Revenue growth masks profitability collapse and execution delays

Increased 12,300 to 17,400 BOE; realized $95.5/bbl oil, $12 MMBTU gas

Crude selling at 7-10% losses; only 15% sold; full liquidation by Oct-Nov 2026

Now targeted for December 2026; still 50-70% production from wells due to evacuation constraint

PAT declined 85.8% YoY; NPM fell to 4.6%; multiple execution delays; funding constraints

MD hedges to 8,900-13,000 range; multiple dependencies on rig, tubing, funding

Guided early FY27 (Apr-Jun 2026); now Dec 2026. DNPL hot tapping 16-20 weeks, floods in Assam delayed tender. Grid not live until Q4.

11k bbl/day target now 8.9k-13k range; MD admitted offshore uncertainties, tubing risks, well-by-well testing approach. No formal cut but much softer tone.

Marketed as resolution; now carrying 7-10% loss exposure (₹4-6 Cr on 15% sold). Monsoon delays, demurrage forces smaller shipments Oct onwards.

Rig scarcity pushed contingencies up; management says not all will be spent, but debt raise required. Facility model vs. hard commitment.

Rig award imminent, tubulars 1-2 months out, second 9-well program aligned. Doubling from baseline proceeding on track.

By December target. Assam Gas Company in discussion for hot taps, 16-20 month lead time. NRL 100m pipeline also needs hot tap. December is current expectation.

Crude stored in HPCL tanks, selling to third parties via tankers. Reversed sale in Mar-Apr. Speed slower than expected; expect end Oct/early Nov 2026 complete clearance.

15% sold with ₹4-6 Cr losses; estimated 7-10% overall loss on remaining inventory depending on Brent price. Jury still out till fully sold.

CFO: 'bit of a technical issue, don't want to give you this... inventory adjustment, profit petroleum adjustment, cost adjustment, sale adjustment.'

Single campaign: 2 workovers 10-20 days each, 3 wells 30-40 days each. By June 2027 three wells on production. By Nov-Dec 2026 two workovers on production.

Country needs gas, stakeholder pressure to align. Hot tap solution avoids NRL shutdown. Assam Gas Company taking on concept, vendors submitted procedures. Some things controllable, some not. Floods in Assam disrupted, but 16-20 weeks target.

Getting a rig for complete water-zone shut-off via physical intervention. 2P reserves still 26M, 1.5-2M produced, reserves remain. Will re-perforate, change zones. Offshore has uncertainties; targeting 1-1.5k bbl/well.

Rig scarcity, short supply. Oil prices rising, everyone wants to drill. Contingency increased but not all spent; draw on need basis. Raising debt to fund B-80 program.

Yes, blended. B-80 $16.5 MMBTU (exchange-traded IGX), Dirok $12.5 MMBTU (PPAC pricing). JV obligation to report; will provide detailed splits in next presentation.

Never shut down. Reconfigured compressor from parallel to series to handle lower suction pressure. Partial production now; should be 100% by end of month.

Fields approved by MOPNG. State informed for good practice but central govt is final arbiter. Explained clearance process and approvals to state. Hope not a big issue.

HPCL receivable ₹300 Cr was 'Black Swan' blocking workovers. Without it, would have drilled Q1 2026. Now in market raising funds. Could be 8.9k or 13k; that's the range based on technical work and prospectivity.

Scheme is for deepwater; HOEC in shallow water. Eligibility still being evaluated. Whether supports shallow water drilling is something we still need to understand.

Yes, we have.

By Q4 FY27 (Nov-Dec 2027), cash flows sufficient for B-80 and B-15 growth. For now, need debt raise. Some funding from own accruals, some from market debt.

Very low gearing at 0.04. Only ₹20 Cr loan from bank.

Cap related to asset integrity and pressure containment (90 bar max = 2.5 MMSCM/day). Currently degraded, operating 40-50 bar = 1-1.3 MMSCM. After hot tapping and isolation of degraded sections, full 90 bar restored.

Kharsang paying for itself, not a big issue. PY-1 rig-less from our books. B-80 dependent on debt. Drill first well, test deliverability, then go to 2nd and 3rd.

No, dependency is gas sales agreement (take-or-pay with GAIL/IOCL). Will only drill two new wells once have firm buyer. Learned from 15-year-old mistake: drilled, no buyer, wells watered out.

