hitesh Doshi — Nirzar Securities — Analyst

Which other cost we have incurred? I mean, I’m not asking just about the oil well, oil well, but the other cost involved with the delay of B-80 well? Overall, entire cost, whatever, the separator for — yeah.

Elango Pandarinathan — Managing Director

I agree with you because the wells have not been put on optimum production. And that is a concern as such. And second thing is the repair work is being carried out by the contractor, not by us but at the same time, we are incurring the cost towards our supply boats, helicopter and the transportation cost is incurred by us, which is in the order of around $40,000 per day without considering the loss being suffered by us on account of the MOPU and FSO ability of revenue earning.

Hitesh Doshi — Nirzar Securities — Analyst

Thank you, sir and wish you all the best for further…

Elango Pandarinathan — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead.

Maulik Patel — Equirus Securities — Analyst

Thanks for the opportunity, sir. Couple of questions. One is on B-80, let’s see stabilize this separators and everything, I think as per the earlier discussion, you had one more valve to drill there, right in the second phase. So, when — and you earlier mentioned that next priority is PY1, which you want to drill in the next couple of months.

Operator

Sir, your audio is not clear. Maybe we request you to use your handset to ask the question.

Maulik Patel — Equirus Securities — Analyst

Yeah, is it better now?

Operator

Yes sir, please continue.

Maulik Patel — Equirus Securities — Analyst

Yeah, sorry. Do you want to drill a well in PY1 and after that you will go for another well in B-80?

Elango Pandarinathan — Managing Director

Maulik, the fact is that we need B-80 at continuous production of two years before we embarking on the third well, right. So, we have not started. We have just had a continuous production of only three months, right. So, that’s why the B-80 program will come after 24 months continuous production of both of the wells for optimum capacity. Got it. And PY1, we will be embarking, we have completed the geological model and we had identified the locations. And now we’ll be embarking on sourcing of the material based on the well planning, so, normally well planning and sourcing the material takes about six to nine months. So, by the time they end up — this monsoon is over from the West Coast and the next monsoon comes from the East Coast and East Coast monsoon is over, we will be ready to drill the first well in PY1 because we have got now secured 10-year extension of the block.

Maulik Patel — Equirus Securities — Analyst

Got it, sir. Sir, second question on this B-80, our contract with GSPC is for 2-years starting from April 22 and as I remember the first year is on best basis and second year is in a firm basis, right.

Elango Pandarinathan — Managing Director

Correct.

Maulik Patel — Equirus Securities — Analyst

Okay, so in a second year, we will start getting 20% of oil price, right. The brand average price of the previous month as a realization? Correct. Okay and in that case, what is the minimum level volume, which we have committed to the GSPC for the gas?

Elango Pandarinathan — Managing Director

If the volume is 10 million cubic feet, which is roughly 3 lakh cubic meters per day and we have what is called take or pay, which is 75% of that volume, which means, if I don’t — I mean, if they don’t take it, they still have to pay. If I don’t deliver that volume, I have some penalties to take it as such. But reconciliation will be done on an annual basis. So, the whole idea is to ensure that sell the volume at the contract price and realized volume.

Operator

Thank you. The next question is from the line of Rikesh Parikh from Rockstud Capital, LLP. Please go ahead.

Rikesh Parikh — Rockstud Capital — Analyst

Yes, thanks for the opportunity and congratulation for getting the B-80 on-track as such. Sir, just a couple of — most of the questions — my question have been answered. Just a clarification, this 3.78 MMcfe of gas from GAIL, which is versatile [Phonetic], probably the value will be around INR6 crores-odd as such, which is not accounted in the numbers?

Elango Pandarinathan — Managing Director

Yeah, we have not accounted that number because we have not raised the sales invoice. Even we take the administrative price for the volume we supplied, we should be getting for our 60%, we should be getting a net of around INR6 crores.

Rikesh Parikh — Rockstud Capital — Analyst

Okay, Thanks. And second thing, on the — the oil what we have validated, INR16.59 crores, so that is at market value or how have been valued at in our stock?

Elango Pandarinathan — Managing Director

It is mark-to-market.

