Hindustan Oil Exploration Company (HOEC) has been among the top gainers on the BSE today; opening 1.5% higher at Rs.208.25 and rising further to an intraday high at Rs.232.65, going up 13.5%.

The company announced today morning that it has signed an offtake contract with Gujarat State Petroleum Corp. to sell 0.3 metric million standard cubic meters of gas per day (mmscmd) from its B-80 block in Gujarat.

B-80 block in Mumbai Offshore being developed by the company, under the Revenue Sharing Contract Model, enjoys oil and gas marketing freedom.

To discover the market price for the gas, as required by the Government policy, HOEC invited proposals for participation in the e-auction for sale of 0.3 mmscmd natural gas to be produced from B-80; it was held on 8th March.

The contract is for 2 years and the monthly sales gas price in US$/mmbtu will be calculated at 22.2% of the previous month average Brent Crude Oil price in US$/barrel. A floor price of US$ 6/mmbtu is applicable, i.e., if in any month the calculated sales gas price is less than US$ 6/mmbtu then a price of US$ 6/mmbtu shall apply.

For example, if the average Brent Crude Oil price of previous month is US$ 80/barrel, the applicable current month sales gas price will be US$ 17.76/mmbtu. The Company is on track to commence commercial production of oil and gas from B-80 Block by end of March 2022.