Hindustan Oil Exploration Company (HOEC) surged 9.05% to Rs 213.25 after the company announced the commencement of oil production and gas sales from Block B-80.
Block B-80 is spread over a 56 square kilometer area in Western Offshore and was awarded under the first discovered small field (DSF) bid round 2016 on 27 March 2017.
HOEC is the operator of this field with 60% participating interest and the remaining 40% is held by Adbhoot Estates. Under the terms of the revenue sharing contract (RSC), the oil and gas produced from this block enjoys marketing and pricing freedom.
HOEC is that both the wells D-1 and D-2 have been individually brought online for production after successfully addressing the technical issues faced during pre-commissioning operations. Gas sales to Gujarat State Petroleum Corporation (GSPC) commenced from ONGC's gas processing terminal at Hazira.
Prior to the commencement of sales, gas produced from well D-2 was processed to meet the specifications and packed into the ONGC pipeline from 31 May 2022 onwards. Subsequently, the gas transportation agreement (GTA) between ONGC and HOEC was executed on 03 June 2022.
Currently, D-1 Oil well on production is being flowed at lower rates for safe stabilization of all operational parameters. Produced oil is being transferred through the pipeline to a HOEC group-owned floating storage offloading vessel (FSO). The FSO has the capacity to store over six months of production.
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Processed gas is being exported through the ONGC pipeline network to its Hazira gas processing terminal. ONGC then redelivers B-80 gas into the Hazira-Vijaipur-Jagdishpur (HVJ) pipeline owned by GAIL. GSPC then offtakes the B-80 gas to deliver it to the end consumers through its vast pipeline network.
"We expect the entire production and sales operations to stabilize over the next few weeks, the company said in a statement.
HOEC is the first Indian private operator to complete a green field development in Mumbai Offshore Region. B-80 has earned the distinction of being the first offshore field on production, under the discovered small field (DSF) policy of the Government of India with a revenue-sharing model.
Hindustan Oil Exploration Company is engaged in the exploration and production of hydrocarbons crude oil and natural gas, which are natural resources. The company provides geological and geophysical services relating to the exploration of oil and natural gas and other oil field services. The company has a 100% subsidiary namely HOEC Bardahl India Ltd which is engaged in marketing of fuel or engine additives.
The company reported a consolidated net loss of Rs 27.21 crore in Q4 FY22 as against a net profit of Rs 21.20 crore in Q4 FY21. Sales during the quarter rose 46.46% YoY to Rs 42.21 crore.
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