Hindustan Oil Exploration Company Limited (NSE: HINDOILEXP) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Kale — Investor Relations
Jeevanandam — Managing Director
Senthilnathan — Chief Financial Officer
Analysts:
Rawani — Analyst
Jiten Parmar — Analyst
Ruchita Maheshwari — Analyst
Viraj — Analyst
Unidentified Participant
Manan Patel — Analyst
Sanjiv — Analyst
Sandeep Dixit — Analyst
Rakesh Roy — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Hindustan Oil Exploration Company Limited Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Thank you. I now hand the conference over to Mr Kale from EY IR. Thank you, and over to you, Mr Kale.
Kale — Investor Relations
Yes, thanks, Niro. Good morning, everyone, and a very warm welcome to all of you. I’m Kale from EYIR. We represent the Investor Relations Advisory for Hindustan Oil Exploration Company Limited. On behalf of the company and the management, I would like to thank you all for participating in the company’s earnings conference call for Q4 FY ’25. The company has published its result and uploaded investor presentation on the exchange last night. So before we start, the disclaimer. Some of the statements made in today’s earnings con-call may be forward-looking in nature.
Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by information currently available to the management. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings con-call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Let me introduce you to the management participating with us in today’s con-call.We have with us Mr R R., Chief Managing Director; Mr NS Santillathan, Chief Financial Officer; Mr Krishnan, Chief Technical Officer, ENP. Without further ado, I would now like to hand over to Mr. Thanks, and over to you, sir.
Jeevanandam — Managing Director
Okay. Thank you, Naket. Good morning to you all. I hope everyone has received the updated presentation. It is available on our website for your reference. I have with me Krishn, our Chief Technical Officer; and Sandhil, our Chief Financial Officer; and our Company Secretary. I would like to start with the updates on the Northeast region. We have obtained the environmental clearance for drilling 40 development wells and three exploration wells in, in Arunachal Pravez on February 28th February of 2025.
The contract has been awarded for the first phase of drilling nine development wells. We commenced drilling of the first well on 31st March 2025 and the well was drilled, tested, completed and hooked up for production. The well is producing about 200 barrels of oil per day. The second well has been drilled to a depth of 1,186 meters and logging is in-progress. We continue to drill the first phase of nine wells, which will be followed by an additional nine wells.
We are also planning to drill one deep well, testing the, and formation to assess the full potential of the block. The revisory development plan for has been approved by for the extension of the. We plan to drill a well in after the formation and subject to the availability of the rig, we will start the drilling the 4th-quarter of this year. The were sales for the current quarter is 15.57 million standard cubic-feet per day, while the offtake in the previous quarter was 17.79 million standard cubic-feet per day.
For the year 2024, ’25, the average production and sales was 17.76 compared to 19.96 mmacf day-in ’23 ’24. Accordingly, the sales volume of the current quarter is 0.37 Bcf compared to 0.44 Bcf in the previous quarter per our share. Production is 6,600 barrels compared to 7,500 barrels in the previous quarter. Although the steel can produce more than 50 million cubic-feet of gas per day, we have to restrict the production due to lack of demand. The price realized in the current quarter was 8.45 per MMBtu, whereas it was 8.25 MMBtu in the previous quarter.
We have been keeping ourselves updated on the progress of the Northeastern — Northeastern gas gridge. Gas and when the, the concept of common carrier is accepted and the gas grid connectivity is established. The situation of the demand concerns will get reversed. It is difficult to predict the timeline, but we believe it should be operational in ’25 ’26. We will augment our capacity and be ready to meet the potential increase in-demand once the demand concern is elevated by connecting the Northeast gas grid to the national gas grid. Block HP, we Call-IT as a Block 19 adjacent to called as a greater is another structure, we expect the extension of the block for one more year to start and complete the committed work program.
We have carried out the pre-stake debt migration study, which is quite encouraging and the prospect looks much better. Well GPO is ready, but our drilling preparations will start as and as we action. Our capital out into the Northeast region for the next two financial years continues to be to INR150 crores. Blocks in Canada after significant normal clearance via carried out the workover operation of the well and started producing 1 million after being shutting for over 15 years. With this, we plan to do two development unles in, which has already been approved by the partners.
The partner has been awarded for drilling these two development wells. After the number of drilling, we will start preparing for drilling two wells in last year. We are also expecting a final clearance of the PAC along with the extension of the block. This could add substantial value to the end of blocks. Now I move on to the offshore blocks. We signed the revenue-share in contact on April 15, 2025 for in the Mumbai offshore, the small with an area of about 3325 kilometers.
This block has two discoveries and data for the entire area. Considering the water about 40 meters, we are planning to — planning for a cost-effective development plan to unlock the value on the block. We are in the process of preparing the development plan for the existing discoveries and also evaluating the potential for further exploration. In DAT, we have taken over the 40% interest of APL, KEPL, and thereby we hold 100% in this in the block. Both of which are in-production. Production in the current quarter is 60,544 barrels of oil and 0.44 Bcf of gas. Compared to 88,703 barrels of oil and about 0.69 Bcf of gas in the previous book. For the year, the production is 275,000 barrels of oil and 1.9 Bcf of gas compared to 320,000 barrel of oil and 2.5 Bcf of.
