Vedanta Oil and Gas Limited reported a consolidated net profit of ₹945 crore for the first quarter ended June 30, 2026, marking a significant turnaround from the net loss of ₹104 crore recorded in Q1FY26. Revenue from operations grew 9% year-on-year to ₹2,507 crore, while EBITDA rose 16% quarter-on-quarter to ₹1,232 crore, reflecting improved commodity price realizations and disciplined cost management. The positive bottom line was driven largely by an exceptional gain of ₹1,056 crore arising from the slump sale of discontinued operations, including the power, nicomet, and coke businesses, which outweighed a ₹379 crore impairment charge against assets related to the Cambay Block (CB-OS/2). The Board of Directors approved the unaudited financial results on July 29, 2026, and the financial statements reflect the impact of the Scheme of Arrangement approved by the National Company Law Tribunal (NCLT), Mumbai Bench, effective May 1, 2026, under which the Oil and Gas Undertaking of Vedanta Limited was demerged into Vedanta Oil and Gas Limited.

Financial Performance Highlights

The company's consolidated financial results for Q1FY27 reflect strong EBITDA expansion and a return to profitability. The EBITDA margin stood at 49%, up 20% quarter-on-quarter. PAT before exceptional items was ₹194 crore, while cash and cash equivalents stood at ₹1,126 crore. The company holds a credit rating of AA+. The following table summarises the consolidated income statement:

On a standalone basis, Vedanta Oil and Gas reported a net profit of ₹695 crore for Q1FY27, compared to a net loss of ₹332 crore in Q1FY26. Standalone revenue from operations was ₹1,447 crore, up from ₹1,395 crore in the prior year. The standalone exceptional gain from discontinued operations was ₹1,056 crore, while the impairment charge and demerger-related costs resulted in an exceptional loss of ₹441 crore from continuing operations.

EBITDA Bridge Analysis

The sequential improvement in EBITDA was primarily driven by favourable commodity prices. The EBITDA bridge from Q4FY26 to Q1FY27 shows that a price tailwind of ₹368 crore lifted the re-based Q4FY26 EBITDA to ₹1,425 crore, partially offset by a volume headwind of ₹(216) crore, a cost benefit of ₹50 crore, and other adjustments of ₹(28) crore, resulting in Q1FY27 EBITDA of ₹1,232 crore. On a year-on-year basis, price contributed ₹410 crore, lifting the re-based Q1FY26 figure to ₹1,682 crore, while volume declined by ₹(266) crore and other adjustments were ₹(228) crore, with cost savings of ₹44 crore.

Production Highlights

The company reported an average gross operated production of 77.7 kboepd in Q1FY27, down 17% year-on-year from 93.2 kboepd and down from 81.5 kboepd in Q4FY26. Average working interest production stood at 51.1 kboepd. Total gross oil and gas production for the quarter reached 7.1 million boe, while total working interest production stood at 4.7 million boe. The Rajasthan block, the company's most prolific production asset, recorded average daily gross operated production of 63.1 kboepd. Block-wise production details are as follows:

Cambay matter is sub-judice and under dispute.

Average oil price realization improved significantly to $99.70/bbl in Q1FY27 from $65.60/bbl in Q1FY26, a 52% increase, supported by Brent crude averaging $104.50/bbl versus $67.80/bbl in the prior year period. Gas realization stood at $18.50/mmscf compared to $13.70/mmscf in Q1FY26.

Operational and Legal Developments

The company notified a gas discovery in the Kaam BCP-1ST well, drilled as part of the Deep Gas exploration campaign in the Kameshwari-Graben area of the RJ-ON-90/1 block in the Barmer Basin in Rajasthan, and will undertake detailed technical and commercial evaluations. In the Rajasthan block, the quarter saw successful well productivity improvement interventions in Mangala, targeted well recovery in satellite operations, and three wells brought online with five drilled. Offshore assets benefited from a partial shift to low-pressure operations improving well deliverability, while OALP blocks continued stable operations across Jaya and Hazarigaon. The transfer of the Power and Nicomet Business to Vedanta Limited and the Coke Business to Vedanta Iron and Steel Limited was completed on April 30, 2026, for an aggregate consideration of ₹504 crore. The Ministry of Petroleum and Natural Gas (MoPNG) granted approval for the demerger on July 24, 2026, subsequent to the quarter end. Pending final consent for the transfer of participating interests, Vedanta Limited held the relevant assets and contracts in trust for Vedanta Oil and Gas Limited from the appointed date of May 1, 2026.

