Mr. Baroruchi Mishra – Managing Director & Chief Executive Officer
Mr. Allen Joseph Andrade – Chief Financial Officer
Mr. Cyril Paul from EY (Moderator)
Management Commentary & Strategic Priorities
HOEC described itself as being at a "pivotal inflection point" with a diversified portfolio of producing, development, and exploration assets.
The company's 3P reserves are stated to be over 100 MMBOE (Million Barrels of Oil Equivalent).
Strategic priorities are to maximize value from existing producing assets, accelerate monetization of discovered resources, and enhance operational efficiency.
The next 3 years are expected to be "transformational," with an active pipeline of over 20 wells in various stages of preparation, infrastructure expansion, and production ramp-up planned.
The management team has been strengthened with new hires:
Mr. Allen Joseph Andrade, CFO (40 years exp., ex-BG/Shell)
Mr. Sanjay Kundu, Head of Offshore Operations (30 years exp., ex-Shell/BG)
Mr. Parthasarathy Bandopadhyay, Principal Reservoir Consultant (30 years exp., ex-BG/PTTEP/Total/World Bank)
Mr. Krishnan Raghavan continues as Chief Technology Officer.
Operational Challenges in FY26
Delays in monetization initiatives (drilling, workovers) due to delays in commercial settlements for crude sales.
Infrastructure constraints, specifically pipeline evacuation issues in the East (Assam) limiting gas production.
Increased global energy costs affecting operational expenses (diesel, rig rates).
Asset-by-Asset Operational Update
B-80 Block (Offshore)
Described as a "flagship" and "strategically important" offshore oil asset.
2P reserves stated at 26 MMBOE, with only ~1 MMBOE produced to date.
Planned activities include:
Workovers on 2 existing wells (planned post-monsoon).
Production optimization via facility configuration changes to reduce suction pressure.
Drilling of 3 new wells.
Reservoir management improvements and facility debottlenecking.
Target production: 4,000 - 5,000 barrels of oil and 7.5 - 10 million SCF of gas.
Potential to become a major long-term cash flow generator. Existing infrastructure could potentially support other developments like B-15.
B-15 Block (Offshore)
Recently awarded by the government (MoPNG/DGH).
Represents an important future offshore growth project.
Currently in the Field Development Plan (FDP) maturation phase, assessing 2-3 development concepts.
Process involves stage gates: identify, assess, select, define, execute. Currently in the 'select' phase.
Next steps: Front-End Engineering Design (FEED), then Final Investment Decision (FID), then execution.
Long lead procurement activities are being worked on in parallel.
Target production: 4,000 - 5,000 barrels of oil and ~10 million SCF of gas.
PY-1 Block (Offshore)
A long-standing development project. Current production is significantly lower than initial potential.
Belief that full value can be realized through new drilling, reservoir activation, and production optimization.
Cited a technical assessment from PetroVietnam on a similar basement reservoir (White Tiger field) which yielded positive results on remaining potential.
Planned activities: Drilling of 2 new wells and coiled tubing interventions.
Target: Increase production to 12 - 15 million SCFs of gas.
Dirok Field (Assam, Onshore)
Field has strong reservoir quality with three zones (Girujan, Tipam, Barail).
Current production is 0.3 - 0.4 MMSCMD (Million Standard Cubic Meters per Day) due to pipeline constraints.
Historical production was over 1.0 MMSCMD. Wells are currently choked back.
Well potential exists to produce over 1.1 - 1.2 MMSCMD.
The key issue is evacuation pipeline infrastructure (DNPL pipeline). A 55 km section requiring replacement due to integrity issues has been laid but not yet connected.
Management is in discussions with Assam Gas Co., NRL, Oil India, and PNGRB to find a solution. A shutdown may be required for final connection.
Target: Increase production to 0.8 - 0.9 MMSCMD near-term if pipeline capacity is unlocked.
Longer-term, drilling of 3 more wells is planned to target 70 MMSCFD, dependent on the completion of the DFL to Duliajan pipeline in 2-3 years.
The field also produces 200-250 barrels of condensate per day at current levels, which could rise to 700-900 barrels with higher gas flow.
Kharsang Field
Described as a "good news" story and a large medium-term growth opportunity.
