Hindustan Oil Exploration Company Limited (HOEC) on Friday increased its participating interest in Block-80 field to 60% from 50% and has also secured a medium-term loan facility of Rs150cr.
In its regulatory filing, HOEC informed that a Deed of Assignment and Assumption is executed with Adbhoot Estates Private Limited (Adbhoot) for assigning 10% of its participating interest in favour of HOEC and Adbhoot will maintain the balance 40% interest in the block. The transaction is on a point forward by carrying the cost of Adbhoot up to First Oil.
According to HOEC, these transactions together will ensure 100% funding of the project with all facilities such as pipelines, installation and commissioning of Mobile Offshore Processing Unit (MOPU) and installation of Single Point Mooring/ Floating Storage & Offloading (FSO) unit to commercialize the production of oil and gas by April 2021.
Notably, MOPU and FSO will be 100% owned by the subsidiaries of HOEC, which would also be in revenue mode effective First Oil.HOEC will use the loan facility of Rs150cr primarily for capital spending and will also leave the company with cash reserves to meet unforeseen contingent costs, if any, during installation.
“We confirmed that the average production of oil and gas from these two wells, in oil equivalent terms would be about 8,000 barrels per day. Since the completion of drilling and testing of two wells data, we have integrated the data from the four wells drilled and one sidetrack earlier by ONGC in the Block Area,” HOEC added in a statement.
- Elango, Managing Director of HOEC said, “This move to seize the opportunity to increase our participating interest in B-80 Block and to use in-house MOPU is a reflection of our confidence in the long-term potential of this field. We have built a track record on execution and are committed to delivering First Oil in April 2021. Once on production, the Block will generate more revenue than the current revenue with an increased share of oil.”
HOEC highlighted that with proper geological modelling and petrophysical interpretation of all data, it is conclusively evident that B-80 reservoir is a connected reservoir across the field and not an isolated pool as envisaged earlier. New reservoir model has been completed and is reviewed by an independent globally reputed third party.
HOEC is convinced that B-80 Block holds a larger resource base and has potential for the long plateau of production. Adding HOEC said, “We, therefore, decided to enhance the exposure of HOEC to this opportunity by increasing its participating interest in the Block.