Synopsis: Hindustan Oil Exploration Company (HOEC) has unveiled an aggressive multi-year growth roadmap targeting net production of nearly 32,000 BOEPD by 2029 from around 1,500 BOEPD currently. The company plans to unlock value from its 62.3 MMBOE of 2P reserves through extensive drilling, field development, and monetization initiatives across key assets.
Shares of Hindustan Oil Exploration Company Limited (HOEC) are likely to remain in focus after the company presented its FY26 earnings update and long-term production roadmap, highlighting significant reserve potential and a multi-asset drilling strategy aimed at substantially increasing production over the next few years.
HOEC currently commands a market capitalization of around Rs. 2,219 crore. During FY26, the company reported consolidated revenue of Rs. 301.3 crore, EBITDA of Rs. 124.5 crore, and net profit of Rs. 62.8 crore. Revenue, EBITDA, and profit declined by 34.4 percent, 50 percent, and 57.4 percent respectively compared to FY25. The company maintains a low gearing ratio of 0.04, with only Rs. 20 crore of outstanding long-term debt being serviced through internal cash flows.
One of the biggest takeaways from the presentation is HOEC’s ambitious production growth target. The company aims to increase net production from approximately 1,500 BOEPD in 2026 to 11,000 BOEPD in 2027, 22,500 BOEPD in 2028, and nearly 32,000 BOEPD by 2029, representing over 21 times growth over the period.
The growth strategy is backed by a substantial reserve base. As of March 2026, HOEC reported 1P reserves of 40.6 MMBOE and 2P reserves of 62.3 MMBOE, along with more than 103 MMBOE of prospective 3P resources. The company’s largest asset remains the B-80 offshore field, which alone contributes 35.5 MMBOE of reserves and represents a major future production driver.
At the B-80 field in Mumbai Offshore, where HOEC now owns a 100 percent stake, the company plans workovers on existing wells followed by drilling of three new wells. Management has earmarked approximately USD 30.5 million of capex for FY27 at the asset. The field currently produces around 1,103 BOEPD and holds reserves of 35.53 MMBOE.
Another major growth catalyst is the newly acquired B-15 block, which contains an estimated 16 MMBOE of reserves. Technical studies are underway, with drilling expected to commence in FY28. Management expects the asset to eventually ramp up toward 5,000 BOPD production levels.
In the North-East region, HOEC’s Kharsang field has shown encouraging results. During FY26, the company completed a nine-well drilling campaign, doubling oil production from approximately 325 BOPD to 726 BOPD. Three wells also encountered significant gas flows ranging between 3.4 MMSCFD and 8.6 MMSCFD, indicating higher-than-expected gas potential. Another nine development wells are planned during FY27.
The Dirok gas field, which contains over 226 BCF of reserves, remains constrained due to inadequate gas evacuation infrastructure. Management stated that current production is operating at roughly one-third of the field’s potential. However, a revised field development plan has secured the asset’s tenure until 2035, while discussions regarding connectivity to the national gas grid continue. Once evacuation bottlenecks are resolved, Dirok could become a significant contributor to production growth.
Investors should also note the ongoing dispute with HPCL regarding crude supplied from the B-80 field. According to management, approximately Rs. 260 crore of sales revenue has remained tied up because of the dispute, resulting in delays to certain planned investments and drilling activities. The company stated that resolution efforts are progressing through a conciliation framework and alternate crude sales arrangements.
While FY26 financial performance was impacted by operational challenges and delayed monetization, the earnings presentation suggests that HOEC is transitioning into a high-growth phase driven by reserve monetization, field development, and new drilling campaigns. If management executes successfully on its roadmap and key bottlenecks such as the HPCL dispute and gas evacuation constraints are resolved, the company could witness a meaningful transformation in production and cash flow generation over the next three years.
Founded in 1983, Hindustan Oil Exploration Company Limited is India’s first private-sector oil and gas exploration and production company. The company operates a diversified portfolio of onshore and offshore assets across Assam, Arunachal Pradesh, Gujarat, Maharashtra, and Tamil Nadu, focusing on the exploration, development, and production of crude oil and natural gas.
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