Hindustan Oil Exploration Company Limited has updated the operational status of Block B-80, confirming that the compression configuration on the Mobile Offshore Processing Unit (MOPU) has been changed to allow lower suction pressures. A test run of the compressors in this new configuration has been started, with partial gas sales now underway. The company made this disclosure pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on August 13, 2026.

Block B-80 operational update

The commencement of the compressor test run marks a key step in HOEC's strategy to optimize production at its offshore asset. These developments follow the company's earlier plan to modify compressors to reduce suction pressure and switch generators to run on gas instead of diesel. Production from Block B-80 stood at 605 BOEPD in Q1FY27, compared to 377 barrels of oil and 2.8 Mmscf of gas in Q4FY26.

The company is also addressing a dispute with HPCL regarding a cargo of approximately 417,000 barrels supplied in August 2025, which contained organic chlorides. HOEC has cancelled the sale invoice and is reselling the oil to third parties, with completion expected by late October or early November 2026. Workovers on two subsea wells are planned for Q3FY27, followed by drilling three new wells in Q4FY27, with estimated capex for FY27 at USD 45 million.

Offshore operations

In the Cauvery Basin, Block PY1 produced 61 BOEPD in Q1FY27, with gas output rising slightly to 0.3 MMCSF from 0.26 MMCSF in Q4FY26. A booster compressor order has been placed to mitigate back pressure from GAIL lines, with installation targeted for October 2026. Two directional wells are planned for drilling by Q4FY27 or Q1FY28.

Onshore updates

The Kharsang block in North East India showed significant oil production growth, with gross production increasing from 325 BOPD to 726 BOPD following a nine-well campaign in FY26. Gas potential from three tested wells, ranging from 3.4 MMSCFD to 8.6 MMSCFD, remains shut-in pending evacuation plans. HOEC plans to drill nine additional development wells in FY27.

In the Dirok block, gas production stood at 15.424 MMSCFD and condensate at 280.32 barrels per day in Q1FY27, up from 13.43 Mmscf and 251.00 barrels in Q4FY26. The revised Field Development Plan has been approved, extending the block till 2035, with the Production Sharing Contract extension expected to be signed by August or September 2026.

Cambay basin blocks Asjol and North Balol reported modest production of 9 BOEPD and 66 BOEPD respectively in Q1FY27. In Palej, installation of a thermic fluid heater increased production by 20%, with workovers and sucker rod pump installations planned to enhance output further.

Key production metrics

The following table summarises Q1FY27 production across HOEC's key blocks:

What the numbers show

The commencement of a compressor test run with partial gas sales at Block B-80, alongside the MOPU reconfiguration for lower suction pressures, signals incremental operational progress at the company's key offshore asset. Meanwhile, the divergence between Kharsang's oil production ramp-up and its shut-in gas volumes highlights an infrastructure bottleneck. While oil output doubled, significant gas reserves identified in recent tests remain unmonetized, indicating that near-term revenue growth from this asset will depend on resolving evacuation logistics.

Hindustan Oil Exploration Company Limited reported a sharp decline in profitability for the quarter ended June 30, 2026, with consolidated net profit falling to ₹623.55 lakh from ₹4,387.35 lakh in the corresponding quarter of the previous year. On a standalone basis, net profit declined approximately 74% YoY to ₹1,253.72 lakh from ₹4,821.13 lakh. The contraction in earnings came despite a significant rise in top-line revenue, as higher operational costs and inventory adjustments weighed heavily on margins.

Financial performance at a glance

The following table summarises key consolidated and standalone financial metrics for the quarter:

Consolidated revenue from operations rose to ₹12,400.55 lakh from ₹8,550.37 lakh in Q1FY25. The consolidated segment results showed profit before tax at ₹655.16 lakh, compared to ₹4,473.97 lakh in the corresponding quarter of the previous fiscal year. The group includes subsidiaries Hindage Oilfield Services Limited and others.

What the numbers show

A notable divergence exists between revenue growth and bottom-line performance. While standalone revenue expanded over 40%, net profit contracted sharply. Standalone total expenses rose to ₹11,445.07 lakh from ₹6,628.28 lakh, with the change in inventory of crude oil and condensate standing at ₹4,094.54 lakh this quarter, compared to a negative ₹1,522.36 lakh in the prior year period, indicating a reversal of inventory benefits. Share of expenses from producing oil and gas blocks decreased to ₹4,525.39 lakh from ₹5,580.31 lakh, while royalty and cess payments rose to ₹1,294.27 lakh from ₹1,212.80 lakh. Other income contributed ₹1,936.69 lakh to total income, up from ₹537.47 lakh, partly due to a differential gain of ₹230.80 lakh recognised from the final fair valuation exercise of the additional 40% participating interest in Block B-80. The consolidated EBITDA margin contraction to 2.56% from 37.62% underscores that core operational efficiency eroded significantly, with inventory build-up costs outweighing revenue gains.

Board approvals and corporate actions

During its meeting on August 12, 2026, the Board of Directors approved several corporate actions:

• An increase in borrowing limits not exceeding ₹10,000 crore under Section 180(1)(c) of the Companies Act, 2013, subject to shareholder approval at the ensuing AGM.
• An increase in the threshold for loans, guarantees, securities, and investments under Section 186 of the Companies Act, 2013, up to ₹300 crore, also pending shareholder approval.

The unaudited financial results were reviewed by statutory auditors B S R & Co. LLP, which issued an unmodified review report. The results have been filed with the National Stock Exchange of India Limited and BSE Limited.