Hindustan Oil Exploration Secures Loan for PY-1 Field Development

Hindustan Oil Exploration has entered into a Loan Agreement with a consortium of Banks co-led by IDBI Bank and UTI Bank for availing a US Dollar denominated Term Loan amounting to US $100 million to partially finance the development of PY-1 Field. Hindustan has a 100% stake in the field and is the operator.

The block in which the PY-1 Field is located extends over an area of 75 sq. km. and is located 30 km. north of PY-3 field. This Block contains the PY-1 basement gas field. The proven gas reserves in the field are mainly contained in the granitic basement structural high, which was moulded into a series of hills and ridges during several million years of weathering and erosion.

The detailed technical work (both subsurface and surface) leading to a revised plan of development (RPoD) was completed and the company has secured approval for it from DGH on a fast track basis. This RPoD envisages development of basement gas reserves by drilling three extended reach horizontal wells from a fixed well head platform and resultant gas transported to an onshore delivery point by way of an offshore pipeline. The Company has commenced the implementation of the RPoD and completed the Geophysical and Geo-technical survey work as well as initiated the detailed engineering work for the Onshore and Offshore facilities. First gas is targeted in late 2007 or early 2008.