Hindustan Oil Exploration Q1 FY27: Production Growth, New Drilling Plans and Key Asset Updates

Hindustan Oil Exploration Company Limited (HOEC) has outlined several operational and financial developments in its Q1 FY27 investor presentation, with a focus on production enhancement, drilling activity, infrastructure expansion and development of its oil and gas assets.

The company’s key assets include B80 and B15 in Mumbai High, PY1 and PY3 in the Cauvery Basin, Dirok and Kharsang in the North East, and several assets in the Cambay Basin.

HOEC Q1 FY27: Key Highlights

HOEC’s Q1 FY27 consolidated revenue from operations stood at ₹124.01 crore, compared with ₹85.50 crore in Q1 FY26.

Total income was ₹134.34 crore, while consolidated profit before tax stood at ₹6.56 crore.

Consolidated net profit for the quarter was ₹6.24 crore.

The company reported basic and diluted EPS of ₹0.47 per share.

B80: Workover and New Wells Planned

B80, located in Mumbai High, is one of HOEC’s key offshore assets. The company has a 100% participating interest in the block.

Q1 FY27 production from B80 stood at 605 BOEPD, with reserves of 35.48 MMBOE as of July 1, 2026.

HOEC plans to undertake workovers on two existing subsea wells in Q3 FY27, followed by drilling of three new wells in Q4 FY27.

The company expects capital expenditure of approximately USD 45 million for B80 during FY27 and is discussing funding options.

Production enhancement initiatives include compressor modifications, reduction in diesel consumption through gas-powered generators and other offshore facility improvements.

HPCL Crude Sale Dispute

HOEC has also provided an update regarding its crude sales dispute with HPCL.

The company said the issue relates to a single cargo event involving approximately 417,000 barrels of crude supplied in August 2025.

HOEC has agreed to cancel the invoice to HPCL and resell the crude to third parties. The company expects the entire quantity to be sold by the end of October or early November 2026.

The presentation stated that approximately ₹260 crore of sales revenue had been held up because of the dispute, which affected the timing of planned investments in well drilling.

B15 Development Plans

HOEC’s B15 block is also located in Mumbai High and is 100% owned by the company.

The block has reserves of approximately 16 MMBOE as of July 1, 2026.

The company is currently preparing the Field Development Plan, with drilling expected to commence in FY28.

Kharsang Production Ramps Up

Kharsang in Arunachal Pradesh is another important asset for HOEC.

The company holds a 35% participating interest in the block.

During FY26, HOEC drilled nine development wells, comprising six oil wells and three gas wells.

Gross production increased from 325 BOPD to 726 BOPD.

HOEC plans to drill another nine development wells in FY27, consisting of four firm wells and five wells under maturation.

The company is also evaluating an exploratory well.
The newly drilled wells have shown good gas potential, although gas evacuation arrangements are currently under discussion.

Dirok Production Constrained by Gas Evacuation

HOEC holds a 27% participating interest in the Dirok block in Assam.

Q1 FY27 production stood at approximately 15.424 MMSCFD, with reserves of 226.04 BCF as of July 1, 2026.

A major issue for Dirok is limited gas evacuation infrastructure.

The company said production is currently constrained because the available evacuation infrastructure is insufficient.

The revised Field Development Plan has been approved, securing the block for 10 years until 2035.

HOEC is also working with stakeholders to improve gas evacuation capacity and is progressing development drilling plans.

PY1: Booster Compressor and New Wells

HOEC’s PY1 asset is located in the Cauvery Basin, where the company has a 100% participating interest.

Q1 FY27 production was 61 BOEPD.

The Production Sharing Contract has been extended until October 5, 2030.

HOEC has placed an order for a booster compressor to increase gas sales. The compressor is targeted for installation in October 2026.

The company is also preparing for drilling two additional wells, with drilling expected to begin around Q4 FY27 or Q1 FY28.

Block-19 Exploration Plans

HOEC’s Block-19 is located in the Assam-Arakan Basin and is fully owned by the company.

The block has reserves of approximately 27 BCF.

The company has obtained an extension for its Initial Exploration Phase until December 2027.

HOEC plans to drill its first exploration well during Q4 FY27 or Q1 FY28.

Umatara Development Continues

HOEC has a 10% participating interest in the Umatara block, operated by Indian Oil Corporation.

The first development well was drilled and completed in January 2026.

The company reported drilling-related challenges, including pressure-zone issues and a stuck drill string during operations on the second development well.

Further work is underway to address these issues.

Cambay Assets Offer Production Upside

HOEC also highlighted several developments across its Cambay Basin assets.

At North Balol, the company has installed Crude Oil Lifting Technology in well NB-11 to enable continuous artificial lift.

The main crude-lifting phase is expected to begin in mid-August, subject to the performance and techno-economic evaluation of the pilot project.

At Palej, HOEC expects production improvement from planned workovers and installation of Sucker Rod Pumps.

The company estimates that Palej could reach approximately 600 BOPD by FY27–28.

The planned Sucker Rod Pumps are expected to increase production from around 20–30 BOPD per well to approximately 200 BOPD per well.

A Thermic Heater installation has already increased production by around 20%.

Q1 FY27 Financial Performance

HOEC reported consolidated revenue from operations of ₹124.01 crore in Q1 FY27, compared with ₹85.50 crore in Q1 FY26.

Other income increased to ₹20.16 crore from ₹2.85 crore.

Total income stood at ₹134.34 crore.

Profit before tax was ₹6.56 crore, compared with ₹44.74 crore in Q1 FY26. The previous-year quarter included exceptional items of ₹32.52 crore.

Consolidated net profit stood at ₹6.24 crore in Q1 FY27, compared with ₹43.87 crore in Q1 FY26.

Standalone Performance

On a standalone basis, HOEC reported revenue from operations of ₹117.45 crore in Q1 FY27, compared with ₹83.48 crore in Q1 FY26.

Total income stood at ₹126.99 crore.

Profit before tax was ₹12.54 crore, compared with ₹48.21 crore in Q1 FY26.

Standalone net profit was ₹12.54 crore.

The Q1 FY26 standalone results also included exceptional items of ₹32.52 crore.

Hindustan Oil Exploration Company enters FY27 with an active drilling and production-enhancement programme across its oil and gas portfolio.

B80 remains a key offshore growth asset, with workovers and new wells planned. Kharsang has already delivered a significant increase in production, while Dirok has additional potential if gas evacuation infrastructure improves.

The company is also pursuing production-enhancement opportunities in the Cambay Basin and preparing new exploration and development activity across several blocks.

For investors, the key factors to watch will be production growth, successful execution of drilling programmes, resolution of infrastructure constraints, crude sales, capital expenditure and the contribution of new wells to future output.

This article is based on Hindustan Oil Exploration Company Limited’s Q1 FY27 Earnings Presentation dated August 13, 2026. The presentation contains forward-looking statements and the company’s actual future performance may differ from these expectations. The information is provided for informational purposes only and should not be considered investment advice.