During the — during this quarter, the average gas price realized is 12.09 per MMBtu compared to US dollar 10.78 per MMBtu in the previous quarter. For the current year, it is averaged of 10.84 per MMBtu compared to 15.86 in the previous year. The gas price in the Western region is now moving to the imported LNG price. We have about 390,000 barrel of oil and stuff and are expecting a better price to realize before we send that. Under the workover and additional drilling in PAT, the charge — the charge to the subsidiaries has been moved from a day rate to a rate per barrel of production, this will the sustenance of all three assets.
In PY1 offshore field, all facilities for processing and transporting gas are in-place. Petro, the state-owned oil and gas company in Vietnam, which is producing oil and gas from the basement akin to the complex geology of PO1 has completed the GNG review. We are expecting that positions in-place volumes and proposed locations for building new wells. This will validate the locations proposed by our inner GMG team and bring new hope into the field. The gas price of US dollar 3.66 per MM duty is no longer applicable and we have entered into a term sheet with the gain for a TPAC price above $6.75 per MMBtu on grass calorific value. The net price will be little higher than that.
By the end of June 2025, we’ll receive the report from PetroVietnam and immediately thereafter, we plan to build three wells. If everything goes as per plan, the building of the first well will commence in the current financial year. In effect that EBITDA for the current year is INR249 crores in the consolidated accounts compared to INR326 crores in the previous year. In standalone, EBITDA for the current year is INR195 crores compared to INR133 crores in the previous year. This in overall a reduction of about 24%, which is mainly due to the low uptake in the rock and gas price and lower production in BAT. We are confident about the reserves and resources in our existing blocks and our ongoing Drilling program and discontinuation both onshore and offshore will add to the results by testing hydrocarbons to the surface. This volatility in quarterly results is due to many factors beyond our control. We started the onshore drilling campaign for about 30 wells from 31st March 2025 and will continue till the completion of drilling up all wells. Similarly, our 10 offshore wells in three offshore blocks will start from DY1 and will continue till completion. Our net-debt is zero and our drilling program is and will continue to to achieve our targets. We believe in our assets, which will not let us down even in the worst price scenario. Now Shendhil, our CFO, will update on the financial results. Over to Shandil.
Senthilnathan — Chief Financial Officer
Thanks, Mr. Good morning all. Standalone revenue for this quarter is INR142.61 crores compared to INR77.64 crores in the previous quarter. The increase in revenue is mainly on account of 100% participating interest in BATPL and transfer of 25% participating interest in-field. DAT revenue for the current quarter is INR44.15 crores for gas sales compared to INR59.19 crores in the previous quarter. Oil in-stock is adjusted in the operating cost. Current quarter revenue decrease in is due to lower production of gas at 439 mmscf in Q4 compared to INR692 mmscf in the previous quarter.
In case of DROS, revenue for the current quarter reached INR31.47 crores compared to INR34.76 crores in the previous quarter. During this quarter, 373 MMACF of gas was sold compared to 436 of gas sold-in the previous quarter. Similarly, 6,603 barrel of oil were sold-in this quarter compared to 7,499 barrel of oil sold-in the previous quarter. Major reason for reduction in revenue is lower demand in the region. Operating expenses for this quarter in the standalone accounts is INR74.5 crores compared to INR73.98 crores in the previous quarter. Other costs, including depreciation, depletion, finance costs and others is INR22.66 crores for this quarter compared to the crores in the previous quarter.
The increase is mainly on account of 100% participating interest in BADC. Out-of-the total operating cost in the current quarter, credit adjustment for oil stock is INR76.08 crores, whereas it was INR29.32 crores in the previous quarter. Standalone EBITDA for the current quarter is INR148.32 crores compared to INR16.57 crores in the previous quarter. Major reason for increases which is due to impact in reduction of operating charges of facilities pertaining to the previous quarters of the year and other in interest income. At annual level, we report that the standalone revenue for this year is INR343.88 crores compared to INR569.64 crores in the previous year.
The main reason for reduction in revenue is oil was sold during the previous year. Profit-after-tax for the year was INR147.47 crores compared to INR85 crores in the previous year. Major reason for increase in properties, reduction of operating charges of facilities pertaining to the previous quarters of the year and other interest income. In consolidated accounts, the revenue from operations for this quarter is INR59.58 crores compared to INR156.12 crores in the previous year quarter.
Total expenses in the consolidated accounts for the current quarter reached is INR64.9 crores compared to INR97.73 crores in the previous quarter. The decrease in cost is mainly due to start movement. In accounts, EBITDA for this quarter is INR61.86 crores compared to INR77.69 crores in the previous quarter. Consolidated profit-after-tax for the current quarter is INR51.06 crores against INR43.32 crores in the previous quarter.
At annual level, consolidated revenue for this year is INR459.12 crores compared to INR30.27 crores in the previous year. This was mainly due to the total IS sales from BAT block during the previous year. Consolidated profit before-tax for INR149.95 crores against INR248.29% in the previous year. The decrease is mainly on account of 100% participating interest in. Today, the term-loan outstanding is about INR81.67 crores. India ratingsan reaffirmed the rating in DA and revised outlook from stable to positive for INR500 crores loan. With the current position and with the continued production, we will meet all our obligations. Thanks and back from.
Jeevanandam — Managing Director
Thanks, and, and we can now open the forum for questions. Thank you.
