Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successful testing of Sand 9 in the Dirok field, producing 6 million standard cubic feet of gas per day, which increases the field's potential recoverable reserves and production capacity.
- Dirok gas sales maintained at 0.55 Bcf for the last quarter, with condensate production at 10,578 barrels, indicating stable production levels.
- Plans to drill two additional producers in the Dirok field to ramp up production to 70 million standard cubic feet per day, preparing for potential increased demand.
- Secured environmental clearance for Cambay blocks after four years, with plans to start drilling two wells each in Asjol and North Balol, enhancing production potential.
- Capital program of about INR1,000 crores for the next three years to ensure sustained production with increased reserves and resource base, funded through internal accruals without borrowing for organic growth.
Negative Points
- Inconclusive test results for Sand 10 in the Dirok field, unable to flow hydrocarbon to the surface, indicating potential challenges in further prospecting.
- Revenue reduction in the BAT field due to a significant drop in gas prices from USD17.54 per MMBtu to USD10.34 per MMBtu, impacting overall financial performance.
- Production constraints in the Dirok field due to lack of demand, despite the field's capacity to produce about 50 million standard cubic feet per day.
- Operational challenges in the BAT field during the monsoon season, leading to production disruptions and the need for new hawser installations.
- Standalone revenue for the quarter significantly decreased to INR71.79 crores from INR254 crores in the previous quarter, primarily due to reduced crude sales from the BAT field.
Q & A Highlights
Q: Is there any approximate timeline on when we expect Assam to be connected to the national grid? And after it is, how much do we expect to be able to produce compared to how much we are producing right now?
A: As per the indication, it should be at least in the third or fourth quarter. We cannot confirm it because it is carried out by different agencies. If we get connected, we will be able to get back at least a minimum of 40 million cubic feet of gas, which can double from what we are doing right now. β R. Jeevanandam, Managing Director
Q: With regards to the B-80, are there any timelines when you're expecting the new hawser? And are there any risks associated with the reconnection of the hawser and the restarting of the wells?
A: We have already placed an order for the hawser and are expecting it within about 7 to 10 days. Once the hawser comes, if the weather is conducive, it is about less than a day's operation. β R. Jeevanandam, Managing Director
Q: On the borrowing limit increase, what kind of opportunities are you looking at, and what kind of oil service assets are you considering?
A: We are looking at a wide range of opportunities in the service sector. We have a company, Hindage, capable of operating the FSO, and our subsidiary, Geopetrol, can operate the Mobile Offshore Processing Unit. We are considering rigs, coil-tubing units, and other services where we can leverage. For our existing growth capital or upstream assets, we don't intend to borrow any money. β R. Jeevanandam, Managing Director
Q: How long has production been shut at B-80?
A: It's been about 14 days. We are waiting for the hawser to arrive, and assuming the weather permits, we will restart shortly. β R. Jeevanandam, Managing Director
Q: Can you clarify the revenue from Dirok and B-80 for Q1?
A: Dirok gas revenue for Q1 is about INR50.5 crores, and B-80 is about INR18 crores. Oil from B-80 is held in stock and will be sold once it reaches a threshold limit. β R. Jeevanandam, Managing Director
Q: Regarding the new wells for B-80, what is the timeline, and how many wells are planned?
A: We are looking at drilling three new wells in B-80 around 2026-2027. The capital outlay for these wells is about $50 million. β R. Jeevanandam, Managing Director
Q: On the Dirok assets, how are production trends or sales trends in the second quarter between July and early August?
A: The production trends are in the same line as the first quarter. There have been no significant changes. β R. Jeevanandam, Managing Director
Q: Can you throw some light on the Numaligarh refinery expansion and its impact on demand?
A: We expect the expansion to be completed around 2025-2026. Once the grid connectivity is established, there should not be any demand constraint. β R. Jeevanandam, Managing Director
Q: What are the potential inorganic opportunities you see, and what kind of investments are you looking at?
A: We are scouting for opportunities within India, except deep waters. We are looking at assets in the Discovered Small Fields and other blocks. If they come at good value, we will consider acquiring them. β R. Jeevanandam, Managing Director
Q: Regarding the environmental clearance for Kharsang, do you have any timeline for when it should come in?
A: We submitted the revised Environmental Impact Assessment Report on July 25. The Ministry of Environment will review it, and if cleared, we can proceed. Otherwise, they may request additional data. β R. Jeevanandam, Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