Rikesh Parikh — Rockstud Capital — Analyst

Mark-to-market. Thank you. And lastly on PY1 development plans, what is the kind of capex we’ll be looking at next year, because we are planning to drill one well in the next year. So, what will be the appropriate capex we will be doing looking at it?

Elango Pandarinathan — Managing Director

As you all know that is a discretionary capital. We will be, because you know the block, we made an investment of about INR1,800 crores and since beginning. So, we have to do a capital investment. First, we will be drilling one well that would cost us around INR65 crores. If the well is successfully tested and it is on a — and the test results are as per our prognosis, then we will be embarking on the next well. So likely, we have to plan to drill three wells together. If all, we assume that first well is successful, we go to the second well, if the second well is successful, we go to the third well. Together, it will cost around $25 million to $30 million.

Once that work is completed, then we will connect all the wells through subsea and connect to the platform. So, if you put together all, you’ll be in — we will be making a stage investment on success drive success basis, about $50 million.

Rikesh Parikh — Rockstud Capital — Analyst

And then last one on the PY1, the current rate of 3.67, what we realized is lower than the government’s formula. So, is there any initiatives on a fixed-price basis? And are we able to cross-sell the full capacity over there?

Elango Pandarinathan — Managing Director

So, when the new discoveries are happening, the prices are renegotiable and we will be getting back to the best price in the market.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Ravi Sundaram from Sundaram Family Investment. Please go ahead.

Ravi Sundaram — Sundaram Family Investment — Analyst

Hi, sir, thank you for the opportunity. I just have one question. Maybe this is already clarified by Riddhesh. In the Q3 numbers, have we accounted for oil in the reported numbers?

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

Sales number is there, obviously that it is stock adjustment, it gets reflected in the accounts.

Ravi Sundaram — Sundaram Family Investment — Analyst

Okay. Just to clarify on that part. I think earlier in the con-call you said we have so far had a contribution of INR25 crores in Q3 from B-80 and it’s expected to roughly double in Q4. Is that a fair understanding?

Elango Pandarinathan — Managing Director

That’s right. If we sell the oil, see if you could, one offtake makes a lot of difference in the company. That’s what we entered into it. Because currently, we have about 140,000 barrel in stock.

Ravi Sundaram — Sundaram Family Investment — Analyst

Okay. And last question. Was there any seasonality in Q3 from Dirok? And are these numbers sustainable for Q4 for Dirok?

Elango Pandarinathan — Managing Director

At least in January, we are seeing similar offtake. So, we have not seen any major changes. It is in the 30s.

Operator

Thank you. The next question is from the line of Vaibhav Badjatya from Honesty and Integrity Investment. Please go ahead.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

Yeah, hi, sir, thanks for providing the opportunity. So, I think, earlier you said that separator work can go on even during monsoon. That’s what we need to do is the hose replacement that need to be completed before monsoon. So, and I think you also said that this you placed the order and you’re monitoring manufacturing. So, are we going to import the hose or our contractor is taking care of that and he will import on his own. and basically, he will then do the hose replacement?

Elango Pandarinathan — Managing Director

Hose replacement because the existing hoses are holding at the moment, the new hose comes, firstly we will change the floating hose. For that it is, with the existing ONGC, we have got one DP1 vessel, with that they will be able to do that. And the under buoy hose, we need a support from ONGC, we will get a DSP and with that we will replace the under buoy hose. So, when we are doing revised Mooring Analysis by the guys in [Indecipherable] Dubai. With that, we will be able to put a new system in place in such a manner that we don’t get affected by the monsoon.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

Okay, okay. And so is there complication because earlier you indicated you are monitoring manufacturing of this new hose? So, I just want to understand, is there any complication in the design of the hose or is it very complicated to — get it here?

Elango Pandarinathan — Managing Director

Let me just clarify, this number one, whatever is the top side work that is being done by contractor at his cost. He has to repair the separator and deliver to us. And as Jeeva explained that is, we will continue — I mean we really expect it to be over much before monsoon. Even if during monsoon is something to be there that will continue. So, that’s no weather-related issues as far as top side is concerned. And as Jeeva explained, it is lower because we are doing — trying to do it in offshore and we have to do it safely because there is an ongoing structure. As far as the hose replacement is concerned, these are long-lead items, we have placed order. Since it is very critical for us to replace it before monsoon, that is why we emphasize that we are closely monitoring and we are on track to do that before March.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

Okay. Got it, sir. Thank you. That’s it from my side.