Questions and Answers:
Operator
Thank you. Thank you very much. We’ll now begin the question-and-answer session. Anyone who wishes to ask a question may press RN1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press R&1 to one to ask the question. First question is from the line of Rawani from Sriji Finsir. Please go-ahead.
Rawani
Yes. Hi, sir. Good morning. My first question is regards to the field. Any update on the DNPL pipeline, which will lead to an increase in sales on the field?
Jeevanandam
We are expecting the DNPL line to be get connected and because you see, every time I commit something, I may be wrong. No, way incorrect. So — but we expect that it would be at least if the volume uptake should take place from the 3rd-quarter. Okay. And how confident are we that we get a share out there in that common carrier pipeline? See, that is actually Zee, this field we have only 27%, 44% is from oil India. So the value realization to both. So they will be using this line at least for about 1 million cubic meters.
Rawani
Okay. On the B80, any specific reason why the production was less for this quarter?
Jeevanandam
Which is actually where some vault was not functioning, so we have to shut it for a few days and very few days and when we got to open it up, small, small issues will come up and unfortunately that has happened in the last quarter. So that’s why the production will decline in-production. So we are continuously working on the and means to increase the production from these two wells. In the worst come, we will be going for a workover and get back to the — our intended capacity of those wells.
Okay. And you know, last year there was a cyclone and the production got affected. You know, understanding that there is no — nothing this around. We can expect a similar run-rate of 683 or 700 barrels per day of oil for this quarter. You can also understand that I can’t predict the monsoon, how severe, how actually. We are taking all. But the weather is worse, we have to disconnect and we have to shut-in.
Okay. Okay. And you know, on the 40% consolidation hasn’t been consolidated this quarter or when it will start to be affected on the — no, it’s a — it’s a done deal and it is 100% revenue is accounted in our books. 100% cost is taken over because we have taken over the income and the expenditure there on to it. And we are waiting for a formal approval from the government loans it will get capitalized and the value also would get recognized at the point in time.
Rawani
Okay. And how much have we paid-for this acquisition of the share.
Jeevanandam
So if you all put together it should be somewhere around 300 should be somewhere around INR310 crores or INR315 crores in the range of INR15 crore to INR320 crores. Okay, fair enough. Just last one, on the annual report of last year, we had a share in PY3 that was out there. This year, you know, ONDC came out with the notification that they have started, but our name was inside we sold the interest or anything. Any update on that? I don’t know about the press releases going on this, but the fundamental fact is we are holding 21% of the investment and all the investments below the ground belongs to us to the value of up to 21%. If any above the value which comes out of it and they are taking it right now, there is a legal notice have been issued.
And we will continue to pursue or participating in this in the block, we are now toward this stuff.
Rawani
Okay, okay. Fair enough. On the B80, we have a particular limit up to which we can store the oil post which we’ll have to sell. Is my understanding correct?
Jeevanandam
Yeah. So what is that limit up to which we can keep on storing the oil go up to say 850,000 to 900,000. A pretty long.
Rawani
Okay. Thank you, sir. Thanks.
Operator
Thank you. Next question is from the line of Jiten Parmar from Aurum Capital. Please go-ahead.
Jiten Parmar
Yeah.
Jeevanandam
I good morning most of the questions I wanted to ask have been asked by the previous participant the only question basically I want to know is rather regarding DiRock, if we get a connection and all that, we had talked basically guided in the past that we can do 40 I mean, FCD volume can we do that sometime this year, is it — do you think it is possible or we have to push those timelines? See if the line is getting connected and there is no issue on account of the demand, we can go up to 35 to 40 comfortably. And also we will be immediately starting the drilling of the Nard well and other development wells also to augment ourselves when the entire grid connectivity is linked to the national grid.
Okay. So we are fairly confident that we will get a pathway on the — on the pipeline, right? Yeah, I think it is everybody’s interest it is not only — we are only a small player there in there. There are many big guys are involved in that, so they have to get it done. Okay. Okay, great. Now regarding this B80 and B15, basically, we have — I mean, we have talked that we want to take it to, let’s say, 11,000 from Bombay high over the next two, three years.
Jiten Parmar
And do you — do you still think that is possible or what is the situation on that?
Jeevanandam
So we have to build the wells, we have to complete the workover that will give the correct numbers for the BAT. And B15, we are planning to build four wells. And after drilling the four wells, it’s — now both of these are 100% owned by us, we should be able to get into the target. But the KV at is we have to build interest.
Jiten Parmar
Okay. Okay. That will be all from my side. Thank you so much.
Operator
And thank you. Thank you. Next question is from the line of Ruchita Maheshwari from.
Ruchita Maheshwari
Please go-ahead. Hello. Hello. Yes, please. Yeah. Yeah. I just want to ask one question. As week rates have been on a declining trend. What is our sense on the oil expansion plans? Are we going to increase the expansion plan or what is — if you can throw some light on that front?
Jeevanandam
So the rig rates of offshores are coming down, but I’m sure there are not much reduction. But that’s what — that’s a window, we wanted to use it for drilling our wells, offshore wells. And already we have a contract for nine well drilling in Kashang, the same will continue for nine more wells after drilling 18 wells. So we have to look at further drilling there in the block and as well as in. So when — by when will you be taking this decision salary on drilling okay first one is completed second first or second one both are completed second one will get tested it is a continuous process every month we will drill on well
Ruchita Maheshwari
Okay got it okay thank you so much.
