Highest-ever quarterly revenue by Essar Oil in Q3 as CBM output doubles

The company reported 100% offtake of gas through GAIL's Urja Ganga pipeline

Doubling of coal bed methane (CBM) production and favourable global gas prices have allowed Essar Oil and Gas Exploration and Production Ltd (EOGEPL) to report its highest-ever quarterly revenue of Rs 219 crore in the third quarter of FY23.

Quarterly revenue rose 54 per cent year on year, while EOGEPL posted a record revenue of Rs 696 crore in the first nine months of FY23, the firm said on Monday.

In Q3FY23, its earnings before interest, taxes, depreciation and amortisation (Ebitda) grew by 100 per cent to Rs 171 crore, while its profit after tax (PAT) was up 273 per cent YoY to Rs 97 crore.

The latest revenue growth comes on the back of production doubling to over 0.8 million metric standard cubic meters per day (mmscmd). The company reported 100 per cent gas offtake through state owned gas utility GAIL (India)'s Urja Ganga pipeline.

In August 2018, EOGEPL had signed a Gas Sale and Purchase Agreement (GSPA) to sell gas produced from the Raniganj East CBM Block in West Bengal operated by it to GAIL (India) Ltd for a 15-year period. Essar has invested about Rs 5,000 crore for developing the entire Raniganj asset over many years.

While a production capacity of over one million mmscmd had been reached in 2018, it had to be curtailed due to delays in offtake from the field.

EOGEPL currently operates 350 wells in the block and has taken up a systematic approach of well revival, it said.

"Essar aims to participate in India’s vision of reducing carbon footprint and provide industries with alternate clean fuel at economical prices. We are committed to contribute to India’s vision of becoming a gas based economy in the next decade by ramping up its gas production" Prashant Ruia, Director, Essar Capital and EOGEPL said.

EOGEPL CEO Pankaj Kalra said the company has reduced internal consumption by 12 per cent and the area remains a focus going forward.

As part of its latest results, the company reiterated its commitment towards doubling its CBM reserve base, and increasing production from the block to over 3 mmscmd in the coming years.

"The company has roped in globally renowned service providers and technical consultants to roll out a phased growth program to achieve these objectives. The program includes drilling of new directional and horizontal wells, and expeditious development of the Deeper CBM Area of Raniganj block," it said.

The company is also working towards a planned entry foray into shale gas exploration, another unconventional hydrocarbon.