Elango Pandarinathan — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Rohit Suresh from Samatva Investments. Please go ahead.

Rohit Suresh — Samatva Investments — Analyst

Yeah. Hi, sir. I just had one follow-up. Can you just give some clarity on the revenues from D1 oil well in Q3?

Elango Pandarinathan — Managing Director

See, D1 oil well, we cannot segregate. Now, what is happening is our production, our offtake is getting limited, because from the wells you know that D2 I cannot produce to its full level and the D1 I cannot produce from the full level. That’s the reason you see the gas production of about D1 is about 5 million and the D2 is about 6 million, where the D2 can go up to, say, 12 million to 13 million on its own. So this being the case, actually that what oil produced from the D1 for 45 days is about INR70 crores and the gas, you take the revenue off, that could be from D1. But it is more of an allocation, theoretical allocation, and it’s not a practical way of looking at it offshore.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

So, at 1,400 barrels that you said that at the current level that we can produce. So, what will be the revenues for a quarter, some indication on that? Like assuming we can do….

Elango Pandarinathan — Managing Director

This is based on the oil prices, you can multiply the price.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

So 1,400 will be, we can assume 1,400 for the quarter, right, consistent here, that’s what.

Elango Pandarinathan — Managing Director

That’s what we have…

Operator

Okay. Sir and just one more question. So, just to summarize, I just wanted clarity on apart from the hose that we have to replace that is only dependent on the monsoon, right. All the other work can also be done even when the monsoon season hits, right?

Elango Pandarinathan — Managing Director

Yeah, correct. That’s true.

Vaibhav Badjatya — Honesty and Integrity Investment — Analyst

Okay, thank you.

Operator

Thank you. The next question is from the line of Gaurav Shah from Harshad Gandhi Securities. Please go ahead.

Gaurav Shah — Harshad Gandhi Securities — Analyst

Yeah. Thanks for the opportunity. Sir, my question is on average selling price. So sir, in respect of Dirok, we said that 32% of sales has been at 9.7 per MMBtu. So, what about the balance 68%?

Elango Pandarinathan — Managing Director

Balance is sold at the PPAC price of $8.57 per MMBtu.

Gaurav Shah — Harshad Gandhi Securities — Analyst

Okay. And my second question is in respect of Kharsang segment. So, I understand all the pending issue with Government of India have been resolved, right. So, by when do you expect the production can be like increased to 1,800 BOEPD from existing 430 BOEPD?

Elango Pandarinathan — Managing Director

So, the — in Kharsang, the joint venture has submitted a field development plan to drill additional wells, which would take the production to full potential. That has been approved. And the remaining cost recovery-related issues, part of them have been resolved and the other part, both the government and the contractor has agreed to refer it to a Dispute Resolution Committee. So, that has — and paving the way for execution of the 10-year extension.

So, the first thing is for that to happen, which is a formality now and then the contractor, I mean, the operators will propose a drilling campaign and that will be reviewed with the government and then we will undertake the drilling. Before that some workover job will happen to increase the production. So, once the PSC gets extended, then we will be working on those program.

Gaurav Shah — Harshad Gandhi Securities — Analyst

So, can we say after six months all this can be achieved?

Elango Pandarinathan — Managing Director

No, no, no. Drilling well will take much more time in that region. We’ll give you and once the operator comes up with a clear plan, we will give you an update, maybe in the next con-call.

Gaurav Shah — Harshad Gandhi Securities — Analyst

Okay, thanks a lot.

Operator

Thank you. The next question is from the line of Sunil Nagpal from Lotus Investments. Please go ahead.

Sunil Nagpal — Lotus Investments — Analyst

Sir, congratulations on bringing B-80 back online. One more follow-up question regarding the test separator. What could you give — would you give a timeline to this repair of the test separator, if not for the other options that you are considering what if we are looking at only the repair of the test separator? Would give a timeline for that?

Elango Pandarinathan — Managing Director

Really, we don’t want to give any timeline because in the past, whatever timeline we gave, we were not able to meet that. All, we can assure you is we are doing everything, as we are looking at every option to achieve it as soon as possible.