Jeevanandam
Thank you.
Operator
Thank you. Next question is from the line of Viraj from Money Grow. Please go-ahead.
Viraj
Hi, sir. Sorry, I’m just refreshing myself from the company after I have us I think something that has resumed production to 4,100 barrels per day is the oil and gas ministers just about and that’s expected to ramp-up to 7,500 barrels per day-in the next couple of years. Is that true? And would the economics of that accrue to you with your shareholders and what are potential plans going-forward?
Jeevanandam
So we have operations. So we have that the production currently coming out-of-the wells where we roll 21% participating interest. This is a legal issue now. So we have legal motive. We be coming into the additional resolution. Understood. So this is probably a couple of years of this legal process. No, no, it is an. How much time we take them.
Viraj
Okay. Understood. Are holding 20 odd percent in that well and it is producing, if you can confirm that at 4,100 barrels per day. I don’t know about the volume, which I have not referred to it. But the fact remains, we are holding urban person, effective participating in this in the whole field, which includes the four wells built and completed.
Jeevanandam
Okay, fantastic. Look, I will just encourage you to look at the treat of in Puril on this topic. So he mentions 4,100 barrels per day, rising to 7,500 by ’28 29. So then that should be the fact that I have no other information other than that.
Viraj
Yes. Okay, perfect.
Jeevanandam
Thank you.
Operator
Thank you. Next question is from the line of from Honesty and Integrity. Please go-ahead.
Unidentified Participant
Yeah, hi, sir. Thanks for providing the opportunity. So just to get more detail on the national connectivity. So this DNPL, so when you say connectivity, you mean to say DNPL should become a common career, right, which it is as of now, it is not the case, right? That’s what you mean, right? That’s right.
Jeevanandam
Yeah. So see, if I see Oil India itself has lot of assets in Assam and DNPL is effect — is basically effectively a JV of Oil India with Assam gas. Now Oil India itself is not able to get some online to make it DNPL common career. So how confident are we that actually it will happen in and because still be driven by oil India? Yeah. It will be driven by oil India, it will be driven by. It is driven by the national interest. So oil India is our gas is also 50% is oil India. There are gas right
No, so what I’m trying to understand is that where-is the problem because this has been getting delayed. So what is the argument Asam guess is giving not to accept it as a common carrier. So I’m sorry, I know my — I’m not knowing about the exact reasons for it. And what we have been pushing them, we have to get the line connected in a manner to evacuate the gas. Right. The evacuation of the gas comes with the demand increases. The demand increase is subject to the connectivity of the line.
Unidentified Participant
That’s all right. Okay. Okay, got it. And for, is primarily oil field, right, if I’m not wrong. Is it the bar gas fuel?
Jeevanandam
The gas is not being produced. Gas is not going produced. And for oil — for oil, how the oil is getting evacuated or we plan to get as you drill more-and-more well, how the oil will get evacuated from the? Oil is getting evacuated through the by AUC, say tankers.
Unidentified Participant
Okay, got it. That’s it from my side, sir. Thank you.
Jeevanandam
Yeah. Thank you.
Operator
Thanks. Thank you. Next question is from the line of Manan Patel, Individual Investor. Please go-ahead.
Manan Patel
Am I audible? Yes, Manhan. Thank you for the opportunity, sir, and congratulations for oil production from. Sir, the first — first question is, so are we planning to drill all these 18 wells during this year or like it will only be one-by-one?
Jeevanandam
Okay. So right now, we have as committed as contract, it is one-by-one. But at the same time, we’re looking into the possibility of getting one more rig, so as a reference, it will be owned by one. And if something happens within three to four months down the line, it may be two rigs per. And timeline for drilling one-well would be one month, right? So it’s about including cooking up and cooking up the production together, it will be about months. Otherwise each well will be about 21 to 20 basis. That’s, sir. Sir, second question is on the on the B15.
So what kind of capex do you expect in B15 and what would be the timeline, approximate timeline on that? Yeah. So see, we don’t want to commit something. It will be taking about minimum of two to 2.5 years, 30 months time. So we are in the process of in the drawing board to get to know what type of facility is to be installed, we don’t want to go for the subsea. The water is just 40 meters. We wanted to drill four wells and test those wells. And then is the next pile we would like to go, how to evacuate that. So it’s more or less like a discussion mode at the moment. So — but we endeavor to get it on production within 30 months.
Manan Patel
Okay. And sir, a follow-up on that. So do we have any synergies with BAT in terms of the assets that we already know put up in BAT. Only
Jeevanandam
Some synergy would be on the logistics side because two boats are with us and helicopter is there. That could be the only synergy. Other than that, our people synergy, that’s the only thing.
Manan Patel
Okay. And sir, the last question is, we have made some changes in the contract, how we — how we charge the fuel production in B80 and we have reduced some revenues during the quarter and for the year. So can you explain that?
Jeevanandam
Yeah. What is the rational is, see, what happens it is basically it gets — it’s having no impact to the HOEC is concerned because once more from consolidated to the standalone, that’s all the difference. And the reason for that because without, without B80 cannot survive. Without FSO, cannot survive. So it is actually a concept of mutually achieved survival. We don’t want to get into the concept of usually the section of insisting the same day rate. Even if it is a third-party conductor would have gone in the same mode and with a reduced oil prices. So what we have done, it should be change it from the day rate irrespective of the production, we linked to the raise the barrel of production.
