Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Crude oil production increased by 6.22% in Q1 FY25 compared to Q1 FY24.
- Natural gas production rose by 9.8% in Q1 FY25 over the same period last year.
- Average crude oil price realization improved by 10.46% to USD 84.89 per barrel.
- Turnover for Q1 FY25 increased by 25.73% to INR 5,840 crore.
- Numaligarh Refinery Limited (NRL) reported a profit after tax of INR 430 crores in Q1 FY25, compared to a loss of INR 77 crores in Q1 FY24.
Negative Points
- EBITDA margin decreased to 43.79% in Q1 FY25 from 53.49% in Q1 FY24.
- Profit after tax declined to INR 1,467 crores in Q1 FY25 from INR 1,613 crores in Q1 FY24.
- Earnings per share dropped to INR 9.02 in Q1 FY25 from INR 9.92 in Q1 FY24.
- Provision for GST on royalty amounted to INR 204 crores in Q1 FY25, compared to nil in Q1 FY24.
- The increase in SAED from USD 2.59 per barrel in Q1 FY24 to USD 10.27 per barrel in Q1 FY25 negatively impacted financials.
Q & A Highlights
Highlights of Oil India Ltd (BOM:533106, Financial) Q1 FY25 Earnings Call
Q: With the recent performance, are you on track to achieve the aggressive growth targets for oil and gas production?
A: (Pankaj Goswami, Director of Operations) Yes, we are on track. Crude oil production increased by over 6% and natural gas by almost 10% compared to the last quarter. We expect to reach our target of 4 million-plus barrels of oil and 5 BCM of gas within the next two to three years.
Q: Can you provide a more granular guidance on the exit rate for FY26 and FY27 for both oil and gas?
A: (Pankaj Goswami, Director of Operations) We plan to drill 78 wells this year and 100 wells next year. For FY26 and FY27, we expect to maintain this growth trajectory.
Q: What is the status of the Numaligarh Refinery Limited (NRL) expansion project?
A: (Sachidananda Maharana, CGM F&A) The project cost is INR20,000 crores with 65% physical progress. Completion is expected by December 2025. Oil India's equity contribution will be around INR5,500 crores.
Q: Can you share the crude oil price realization and sales figures for the previous quarter?
A: (Unidentified Company Representative) Crude oil sales for Q1 FY25 were INR2,198 crores. Production was 0.871 MMT, and sales were 0.747 MMT. For the March quarter, production was 0.848 MMT, and sales were 0.840 MMT.
Q: Is there any update on the APM gas price upside?
A: (Pankaj Goswami, Director of Operations) Currently, there is no clarity. However, we expect a $0.25 increase per MMBtu from April 2025.
Q: What is the visibility on the completion of the Indradhanush Gas Grid and the increase in gas offtakers?
A: (Unidentified Company Representative) The grid is expected to be completed by December this year. We anticipate increased gas consumption from various customers, including Numaligarh Refinery Expansion Project, Assam Power Generation Company Limited, and others.
Q: What is the success rate of drilling wells, and how has it changed over the years?
A: (Pankaj Goswami, Director of Operations) Our success rate for development wells is almost 100%, while for exploratory wells, it is around 50-60%. We aim to improve this to 80-90%.
Q: What is the CapEx plan for Oil India and NRL for FY25 and FY26?
A: (Pankaj Goswami, Director of Operations) For Oil India, the CapEx for FY24-25 is INR6,880 crores, and for NRL, it is INR9,650 crores.
Q: What is the impact of the recent Supreme Court judgment on the royalty and sales tax?
A: (Pankaj Goswami, Director of Operations) We have already provided for the GST on royalty in our accounts. The total provision is around INR3,300 crores. The Supreme Court's decision will not impact our bottom line.
Q: What percentage of the Assam basin has been explored, and what remains?
A: (Unidentified Company Representative) About 5.5 billion tonnes of oil equivalent are yet to be discovered in the Assam-Arakan Basin. Only about 2 billion tonnes have been established so far.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
