Essar Oil & Gas posts record Rs 335 crore net profit in FY23

Essar Oil and Gas Exploration and Production Ltd (EOGEPL) on Monday reported a record net profit of Rs 335 crore in the financial year ending March 31, helped by reduced operating costs and higher prices.

Net profit of Rs 335 crore in 2022-23 compared with Rs 212 crore net profit in the previous fiscal, the company said in a statement.

The unconventional hydrocarbon producer reported its highest fiscal revenue of Rs 900 crore in FY23, a growth of about 1.8 times compared to the previous year.

EBIDTA grew over 205 per cent on a YoY basis to about Rs 700 crore.

"The EBITDA margin saw a significant improvement of around 3,100 basis points, reaching 77 per cent, due to reduced operating costs and internal consumption," it said.

EOGEPL currently produces two-thirds of India's gas output from coal seams, called coal bed methane (CBM). It plans to invest Rs 2,000 crore in the next 18 to 24 months for drilling 200 more wells, which will help swell output.

It produced 0.84 million standard cubic meters per day of CBM.

"The company strives to contribute 5 per cent to India's total gas production in the next 5 years.

Its Raniganj block is the highest producer of CBM to date and the only CBM project in India to produce over 82 billion cubic feet of CBM gas to date.

EOGEPL is currently operating around 350 wells in the Raniganj CBM block in West Bengal and has taken up a systematic approach of well revival through the adaptation of world-class technology and stimulation techniques including re-fracs and close monitoring to enhance gas production from the existing wells.

The company is currently contributing Rs 150 crore to the state exchequer annually, which is likely to go up to Rs 300 crore once production of CBM from Raniganj is ramped up.

EOGEPL said it has a clear road map to double its CBM reserve base and increase production from the block to over 3 mmscmd in the coming years.

Commenting on the performance, Pankaj Kalra, Chief Executive Officer, EOGEPL, said, "Our team is consistently beating its estimates and delivering strong operating performance year on year backed by ramp up in gas production, and by optimizing and reducing internal consumption significantly.

The company remains committed to key priorities of field upgradation, bringing in new technologies enhancing production while optimizing cost."

Prashant Ruia, Director, Essar Capital and EOGEPL, said, "The company aims to participate in India's mission of reducing carbon footprint and becoming a gas-based economy by the next decade. EOGEPL aims to provide industries in its vicinity with alternate clean fuel at economical prices by ramping up its gas production at the cheapest cost."

The company has roped in globally renowned service providers and technical consultants to roll out a phased growth programme to achieve these objectives.

The programme includes the drilling of new directional and horizontal wells and expeditious development of the deeper CBM area of the Raniganj block.

EOGEPL has partnered with Sensia for digitalisation and remote operations in oil and gas fields, aiming to enhance efficiency and streamline processes in the industry.

It had previously announced investments in microbial ECBM technology to boost coal bed methane (CBM) production, aiming to leverage innovative solutions for increased efficiency and extraction in the energy sector.

"The company is also working towards opening up new frontiers, one of them being Shale Gas exploration which will help the company consolidate its position as one of the largest unconventional hydrocarbon players in the region," the statement said.

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