The barrel of oil equivalent. So that is where the conceptual change we made it. This makes all the three assets are sustainable for a longer period. And when the production gets more after the workover after doing additional wells, then the value of these assets will get be picked-up. That’s the reason we have done this now like the revenue recognition?
Manan Patel
But I’m sorry, we are not able to hear you.
Jeevanandam
Hello.
Operator
Yeah, tell me.
Manan Patel
Yeah. So revenue recognition will be based on the production of B80. Is that understanding right?
Jeevanandam
Yeah, that’s right. But in either way, one-side, I charge one-side, it’s my revenue, one-side is my cost. It doesn’t make much of a difference to the consol of the JVC. Understood. Understood, sir. Thanks a lot and wish you all the best. Thanks,. Thank you.
Operator
Thank you. Thank you. I request to all the participants kindly restrict to two questions per participant and join the queue for a follow-up question. Next question is from the line of Mehul from. Please go-ahead.
Unidentified Participant
Sir, many, congratulations on acquiring 100% interest in BAT. Sir, my first question is on B15. I think in the previous answer, you mentioned that it will take about two, 2.5 years to get into production mode. So right now, what the update in the PPD is just a testing update so we won’t be getting any oil and gas in the — in this year, right?
Jeevanandam
So B15 is a block which has been drilled by ONDC. They made two discoveries. Now the two discoveries we have to develop by drilling wells and limited the facilities for evacuation, right? It cannot be just a quick process. So we have to build the four offshore wells. After drilling the wells, we have to test, we know what type of oil it comes out of it, whatever facilities are required for it and we have to do the economics thereon and then we will put it on production now. So it takes a time actually from discovery to development always take to five-six, six years, in this case already discovered by. So we are trying to use it and we’ll be able to get it done within about 30 months, 30 months plus.
Unidentified Participant
That’s all. Right, sir. Right, sir. Sir, my next question is around again from a follow-up question and discussion about 21% interest. Actually, I just joined a little bit later. What — which block are we talking about that we have the 21% and there is a legal suit which we have that PY3 that is an adjacent block PY1 that is that’s where the HOVC is having the 21% participating in this from 1994. Who is the remaining 79%? I think 79% is one company oil in — I think ONGC is 40% and the balance 39% is between the operator and Patrodine Limited..
Jeevanandam
Okay. So sir, we have gone into a legal matter. So is there any documentation available around this? What kind of legal CPS sides? So we are, we are the holder of the asset. We have put the money into that. We invested about INR385 crores and all our wells are drilled at our cost where we have contributed 21%. So we are — we are holding interest in the asset. So sir, are we an active partner there or can? Hello? That’s what I said. If I’m an active partner, I would have been answering this question, right? So we are getting into the legal process. So who’s that super explore. Here you can see the press release on that because I don’t have much prevail to what is done now.
Operator
Okay. Thank you very much. Request to come back for a follow-up question. I request to all the participants, please restrict to two questions per participant and join the queue again for a follow-up. The next question is from the line of Sanjiv from SKD Consultants. Please go-ahead., sir.
Sanjiv
Today, I would just request you to kindly update me about our consolidated account entries. So first thing I’m reading on the balance sheet is oil and gas assets, which I can understand. But what is other INR352 crores of rupees and what is other item other than oil and gas asset. Can I note that BP?
Jeevanandam
So just, which is that the capital work-in progress is — which is other assets yet. Other assets, okay, okay, I understand. Other assets is called mobile offshore processing unit that is an offshore installed platform of Rachu AC. And then I mean Rachu AC subsidiary company. And another — we have an afromax tanker which is converted into a floating storage offshore that is under the and we have got a single-point mooring system that is also belonged to us. T
Hat is — that is the value of those assets. Three assets.
Sanjiv
Got it, sir. And the capital work-in progress is the expenses that we incur for exploring our well, et-cetera or acquisition of certain assets. So what happens when we are in a continuous drilling mode, we have to buy some drilling stores and spares, which according to the new classifications that has to be treated as a capital work-in progress, right?
Jeevanandam
In addition, we are constructing a ship, which will be used for our PY1 that is also in capital working. So this majority is tokes and spash for drilling that will be converted into capital as and when consumed. And when the ship gets delivered, that will also move into other assets actually.
Got it, sir. The next cycle is there is small entry of INR10 crores of intangible assets in exploration. So I mean, are there some rights or something like that or some sort of intangible asset. So this intangible assets means we have got a block called ring sensed PSC to be signed along with the college field. That formal PSE is yet to be signed with the Government of India. So for that we paid an amount of about INR9 crores and that is worth.
Sanjiv
Okay. Okay. And then the next one is, sir, deposits under –
Operator
– sorry, Sanjeev, sir. So one thing, you have any queries on this, you can give me a call little later. I will answer all item by line-by-line thank you. Okay. Thank you. Thank you. Thank you very much. A kind request to all the participants, please restrict to two questions per participant. Next question is from the line of Sandeep Dixit from Arjav Partners. Please go-ahead.