9 wells have been drilled, doubling production. An additional 9 wells are planned.
Surprise commercial discovery of significant gas volumes, for which evacuation plans are being figured out.
Current gross production is ~700 barrels of oil per day. Aiming to double production again with the new campaign.
Greater Dirok & Umatara Areas
Assets have important exploration and appraisal upsides.
Focus is on disciplined exploration, infrastructure-led monetization, and capital-efficient development.
An exploration well in North Dirok is planned, with an estimated potential of 10-15 million SCFs.
Cambay Assets (Gujarat)
Focus will be on workovers, production enhancement, secondary recovery, and low-cost incremental production growth by revisiting development philosophies.
Reserves Overview
1P Reserves (P90): ~40 MMBOE
2P Reserves (P50): ~60 MMBOE
3P Reserves (P10): ~109 MMBOE
Management stated the reserve value is USD 3-5 billion, depending on oil price.
Reserves certified by independent global agencies.
Upside potential is seen through improved recovery factors, infill drilling, production optimization, and infrastructure enhancement.
Production Growth Targets
Current Production: ~1,500 BOE/day, with an additional 400-600 BOE/day locked in due to infrastructure.
Target for 2027: 10,000 - 11,000 BOE/day
Target for 2028: 22,000 BOE/day
Target for 2029: 32,000 BOE/day
These targets are backed by planned drilling campaigns and reservoir studies.
Financial Performance (FY26)
Consolidated Revenue: INR 288 crores (compared to INR 344 crores in FY25).
The decrease was primarily attributed to the reversal of a sale to HPCL. Had that sale gone through, revenue would have been INR 559 crores.
Lifting Cost: $28.4 per barrel, consistent with the previous year ($28.6/barrel), cited as evidence of strong financial discipline.
Exceptional Item: A gain of INR 32 crores was booked due to the fair value adjustment on the acquisition of a 40% stake in the Adbhoot asset.
The balance sheet showed steady growth, reflecting the acquisition and an increase in participating interest in B-80.
Return ratios were reported at 4.5% and 2.5%, similar to the previous year.
HPCL Crude Sale Issue
A previous sale of crude to HPCL was reversed, and invoices were canceled by mutual agreement.
The crude (approximately 150,000 barrels) is stored at HPCL's facility.
HOEC is now reselling this crude to third-party buyers on an "as is where is" basis.
Trucks are currently picking up the crude weekly (300-700 tons per week). The entire process is expected to take 2-3 months to complete.
Pricing: Initial sales were at a firm price, later linked to "Brent minus X". The discount "X" was not disclosed.
Buyers have conducted quality checks and accepted the crude without requiring additional processing.
A conciliation process with HPCL is ongoing to formally close out the commercial dispute.
The tied-up value of this crude is approximately INR 260 crores.
Funding Strategy for Capex
Planned capital expenditure for drilling campaigns will be funded through a combination of internal accruals and debt facilities from banks.
The strategy will be underpinned by "sharp capital discipline" and maintaining flexible gearing ratios.
Management did not rule out equity fundraising but stated it was not the current focus.
Q&A Session Highlights
FY27 Production Target Split: Target of 10k-11k BOE/day by mid-2027 is underpinned by:
PY-1: 2 new wells + interventions targeting 12-15 MMSCFD gas.
B-80: 2 workovers + 3 new wells targeting 4k-5k barrels of oil + ~10 MMSCFD gas.
Dirok: Target to triple production to 45 MMSCFD gas, contingent on pipeline resolution.
Kharsang: 9 new wells aiming to double current gross production (~700 bbl/day).
Pipeline Constraints (Dirok): Resolution of the 55km DNPL pipeline section connection is a priority. Management is working with all stakeholders (OIL, NRL, AGCL) and hopes for a solution within 1-2 months. The pipeline has capacity for an additional 1.5 MMSCMD.
Rig Availability: Acknowledged as a challenge due to high oil prices and high global demand. HOEC plans to use two rigs simultaneously for different assets to avoid mobilization delays.
B-80 Contamination: Management clarified that recent well samples show "zero contamination," indicating reservoir quality is not the issue.
Inventory Valuation: The reversed HPCL crude inventory was valued at year-end using a discounted Brent methodology, factoring in expected downside risks on realization.
