Hindustan Oil Exploration Company Limited (HOEC) has issued a clarification regarding concerns raised by Hindustan Petroleum Corporation Limited (HPCL) about the quality of crude oil supplied from its Block B-80 field. This development comes in response to an intimation submitted by HPCL to stock exchanges on October 27, 2025.

Key Details of the Crude Oil Supply

HOEC's Response

HOEC has stated that the indicative quality mentioned in the contract was based on a crude assay by an independent approved laboratory, dated July 12, 2025. The company emphasized that:

1. The reported contamination is currently under examination.
2. No loss, damage, or claim is attributable to HOEC under the terms of the agreement.
3. HOEC plans to engage in discussions with HPCL to address the issue.

Historical Context

HOEC highlighted that it has previously supplied substantial quantities of crude oil from Block B-80 without any quality issues. This context suggests that the reported high chloride content may be an isolated incident.

Sampling and Analysis Process

HPCL's quality concerns stem from their own sample analysis:

• Samples were taken by HPCL's surveyor at the offloading port in the B-80 field during the offtake.
• The analysis was subsequently conducted by HPCL, revealing the high chloride content.

Implications and Next Steps

While the situation is still developing, it's important to note that HOEC is taking a proactive approach by:

1. Examining the reported contamination.
2. Planning discussions with HPCL to resolve the issue.
3. Maintaining transparency by promptly informing stakeholders through stock exchange disclosures.

As the situation unfolds, investors and industry observers will likely keep a close eye on how this quality concern is resolved and its potential impact on future agreements between the two companies.

Hindustan Oil Exploration Company Limited (HOEC) has reported a mixed bag of results for the first quarter, with increased production volumes but lower revenue compared to the previous year. The company's strategic moves and operational highlights paint a picture of growth and challenges in the oil and gas sector.

Production Growth

HOEC witnessed a significant increase in its gross production, which rose to 6,369 barrels of oil equivalent per day (BOEPD) in Q1, up from 5,458 BOEPD in the previous quarter. Net production also saw an uptick, reaching 2,777 BOEPD compared to 2,665 BOEPD in the previous quarter.

Financial Performance

Despite the production growth, the company's consolidated revenue from operations decreased to ₹78.65 crores, down from ₹136.15 crores in the same quarter of the previous year. However, net profit showed a positive trend, increasing to ₹43.87 crores from ₹41.92 crores year-over-year. This profit surge was notably boosted by exceptional items worth ₹32.52 crores.

Operational Highlights

B-80 Block

• HOEC now holds a 100% participating interest in the B-80 block, up from 60% previously.
• Production was disrupted in mid-June due to monsoon conditions, with operations resuming in August.
• The company plans to conduct workover of the D1 well and drill new wells to improve production.

Dirok Field

• Average production stood at 20.22 mmscfd of gas and 364 bpd of condensate.
• Gas prices averaged $7.56/mmbtu, down from $8.45/mmbtu in the previous quarter.

Kharsang Field

• Completed drilling of four wells, with three already hooked up for production.
• The new wells have enhanced oil production by 350 barrels per day.

B-15 Block

• HOEC signed a Revenue Sharing Contract for the B-15 block with 100% participating interest.
• Development plans are underway for drilling 4 wells in this block.

Strategic Developments

The company is focusing on rapid development of discovered resources and has a strong presence in key petroleum provinces across India. HOEC is leveraging its offshore operating edge and captive service assets to seize growth opportunities in both offshore and onshore sectors.

Future Outlook

HOEC is planning several initiatives to boost production and explore new opportunities:

• Drilling additional development wells in the Dirok field.
• Redevelopment of the PY-1 field with plans to drill new wells.
• Continuing the 18-well drilling program in Kharsang.
• Exploring deeper prospects in various blocks.

The company's strategy aligns with its goal to create long-term stakeholder value while growing responsibly, with a focus on stakeholders, community, and the environment.

As Hindustan Oil Exploration navigates through the challenges and opportunities in the oil and gas sector, its increased production and strategic asset acquisitions position it for potential growth, despite the current revenue headwinds.