Sandeep Dixit
Yeah. Sorry to. Not coming clear. Can you hear us? Hello, sorry, but your voice is breaking terribly. Can you come in a better reception area, please? Yes. Shall I try and come back-in the queue. Can you hear me now? This is better. You can go-ahead.
Okay. Thank you. Sir, I just one question. Last quarter, you had indicated that FY ’26 revenues could be INR1,000 crores and an EBITDA margin of 50%. Now given the — given the results that we saw in Q4, are we sticking with those estimates with those projections? What you could have seen, I cannot stick to the estimates in the sense because the reason for the dial has not been sold. Oil is stock. If the has been sold, it would have moved up, moved up to the revenue side, right? And second thing, the price is damning. You should be knowing the current oil price
Jeevanandam
Price is about $6 to $5 and the gas price is also coming down. So this is a factor of the — these are many importants which we cannot desert and control on it. It depends on the price actually and if the oil price is $80, we will be able to sell it and then you can see my top-line is much better than this.
Right. So may a small, sir. Given that the prices are outside of our control, but the volume of production is very much within our control, right, broadly. I mean assuming that the DRock gets connected and et-cetera, etc. So may I suggest that you probably could give guidance or some indication on the production volumes because I understand that we don’t have control over. Sandeep, I would like to tell you I have been this business for more than 40 years. In either way, I’ll be wrong. So better to give any guidance.
Sandeep Dixit
Okay. Okay. Thank you, sir. That’s my question. Thanks, sir. Thank you.
Operator
Thank you so much, Sandeep. Next question is from the line of Rakesh Roy from Boring AMC. Please ahead. Rakesh.
Rakesh Roy
Thank you. Yeah. Hi, this is Rakesh. I’m on your sir. Sir, my first question is regarding, sir, sir, any reason behind we have not sell our inventory due — only one of the reason is due to low prices or anything else I couldn’t get the question, means can you repeat? Sir, my question is for this quarter, generally we sell our oil inventory, sir. Still our oil inventory is INR390,000.
Jeevanandam
So the reason is only for a decline in oil prices or other — apart from. So we are hoping for a better price and we are not in a picking need to get it at a lower-price. So that is the reason we are waiting for hopefully something will happen. If it is a better price, we realize more than $70, $75, we’ll be able to sell it.
Rakesh Roy
Okay. Okay. Sir, related to the same question, sir. If we — if we assume the price will remain same for next eight month or nine months, then how you manage our investor, then if we go home, we will end-up the price and live with that? Right, sir. Okay. Okay, sir. Thanks. Thank you.
Operator
Next question is from the line of from Sirius Advisors. Please go-ahead.
Rakesh Roy
So the work of two rights in BAT we have. So that –, sorry, we are your audio. Can you speak little louder, please? Sure. Can you hear me now? Yeah. So now it’s better. Two after the workover of two in BAT. So this would mean production gets halted for a few months, right, while that process is going on?
Jeevanandam
I think once you do the workover, basically what will happen that we’ll pull out the tubings, whatever the blast zones and other things, we’ll recorporate and we’ll get a better production. So that is why we do the workover. And the other D2 well we may make is zone transfer, so that will give us a better results. That’s the purpose of workover. So this will take like one, two months, one, two months of stoppage. So it will be taking about at least 30 days to us. 15 days for each well should be there. So it should be around 30 days, say a month stoppage.
Okay, okay. And sir, the timeline for this for the drilling of three new wells and the workover? See, we are targeting first to start the well drilling in PY1. And once the monsoon get over in the Western region, then we would like to move the rig there. That’s our idea but we had to commit to the rig, which we will start doing end of June and then we will be making a program for it and schedule and trying to get the tangibles required for it. So all will — the planning started now. So we will let you know when we will be actually starting those wells.
Rakesh Roy
Got it. Got it. And sir, the current production for B80 is the same as the 4Q number?
Jeevanandam
I think this is at the same level actually 600 barrels or around about 5 million cubic-feet of gas, let’s it. But this will continue — we expect to continue at the same level.
Rakesh Roy
Okay. Okay. And sir, one question on the debt outlook that we are a net debt-free company, but now our production volumes are a bit lower and we are going to be starting a round of capex. So where do we see debt level happen by the end of this year?
Jeevanandam
See, our — we never wanted to have a debt more than 10% of our market cap. That’s the level we wanted to have it. So we will be looking somewhere around INR200 crores INR115 crores if we are not able to generate internally because all our programs as such it is on et-cetera and a deferred payment and so more or less it’s moving ahead with the one month — one month for each one. So in the process, we’ll try to manage all our onshore operations and in offshore comes, we may raise some debt and hasn’t been required and we have to rather we are talking to the bankers, some of them will be helping us at the lower the interest-rate, we are better for us.
Rakesh Roy
Thank you., I’ll request to come back for a follow-up question, please. Okay. Thank you. Thank you. I request to all the participants, please restrict to one question and come back for a follow-up. Next question is from the line of Manan, Individual Investor. Please go-ahead.
Unidentified Participant
Hello. Yeah. Hi, good afternoon. That’s one on. So sir, my question is relating to the current prices of crude oil. So what is the minimum price at which we can continue to operate? Because see the sale — the shale rigs in US has also started reducing because they say the minimum price should be $65, which they can operate. So what is the minimum price for us? Minimum price for us to survive all the three things, we are looking at least $55. Up to $55, we can keep going on it. And onshore is much lesser than that. I’m sure is we can surve even at $40. Okay. Okay. Okay. Thanks for that.