NRL made re-seller, DNPL common carrier. Can sell on exchange like B-80, don't need firm buyer. Could be done in 3 days. Route to national gas grid is all that's needed.

Don't have full answer on locked volumes of other operators. Our locked 0.5-0.7 MMSCM gross. Capacity will double from 1.1 to 2.5 MMSCM. 50-60 MMCF additional can flow. Should be able to sell all well stock gas.

10-20 days per workover if no stuck pipe. Looking at 500-800 bbl/well and 3-5 million scuffs/day from two wells.

Want to preserve long-term relationship. Already agreed position, HPCL cooperative, keeping crude. Going through conciliation with High Court Chief Justice appointed. Not willing to renege on agreed position.

24 km pipeline. Route survey tender closes tomorrow. 6-8 months route survey, then 6-8 months construction if all goes well. By Dec 2027 could be complete. Actual field laying 14-18 months worst case (forest, river crossings).

Depends on work program. If do more, need more cash. Not resting B-80, immediately going to B-15. Dirok will buy up balance sheet if produce all molecules. Will have better cash flow but not no-constraint.

DNPL hot tapping on critical path, 16-20 weeks, contractors awarded, field work in progress. NRL pipeline tie-in parallel. Floods in Assam caused delays; contingency in timeline.

Rig award imminent, mobilization Oct, workover 10-20 days each. Offshore execution risk (tubing stick, fish); MD acknowledged 'stuff happens.'

Contingent on debt raise, rig availability, drilling in difficult subsea setting. Logging and well-by-well de-risk approach. Offshore uncertainties always present.

Q1 showed severe margin compression (NPM 4.6%, OPM 2.8%) despite 45% revenue growth. HPCL crude losses 7-10% on inventory. Depletion and royalty heavy drag.

Rig scarcity forced contingency buffer; not all will be spent. Draw on need basis. B-80 program (workovers + 3 wells + pipeline tie-in) primary focus. Kharsang phase-2 self-funded.

Northeast Gas Grid connectivity now targeted December 2026 vs early FY27 (Apr-Jun) promised. Hot tapping lead time 16-20 weeks, field work ongoing, Assam floods caused disruptions. If further delayed, production ramp deferred into FY28.

B-80 D1 and D2 wells suffering high water cut, production impacted despite compressor reconfiguration. MD acknowledged 'stuff have been tried in past... some worked, some haven't.' Now relying on rig intervention to re-perforate and change zones. Subsea completion wells carry execution risk.

Q1 consolidated revenue ₹114 Cr (+45.2% YoY), but PAT only ₹6.2 Cr (-85.8% YoY). NPM compressed to 4.6%, OPM to 2.8%. Depletion ₹51 Cr, royalty/cess ₹15 Cr, stock adjustments ₹41 Cr drain profit. HPCL crude losses 7-10% on inventory hold. Investor specifically flagged: value not being created despite revenue growth.

B-80 crude (₹118k barrels) commingled in HPCL Chembur refinery tanks. Only 15% liquidated to date with ₹4-6 Cr realized losses. Expected overall loss 7-10% on remainder. Offtake slower than expected (monsoon delays, demurrage charges limit tanker economics). Full clearance now expected Oct-Nov 2026, not earlier. Cash tied up, mark-to-market volatility drag continues.

Individual investor Nishant Maheshwari explicitly challenged: 'from last three years we are constantly saying production will increase, production will increase, but as on date the production has drastically reduced from 2024 levels. That's −now how we can trust that 11,000 barrel per day production will be there in this company?' MD admitted: 'has not been delivered so far.' Trust eroded; guidance now heavily hedged (11k → 8.9k-13k range). Repeated project delays (Dirok, B-80) reinforce perception of weak execution.

Capex budget increased from Q4 due to rig supply scarcity and contingency needs. Company currently has only ₹20 Cr bank loan and low gearing (0.04). Will need to raise significant debt for B-80 workovers, 3 new wells, and pipeline tie-in ($50-100M+ estimated). Interest rate risk, lender appetite, and repayment discipline all material if oil prices weaken or execution delays absorb cash.

B-80 crude storage costs mounting as liquidation drags. Dirok will have technical capability to produce post-Dec 2026, but buyer availability uncertain; MD asserts can sell on exchange (like B-80) but market depth for gas sales may be limited. PY-1 learned lesson: 15 years ago drilled wells without buyer, kept shut, water overwhelmed zones. Now will NOT drill without firm take-or-pay from GAIL/IOCL.