Essar Oil & Gas Reports Record Net Profit of Rs 335 Cr in FY23

As a result of lower operating expenses and better sales, Essar Oil and Gas Exploration and Production Ltd (EOGEPL) declared a record net profit of Rs 335 crore on Monday.

The firm reported a net profit of Rs 335 crore in 2022–23 as opposed to Rs 212 crore in the prior year.

The producer of unconventional hydrocarbons recorded FY23 fiscal revenue of Rs 900 crore, an increase of roughly 1.8 times over FY22.

On a YoY basis, EBIDTA increased by nearly 205% to over Rs 700 crore.

Due to lower operational expenses and internal consumption, the EBITDA margin “saw a significant improvement of around 3,100 basis points, reaching 77 percent,” the report said.

Two-thirds of India’s gas production, known as coal bed methane (CBM), is being produced by EOGEPL from coal seams. In order to increase production, it intends to spend Rs 2,000 crore over the next 18 to 24 months digging 200 more wells.

Every day, it generated 0.84 million standard cubic meters of CBM.

“The business aims to contribute 5% to India’s overall gas output during the next five years.

The only CBM project in India to have produced more than 82 billion cubic feet of CBM gas to far is its Raniganj block, which has produced the most CBM to date.

In order to increase gas production from the existing wells, EOGEPL, which is currently operating about 350 wells in the Raniganj CBM block in West Bengal, has adopted a systematic approach to well revival through the adaptation of top-tier technology and stimulation techniques, including re-fracs and close monitoring.

The firm presently gives the state exchequer Rs 150 crore yearly, but if the production of CBM from Raniganj is scaled up, that contribution is expected to increase to Rs 300 crore.

According to EOGEPL, it has a clear plan for increasing output from the block to over 3 mmscmd and doubling its CBM reserve base in the next years.

Pankaj Kalra, Chief Executive Officer of EOGEPL, commented on the results, saying, “Our team is regularly outperforming its expectations and achieving good operational performance year on year supported by ramp up in gas production, as well as by optimizing and drastically lowering internal consumption. The business is still devoted to its top goals of improving the fields and introducing new technologies that increase output while reducing costs.

“The company aims to participate in India’s mission to reduce carbon footprint and become a gas-based economy by the next ten years,” said Prashant Ruia, Director, Essar Capital and EOGEPL. By increasing its gas output at the lowest possible cost, EOGEPL hopes to provide alternative clean fuel at affordable costs to enterprises in the area.

To implement a staged expansion program and accomplish these goals, the firm has enlisted the assistance of internationally recognized service providers and technical experts. The program calls for the rapid development of the Raniganj block’s deeper CBM region as well as the drilling of additional directional and horizontal wells.

In order to increase productivity and simplify procedures in the sector, EOGEPL has teamed with Sensia for digitalization and remote operations in oil and gas fields.

In order to expand coal bed methane (CBM) output, it has previously announced investments in microbial ECBM technology. This was done with the intention of using cutting-edge techniques for greater extraction and efficiency in the energy industry.

According to the statement, “the company is also working to expand into new areas, one of which is shale gas exploration, which will help the company solidify its position as one of the major unconventional hydrocarbon players in the area.”