Jeevanandam
My second question is relating to accounting. See, in the consolidated financials, the interest charge in P&L is INR10 crores and INR59 lakhs, but the interest that is paid as per cash-flow statement is INR22 crores, INR68 lakhs. So may I know what is the reason for this difference in payment and the expense that we have recorded. So I think our loan is about INR265.
I do not know which or rushing it, I’ll just take it and get back to you. Is it okay,? Because loan to subsidiaries is about INR100, which number you are talking about? Interesting about the consolidated financials? Sorry,. Consolidated financial statements, yeah, but saying actually the adjustment, depreciation, tax expenses, exceptional interest income you are talking about, right? Interest expense you are talking about.
Operator
Manan, sorry to interrupt you. Can I request you to come back for a follow-up, please?
Unidentified Participant
No, this is a continuous question. I’m not doing any follow-up. So which number your interest you are talking about are in the same your finance cost, banks and financial institutions, INR10 crores, INR58 lakhs, as you can see in the consolidated for the whole year. Okay. I’ll come back to you, Banan. I don’t have an answer line I reply to it. It’s okay. I have to check the accounts and come back to you.
Okay. Okay, sure, sir.
Operator
Thank you. Thank you. Next follow-up question is from the line of Dhruv from CG Finance. Please go-ahead.
Unidentified Participant
Hello, sir. Just one follow-up question. You know, just BAP and, you are very well laid in the plan. But for this particular FY, taking and PY1 into consideration. What sort of oil production can we expect, say, probably in H2?
Jeevanandam
Because I understand you are drilling different wells at different points of time. So any timeline you can give that probably by Q3 you can expect this sort of production? Yeah. See every well the drill in-person, we will connect to the production that’s what our plan assets. What will be drilled that was given 200 barrels and that got connected to the production that has done within 30 days. Similarly the next well 30 days.
So every 30 days, we will argument the revenue thereon. So it will be more step-up the revenue growth, right, that is in the case of. PY1, we have got a pipeline, we have got processing facilities and all our land-up parent. I don’t need any surface facilities. I have to drill a well which should be producible. So that is the only thing. Once it gets drilled and if it is drilling is successful, each well we are targeting at least minimum of 5 million to 6 million cubic-feet per day. Okay. So on PY1, we don’t have an exact timeline by this quarter or anything like that. I told you now that we are waiting for the final report from, which would be expected by 30th of June, then We don’t have — we don’t require much of the tangibles if it is we are drilling the well through the platform. Suppose the location has to be changed and drill as a subsea well, then we need to some more tangibles. Accordingly, we will have a timeline worked out on most likely on end of June. Okay. So in next quarter, I would follow-up. So on, can we expect 200 barrels of oil at least for this quarter production in Q1 of 96? So with the new concern, concern each well is a different one. Once you drill, test and hook-up our production, we can give you the right volume. Before that it would not — it would not be fair on my part to guide you with some numbers.
Unidentified Participant
Okay, fair enough. Noted. Thank you.
Operator
Thank you. Next question is from the line of Sanjeev from SKT Consultants. Please go-ahead.
Sanjiv
Sir, I just want to know the note number three, other income includes interest on outstanding dues amounting to INR45.90 crores. So has it been received or it’s only a book entry? That is one. And secondly, sir, we have other income in the consolidated account on annual basis is INR76 crores and INR57 crore in the latest quarter. So can you give some more light about it?
Jeevanandam
And after two years, how much more payment we have to make to AEPL. If I could understand right, sir. JEPL has not been paid the cash costs for quite some time. The interest accrued on account of this is about INR45 crores INR46 crores and they have accepted this as a liability, we should be a part of the consideration adjustment. The outstanding liabilities and along with the interest that they have to pay, which is a part of the consideration, right?
In addition, we have to pay them on a deferred payment, which should be in the order of around INR137 crores for two years. Okay. INR137 crore will become due to them after all adjustments. Once that is INR137 crores would be the amount due to them payable by us. Out of that, we paid some portion of that amount and the balance assignment on the terms of the contract, we will settle it. Okay. So that means the total acquisition cost is somewhat higher than INR137 crores also. I mean more than that we have to.
That’s right. Right, right. And this is a deposit of INR80 crores. That is my last question. INR90 crore deposit is shown as in consolidated balance sheet as deposits under site restoration fund. So it is only a book entry only, sir. We are not obliged to give it to anybody else. A side fund means we have deposited that much money right. So that is in the bank. It will remain in bank and it is our own money. It is not anyone, but when the op — when we have to restore the site, then you have to use the funds for restoring it.
Sanjiv
Okay. Okay. Got it, sir. And if I need to contact you, I have to contact you at, sir. Yeah, anytime. You’re welcome. Okay. Thank you very much, sir. You are very kind. Thank you. And all the best luck. Thank you. Thanks, and thank you.
Operator
Thank you very much. Next question is from of from Ace Lamstone. Please go-ahead.
Unidentified Participant
So hi, am I audible? Yeah. Hi, hi. Just wanted to understand more the rationale of you know, not selling the oil that we have and the impact that would have if we sell it. So we are currently holding close to 400,000 barrels of oil. And our cost of production is lower than the current market price, right?