Sunil Nagpal — Lotus Investments — Analyst

But will that also take till monsoon or we can expect say by the first-quarter of next fiscal?

Elango Pandarinathan — Managing Director

We are doing all our best possible efforts and as soon as it’s completed, we’ll get to know because the contractor is working. There are 54 persons onboard the facility at the moment. Now we have to leave them, we cannot pressurize too much on them considering the safety issue they are in.

Sunil Nagpal — Lotus Investments — Analyst

I understand, I understand. I was just wondering if this would take the same time as opposed maintenance or it can be done earlier?

Elango Pandarinathan — Managing Director

So, we have been pushing the contractor to get it done earlier. For us, it is always yesterday, but he is saying it is always tomorrow, that is the problem. We will address it.

Sunil Nagpal — Lotus Investments — Analyst

All right, sir. So hopefully, it can be done sooner than the monsoon.

Elango Pandarinathan — Managing Director

Yes.

Sunil Nagpal — Lotus Investments — Analyst

Thank you.

Operator

Thank you. The next question is from the line of Vasu [Phonetic], an individual investor. Please go ahead. Mr. Vasu, I have unmuted your line, kindly proceed with your question.

As the current participant is not answering, we’ll move on to the next question, which is from the line of Rahul Shah [Phonetic], an individual investor.

Rahul Shah — — Analyst

Hello?

Operator

Please proceed.

Rahul Shah — — Analyst

Yes. Hi, sir. Just — after listening to everything, just a question on your — can you provide any outlook in terms of revenue growth for the next financial year? I mean, so far, the trajectory has been really well in terms of quarter-on-quarter and even year-on-year. So if you can provide any guidance, any outlook, it would be really helpful. Thank you.

Elango Pandarinathan — Managing Director

I think we will avoid giving any guidance at this stage. We’ll focus on [Indecipherable]. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Parthraj Gohil [Phonetic], an individual investor. Please go ahead.

Parthraj Gohil — — Analyst

Hello. Am I audible?

Operator

Yes. Please proceed.

Parthraj Gohil — — Analyst

Yes, sir. Congratulations on the Company’s performance, first of all, sir. I would — my major questions have been addressed. I have just a single question. So when are we going to reassess our resource? And what is the current status?

Elango Pandarinathan — Managing Director

We will announce — we will do the reassessment as we do at the — enter the financial year and provide — as part of annual statement, we provide as we do that. It’s an year-end exercise, sir.

Parthraj Gohil — — Analyst

Okay. Got it. And what is the current status? Okay. Okay.

Elango Pandarinathan — Managing Director

See, what has happened, B-80, we have already announced the results because only a very minimal production there on towards. We don’t have any other supportive data to reanalyze the reserves at the moment. As an ongoing exercise, we will — our geologists will be working on from 31st of March. And before the declaration of the results, they will give the resource numbers. That would be included in the outcomes.

Parthraj Gohil — — Analyst

Okay. Thank you.

Operator

Thank you. The next question is from the line of Vivek Joshi [Phonetic], an individual investor. Please go ahead.

Vivek Joshi — — Analyst

Yeah. Congratulations for a good set of numbers and all the effort that you have put into get the production that I have two questions.

Operator

I’m sorry to interrupt, sir. Your voice is — the audio is not clear. I would request you to use your handset to ask a question, please.

Vivek Joshi — — Analyst

Just give me a second. Is it better now?

Operator

Yes, sir. Please proceed.

Vivek Joshi — — Analyst

Yeah. I just wanted to note that given our various deals are under like various schemes of production sharing and all. Can you give us some idea or a metric in a presentation and all as to in future or now that what are the [Technical Issues] variables on which the pricing is determined? Like for the B-80 gas, it’s 22% or X percent of Brent or somewhere into the gas exchange prices. So can you just throw some light on like how should we estimate like crude moving or gas moving? So how do we estimate changes in revenue? Just any idea in the presentation for the future or just the feedback.

And my second question is — just a quick question. The second question is that, what are the material events that you will be reporting? Like if the gas prices [Phonetic] gets fixed, can we expect an announcement? Or like — so just can you just give us like what are the events that you are going to announce as material so that we can look out for that and not wait for the next quarter results? So can we give some clarity on that? These two things.