The company holds interests in 44 blocks spanning over 47,000 sq km across India, with gross 2P and 2C resources of 1.4 bnboe. Its producing assets are located across the Rajasthan, Andhra Pradesh, Gujarat, and Assam basins.

Management Commentary

Jim Johnny Gast, Interim CEO and Whole Time Director, commented: "Q1FY27 marked a defining milestone in our journey with the company's listing on the BSE and NSE. The quarter's performance reflects the resilience of our business and our focus on operational excellence, exploration success with Deep Gas discovery, and disciplined capital allocation. As we advance a strong pipeline of near and medium-term growth opportunities including exploration drilling, enhanced oil recovery (ASP), and infill development campaigns aimed at arresting decline and enhancing production and resources, we remain well positioned to drive sustainable growth and create long-term value for all stakeholders."

Arpit Mundra, Chief Financial Officer, added: "We delivered a strong Q1FY27 performance, driven by favourable commodity prices, healthy realizations, and strong operational discipline. Our focus on cost efficiency and value maximization enabled us to translate a supportive pricing environment into strong financials, while continuing to invest in future growth."

ESG and Safety Performance

On the safety front, the Lost Time Injury Frequency Rate (LTIFR) stood at 0.13 and the Total Recordable Injury Frequency Rate (TRIFR) at 0.65 in Q1FY27. The company achieved renewable power sourcing at a 40+ MWh run-rate, with 124 kTCO₂-eq. emissions avoidance, and processed approximately 12 kbbls of waste and sludge. Community outreach reached approximately 0.6 million beneficiaries, and approximately 1,000 students were supported through career counselling and vocational training. The company was awarded India's Best Workplaces, Oil & Gas 2026 by GPWI.

Vedanta Oil & Gas Limited disclosed on July 23, 2026, that its promoter group entities have executed a $2,250,000,000 facility agreement, resulting in an encumbrance over 56.38% of the company’s total share capital. The agreement, dated July 20, 2026, was entered into by Twin Star Holdings Ltd as the primary borrower, with Vedanta Resources Limited, Vedanta Holdings Mauritius II Limited, and Welter Trading Limited acting as guarantors. This financial arrangement imposes significant covenants on the listed entity, restricting its ability to create security over assets or engage in certain corporate actions without lender consent, thereby impacting its operational flexibility.

Facility Structure and Lenders

The facility is structured with a total maximum commitment of $2,250,000,000. As of the disclosure date, the commitment from original lenders stands at $1,545,000,000, with an additional increase commitment of up to $705,000,000 available through increase lenders. GLAS Agency (Hong Kong) Limited serves as the agent and security agent for the transaction.

The arrangers and original lenders include a consortium of global financial institutions:

Encumbrance Details

The encumbrance covers 2,204,724,753 equity shares, representing 56.38% of the total share capital. This follows previous disclosures regarding encumbrances linked to guaranteed senior bonds issued by Vedanta Resources Finance II PLC and earlier facilities availed by Twin Star Holdings Ltd. The shareholding breakdown of the promoter group entities subject to this specific encumbrance is detailed below:

Restrictions and Covenants

The facility agreement imposes strict covenants on Vedanta Oil & Gas Limited, categorized based on their effective dates:

Identified Clauses (Effective from First Utilisation Date): If Vedanta Oil & Gas becomes a Material Subsidiary of Vedanta Resources Limited, restrictions apply to:

• Creation of security over assets or shares.
• Sale or disposal of assets outside the ordinary course of business.
• Investments in businesses not associated with mining, metals, coal, oil and gas exploration/production, infrastructure, power, or energy.
• Any merger involving the company.
• Encumbrance or restriction on distributions within six months of becoming a Material Subsidiary.

General Restrictions (Effective from Execution Date):

• Entering into material contracts or arrangements with related parties unless on arm’s length terms and in the ordinary course of business.

Proceeds from the facility are designated for repaying financial indebtedness of the Vedanta Resources Limited group, paying fees and costs, and general corporate purposes. The agreement explicitly prohibits using proceeds to finance or refinance thermal coal infrastructure, violate anti-bribery laws, or remit funds to India. No direct liabilities have been imposed on Vedanta Oil & Gas Limited itself, but the encumbrance affects the promoter group's control and strategic options for the listed entity.