Hindustan Oil Exploration Company Ltd Q3 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- Plans to drill 15 development wells and 1 exploration well in Kharsang; expected capex about ₹160 crores next financial year and ₹540 crores in 25-26.
- Production ramp-up expected after pipeline connections (DNPL, IGGL) with limitations easing by 2024-26, enabling gas production up to 40 mmscmd and potentially 70 mmscmd once connectivity to national grid is complete (March 2026).
- Dirok well production expected to increase with two more wells planned; however, actual volume depends on demand and pipeline capacity.
- B-80 field production currently about 800 barrels/day from one well; second well work expected post-Baker Hughes intervention.
- Total oil sold recently at approx. 430,000+ barrels; inventory of around 35,000 barrels remaining.
- Overall revenue growth linked to increased production from Kharsang, Dirok, B-80, and successful exploration/onshore drilling projects over next 2-3 years.
- Company targets IRR above 21% post-tax with a total planned capex of ₹1000 crores over 3 years.
See what Hindustan Oil Exploration Company Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
- The company has outstanding loans of Rs.87.55 crores (standalone) and Rs.69 crores (subsidiary).
- It holds an "A" stable rating for a Rs.500 crores bank loan from India Ratings.
- Management stated that with the current cash position and continuous production, the company will meet all obligations, including proposed work programs for the next three years as planned.
- There is no explicit mention of new fundraising through debt or equity in the provided transcript.
- Capital expenditure plans totaling about Rs.1000 crores over the next three years are intended to be funded through internal accruals and cash flow.
- The company prefers projects with a post-tax IRR of at least 21%.
See what Hindustan Oil Exploration Company Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- Planned Capex of approximately Rs. 1000 crores over the next three years.
- For FY 2024-25: Rs. 160 crores allocated for drilling 15 wells (14 development + 1 exploration) plus 6 well interventions.
- FY 2025-26: Planned programs include PY-1 drilling, 2 additional wells in Dirok, and 2 deep wells in Kharsang with a budget of Rs. 540 crores.
- FY 2026-27: Plan to drill 3 development wells in B-80.
- Capital investments are success-driven and discretionary.
- First well in ongoing projects costs about $10 million, supporting further investments.
- Ongoing continuous drilling programs in Kharsang targeting minimum 15 wells over next two financial years.
- Strategic investment in well intervention and infrastructure upgrading, including collaboration with Baker Hughes for reservoir treatment in B-80.
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