Elango Pandarinathan — Managing Director

I think on the pricing, if you really look at it, the major production for us is coming from essentially Dirok and B-80. The rest is only very minimum one. As far as the Dirok is concerned, it is primarily a gas field. So the gas prices, whatever is a published PPAC price, which is revised by the government once since six months, and that is the price that is prevailing for roughly about 40% of the whatever wanting we report, we’re able to get premium gas, right, which is $1 more than the PPAC, that’s a pretty slight forward publicly available.

As far as B-80, you’ve got oil, you’ve got gas. Oil is, as you are explaining, every — we’ve not sold any oil, oil produced is stored in our facility. And every quarter, we report based on mark-to-market basis. And once we have a saleable parcel size of oil, we would engage with the refineries and conclude parcel sale as such, a single parcel, as Jeeva was explaining, about 200,000 barrels of parcel size that we are looking at. So oil prices, you can always track and what is publicly available internationally traded prices. There will be some discount to that when you actually enter into a sales contract. Our gas price for B-80 is straightforward, it is 22% of the Brent price converted on a MMBtu basis, which will kick off from 1 April. But during this best endeavors period, when the prices are around — you either take that or the another alternative way of determining the fair price is in the gas exchange, which is also reported, and we gave you the numbers as such. So roughly, you can keep watching the Brent price and 20% of that is for the gas price of B-80 and some discount for that — for the oil side. And you have a good suggestion. We will update our investor presentation with those pricing formulas in the next update.

As far as material event is concerned, we follow what is the general norm followed in the industry. Then there is a major shutdown due to any reason, lasting for longer, we will provide the update. And in the past also, I think all of you have given us suggestions why you don’t update immediately. The whole reason for that was we just wanted to put the well and see that there is no other problem occur to put it on a continuous production mode and see it stabilize before we update. Otherwise, what happens is, we say it is producing X volume. And after a couple of days, if there is any issue, then it becomes a difficult area. The first thing is the test we follow is once we are very sure that the — that there is a sustainable increase in the production volume of any of the main reason we provide the update as such. So I think once it stabilizes, which we hope soon it will happen, then we will give.

Operator

Thank you. The next question is from the line of Jungoo Fitter [Phonetic], an individual investor. Please go ahead.

Jungoo Fitter — — Analyst

Yes. Good afternoon, sir. And thanks for giving me the opportunity. My question is regarding the Gujarat marginal field. The drilling program is going to be only in Palej field and what is the production is there from Palej field?

Second is, our PY-1 field, are we producing gas now also is completely shut?

And thirdly, sir, is PY-3 field, any development is there? Because it was a producing field, which has been shut for more than 11 or 12 years, if I’m not mistaken. That’s all. Thank you.

Elango Pandarinathan — Managing Director

Yeah. The PY-1, we are currently producing about 0.9 million cubic feet of gas. It is not completely shut down. And the PY-3, we are not the operator, you know that well. And then marginal field, we have got an — we are planning for the environmental clearances, and we are going for drilling those wells.

Palej, our current production is about some 80 barrels. And North Balol, and Asjol, we need to have a cluster drilling. That means we have to mill a number of wells. So that’s what we are planning for it. And whether we do it in-house or through somebody else, we will decide at the later stage. Our priority at the moment is putting the B-80 on a full production mode and then go to PY-1 and then come back to Western unit [Phonetic].

Operator

Thank you. The next question is from the line of Uday Vernekar [Phonetic], an individual investor. Please go ahead.

Uday Vernekar — — Analyst

Hello?

Operator

Please proceed.

Uday Vernekar — — Analyst

Yeah. Am I audible, sir?

Operator

Yes.

Uday Vernekar — — Analyst

Yeah. I just wanted to know if there is any update on PY-3 field. Currently, the operator has secured a space. So just wanted to know, I think by end of this year, they are planning to put that in production. So is there any view from as we are also a shareholder in that?

Elango Pandarinathan — Managing Director

Yes, we have 21% stake in the company. And we have to decide [Indecipherable] any development plan comes on it, we will, at that point in time, decide whether to participate or not provided it makes a commercial value to us.

Operator

Thank you. The next question is from the line of Karan Mehta [Phonetic], an individual investor. Please go ahead.

Karan Mehta — — Analyst

Hello?

Operator

Please proceed.

