The production from PY-1 Field was shut down for a cumulative of 73 days as GAIL India, the buyer of PY-1, was not able to offtake the gas supply due to shut down of its end user plant. Buyer is initiating the steps for regular offtake of PY-1 Gas.

Hardy Exploration & production Inc, the operator of the PY-3 Field, has notified the company that the PY-3 Field has been temporarily shutdown on July 31, 2011 pending management committee approval of the award of a contract for floating production system (FPS). Hardy is working closely with the authorities to secure the necessary approvals and recommence the production at the earliest.

Quarterly performance

For the quarter ended September 2011, HOEC reported 54% fall in Net Sales to Rs 30.98 crore as against Rs 67.62 crore in the quarter ended September 2010. The operating profit margins of the company contracted by whopping 4000 bps to 33% leading 80% fall in operating profits to Rs 10.01 crore.

The other income of the company zoomed 235% to Rs 6.43 crore leading the PBIDT to fall by 68% to Rs 16.43 crore. Interest costs fell 23% to Rs 2.62 crore while DDA cost decreased 74% to Rs 6.95 crore. The company earned forex gain of Rs 1.55 crore in the quarter under review against the forex loss of Rs 0.56 crore in the corresponding quarter last year. As a result, the PBT decreased 75% to Rs 5.31 crore. Effective Tax rate fell from 31.5% during the quarter ended September 2010 to 22.6% during the quarter ender review, leading the Net Profit to decline by 72% to Rs 4.11 crore.

Half yearly performance

For half yearly-ended September 2011, HOEC reported 39% fall in its Net Sales to Rs 92.72 crore compared to corresponding quarter previous year. The operating profit margins contracted by 1800 bps to 59% resulting 53% decrease in operating profit to Rs 54.67 crore. Other income spiked 239% to Rs 9.57 crore leading the PBDIT to decline by 46% to Rs 64.24 crore. Interest costs decreased 22% to Rs 5.22 crore and DDA cost fell 54% to Rs 27.71 crore. The company also had a forex loss of Rs 0.30 crore during the quarter under review. As a result PBT fell by 43% to Rs 29.73 crore. After accounting taxation of Rs 13.60 crore, down by 50% against the September quarter previous year, the Net Profit fell by 40% to Rs 21.13 crore.

Other information

• During the quarter ended September 2011, the company has received an amount of Rs –258.99 lakh pursuant to a favorable award from the Arbitration Tribunal in relation to a dispute with ONGC. Further, pursuant to the aforesaid arbitration award, the contingent liability aggregating Rs 3493.47 (as of March 31, 2011) is no longer required.

• The scrip is currently trading at Rs 123.05