Jeevanandam
So even if we were to sell it, we would still be making a profit on it, right no, it’s not a question of the profit, just a question of the value. So I believe the value of the oil should be more than the current price. So we are holding on it. We have the capacity to hold-on it. So we continue to hold-on it till we get a better price. So what is our outlook for the crude oil prices for the year and until what price are we going to hold-on?
And what is our capacity also? How much oil can we hold? We can hold-up to say 900,000 barrels. Okay, currently only 400,000 barrels. We have got enough capacity to store the oil, but the price that same is known can predict correctly, only thing we can ask Goldman and I can’t say anything on it. Okay. So any sort of a benchmark above which price we will be willing to sell or you will kind of, you know see as the situation evolves from time-to-time.
Yeah. So I think we have to take the reference. I would like to sell it the — we would like to sell it to oil around $75, $75 per barrel. That’s our benchmark breaks for us. And if we are — anytime and we reach to that level, we will get it. We’ll get our. And once we hit our holding capacity with 900,000 barrels, then whatever price there is in the market, then we will have to. So it’s a dynamic process. When I’m in a travel, then I have to sell it, right? Yeah. I won’t set because of not selling the oil.
That’s correct. And okay. So we don’t have any outlook or we are — are you saying that we are kind of hopeful that the oil prices will go up during this financial year about $70, we are hopeful of that. And we have to accept the facts and live with that. We should accept the facts and live with that.
Unidentified Participant
Got it. It. So then eventually we may have to sell the oil at whatever market price is. Got it. It’s like a — it’s like a — it’s a zero collar hedging now. Sure. And but that would still give us some certain profit, right? It would still be above — no, actually no, it is — no, it is mark-to-market. I consider the profit in the every quarter new numbers. Okay, got it. Okay. Got it. Okay. Now just one more question regarding the gas. You know, you mentioned that there is no offtake of gas and because the demand is not there. And what are the reasons for that and how — and when can we expect the demand to come back?
Jeevanandam
See, the demand is not in our demand is the local demand right now. If it is moved from the Eastern region to the rest of the country, then the gas is a precise commodity because everyone needs it, right? Only the question is the connectivity. The connectivity get is to the Eastern grid to the national grid, then there you can pump it Eastern region, get sold at Western region. So that’s where the price stability also will come and we will get a better price and demand will be substantial. So the country is importing more than one Bcf of gas. So there should not be any issue on the demand. Only the question is the connectivity of the pipeline.
Operator
Thank you., I request to come back please. Thank you. Next question is from the line of Anova from Sirius Advisors. Please go-ahead.
Unidentified Participant
Sir, just to understand the capex timeline, so post June 1 is B1. Then we have B80 post the monsoon and DRock in 4Q, right, right? Yeah. And sir, on DRock, yeah, please go-ahead. Yeah, tell me. After on DRock, let’s assume the pipeline has hooked up and bandwidth, but the format carrier issue is not sorted-out. So — but then what is the impact?
Jeevanandam
Yeah. So the issue is actually which is a burning issue has been sorted-out because any pipeline which isn’t existing in the country, which they wanted to use it, they will be using it, right? So we cannot get a fact actually it will not be done or something will be done. It is taking time, that’s all. And so the second, if it’s connected over it, we can ramp-up our volumes or will that again take our for few months? No, no. There are five wells up to 40 million 35 to 40 million cubic, there should not be any issue.
But we are hoping that the line gets connected, there will be a demand picks up. So by the time to make ourselves ready, we are drilling the additional wells. So drilling will take place and after the follow day as a developing wells. Got it. So the drilling in DRock you will take-in 4Q will again take a few months and post that we can ramp-up to 40 and say to 50. No, no. 40 is not a problem to meet right now with the existing wells. To make it 40 to 70, I need to build the wells.
Unidentified Participant
Got it. Got it, got it. And sir, any — it’s a guess to make. Any rough numbers you can share what you expect from since the amount is quite material. No, see, thing is it is not advisable for me to give you a guidance on the numbers. I would like to build a well and once I test the wells and cook up the wells for production and then sales, then first thing I will come and inform to you. Fair enough, sir, fair enough. So just last question, the capitalization of the remaining 40%
Unidentified Participant
Of B80 on our books, is there any chance — is there any chance that moment of time we take — like we take an impairment or anything on those lines, given that production volumes have been lower than what you are expecting.
Jeevanandam
Thank you so much. It is a good question. It is not going to be an impairment. It would be going to be a fair-value increase. So that would be an will get reflected on the — as soon as the approval comes.
Unidentified Participant
Got it, sir. Got it, sir. Thank you, sir.
Jeevanandam
Thank you.
Operator
Thank you. Thank you very much. Ladies and gentlemen, during the opportunity of time, we’ll take that as the last question. I’ll now hand the conference over to the management for closing comments
Jeevanandam
Okay. Okay, thank you all. Yeah. Thank you all. We focus to complete the drilling of wells in both onshore and offshore to increase the production as well as increase the reserve base of the company. Our committed in-house team with the support of external experts will ensue to achieve our growth targets. We once again thank you all for joining us today. Thank you. Thank you very much.
Operator
Thank you. On behalf of Hindustan Oil Exploration Company Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you