Karan Mehta — — Analyst

Yeah. Thank you for the opportunity. Sir, I just have one question. So if we assume the current rate for Dirok, PY-1 and conservative numbers for B-80 oil of around 4,000 barrels per day and 12,000 MMBtu of gas operating nearly for 330 days, can we achieve the INR650 crores of EBITDA, including the INR150 crore EBITDA from MOPU and FSO?

Elango Pandarinathan — Managing Director

Probably your number is right, but we have to have that all the parameters, which you said should be achieved.

Karan Mehta — — Analyst

Okay. Okay. Yeah. And sir, just one small suggestion from my end. If you can just update the production volume from all fields on a monthly basis. This will really help the investors get a good clarity on how we are progressing.

Elango Pandarinathan — Managing Director

See, I think we have to go with the reporting standards followed by the oil and gas companies. We are small. We are talking about, say, six wells — six to eight plus four and another six, 20 well production is there, and we cannot update on a monthly basis. That’s the reason we do it on a quarterly basis, which we’ll continue to do on quarterly.

Karan Mehta — — Analyst

Okay, okay. Yeah. Thank you, sir.

Operator

Thank you. There is a follow-up question from the line of Tejas Shah from Unique Stock Broking. Please go ahead.

Tejas Shah — Unique Stock Broking — Analyst

Sir, on the top line, with the INR106 crores. So you said INR70 crores — INR65.62 crores are from Dirok gas, INR8.65 crores are from the — I think, other things from Dirok. So what is the rest turnover top line versus there?

Elango Pandarinathan — Managing Director

Can you repeat the question, please?

Tejas Shah — Unique Stock Broking — Analyst

On the top line, the Dirok is giving a INR65 crores by gas, INR8.65 crores from condensate and the stand-alone numbers, what else top line is added, means this is only adding up to around INR75 crores-odd. So the balance INR30 crores is coming from where?

Elango Pandarinathan — Managing Director

See, we have talked about — see, the total revenue, if you look at, it is requiring, not only from B-80, it is coming from PY-1, Dirok and Cambay, all put together the revenue is made up, right? So you look at B-80 is INR68 crores and PY-1 INR6.15 crores and Dirok is INR182 crores and Cambay INR4.35 crores. This is what the revenue breakup for the total year, I mean, up to nine months.

Operator

Thank you. The next follow-up question is from the line of Riddhesh Gandhi from Discovery Capital. Please go ahead.

Riddhesh Gandhi — Discovery Capital — Analyst

Hi, sir. Just a question. So just a quick clarification question. So in terms of the equity raise, given now we are producing from a B-80 is the equity raise on hold for the moment, or are we still looking at an equity raise?

Ramasamy Jeevanandam — Executive Director and Chief Financial Officer

It’s an enabling resolution and as I told you already, for organic growth, but meeting the obligations, we don’t need additional equity at the moment — additional equity at all.

Riddhesh Gandhi — Discovery Capital — Analyst

Great, great, great. And just a clarification with regards to in terms of [Indecipherable] kind of how much would it be if we just decide to, let’s say, order like [Technical Issues] and how long would it take? Because I mean, obviously, this has been a reasonable amount of the challenge, and it’s obviously impacting the production levels. Is there any other way to expedite it or maybe just restart it at repairing it isn’t going to happen in a reasonable time frame?

Elango Pandarinathan — Managing Director

I think we’ve answered very extensively on the question. I don’t think we will look at creating a new order for a new separator [Technical Issues]. We believe we’ll be able to fix the problem. Only thing we don’t want to commit to a time line at this stage, we are doing everything possible to [Indecipherable] and it will work.

Operator

Thank you. The next follow-up question is from the line of Rikesh Parikh from Rockstud Capital, LLP. Please go ahead.

Rikesh Parikh — Rockstud Capital — Analyst

Yeah. Thanks for the opportunity. Sir, just want to clarify, I mean, sir, we’ll be realizing our first oil revenue in this quarter the understanding is right?

Elango Pandarinathan — Managing Director

See, I think this is having two factors. One, we have to have a production to reach the volume of 250,000 barrels. Then at that point in time, what is the price we will be getting afterwards because we have a storage capacity, which is in dollar of about 900,000 barrels. So that is one of the things available to us. We can market at the right time at the right price.

Rikesh Parikh — Rockstud Capital — Analyst

Okay, thanks. Thanks for the question.

Operator

Thank you. The next question is from the line of Vasu [Phonetic], an individual investor. Please go ahead.

Vasu — — Analyst

Good afternoon, sir. Am I audible?

Elango Pandarinathan — Managing Director

Yes.

Operator

Yes. Please proceed.

Vasu — — Analyst

I — if I have understood it correctly, the hoses are being ordered by Hindustan Oil Exploration, am I correct?

Elango Pandarinathan — Managing Director

No, it is not. It is called — the order is made by our subsidiary company that is this Hindage Oilfield Services. This is — this hose is a OCIMF compliance and that will be inspected during the manufacturing, and we will be planning for a factory acceptance test and after the we’ll mobilize it to the field.

Vasu — — Analyst

So that is being done by BEINIT Energy? That is in…

Elango Pandarinathan — Managing Director

BEINIT is our consultant. We use their [Speech Overlap]

Vasu — — Analyst

Okay. They are not manufacturing the hoses [Speech Overlap]. So is it being done in India? Or is it out of India?

Elango Pandarinathan — Managing Director

It is out of India.

Vasu — — Analyst

And have they been shipped or they are yet to be shipped?

Elango Pandarinathan — Managing Director

We have placed an order, and now they are manufacturing it. Once the manufacturing is over, then we will have a factory acceptance test and physically inspect the hose before it gets moved out from the factory. That is being monitored by BEINIT.

Vasu — — Analyst

Okay, sir. Secondly, I think we have around short-term debt, which is repayable. That is around INR200 crores?

Elango Pandarinathan — Managing Director

If you look at our debt profile as such, our long-term is INR231 crores and short-term is INR123 crores. So short-term, we will come out by — all these things by end of July.

Operator

Thank you. The next question is from the line of Jayesh Gandhi from Harshad Gandhi. Please go ahead.

Jayesh Gandhi — Harshad H Gandhi Securities Private Limited — Analyst

Sir, if I heard you correct, you said that we have a contract with GSPC for B-80, which is like 10 mmscfd until FY ’24, that is take or pay. Am I correct, sir?

Elango Pandarinathan — Managing Director

Correct. For the next finance ’25, FY ’25.

Jayesh Gandhi — Harshad H Gandhi Securities Private Limited — Analyst

Okay. And what would be the status post that? I mean, would they continue to buy — whether or not take or pay or then we have to enter into a fresh contract? Or how is that going to work post that?

Elango Pandarinathan — Managing Director

Post that, we will — at some point in time, before that, we will go for another e-auction. And now that we have kind of — we will — by the time would have a very stable production operations continuing. So we will offer the volume on a firm basis to — and conduct the e-auction and secure a customer.

Jayesh Gandhi — Harshad H Gandhi Securities Private Limited — Analyst

Okay. And can you throw any light on pricing then? Will it be the same like 22%-plus concept or…

Elango Pandarinathan — Managing Director

Whatever is the prevailing price in the market because you would have observed the cash prices are pretty volatile, and India deals with multiple gas price regime, you have imported LNG, you have domestic PPAC price and the price of core [Phonetic] to such e-auctions as such. Whatever the market price overall, we should — very difficult to predict what will be the price at that point of time.

Operator

Thank you very much, sir. Ladies and gentlemen, I now hand the conference over to Mr. Elango from Hindustan Oil Exploration Company Limited for closing comments. Over to you, sir.

Elango Pandarinathan — Managing Director

Thank you. This has been a quarter where we have finally addressed multiple challenges in our asset portfolio and made headway on multiple trends towards a stable production growth. Apart from bringing both B-80 wells on simultaneous production mode, we also managed to reach agreements with government, paving the way for PSC extension in both PY-1 and Kharsang. We are well sufficient to step up production from Dirok field as the Northeast grid implementation makes it progress, connecting new demand centers in various stages. We are expediting environmental clearance and plans to drill well in our PY-1, Cambay, Kharsang, to continue to build on our production growth journey in future. However, our top most priority and attention will continue to be on B-80 to achieve optimum and stable production rate.

Thank you once again for joining.

Operator

[Operator Closing Remarks]