HOEC, Monthly - Beaten down and resting on the tops made in 2018. Technically there’s not much more to lose from here, perhaps another 10% downside at most. 132 is strong support (200 WMA). The downward trendline should get broken out of in the near future with support from fundamentals
B-80 might finally be online with the repairs completed. They now seem to be testing for 15 mmscfd of gas which is the full potential of the well (10-12 mmscfd would be sold and rest for internal consumption). However, there’s no confirmation on the Oil production (still under review). I think the probability of things going right this time is very high. Market still seems to be giving it a zero probability. Unfortunately, things have gone wrong one too many times that market might believe its all fine only when numbers hit the PnL and cash flows and debt is reduced and so on. At these levels, there’s perhaps nothing to lose.
So what is to gain?
B-80 when fully online could produce 4000-5000 boepd of oil and 12 mmscfd of gas. They may start with 2000 boepd and ramp up to 4000 boepd.
Topline from D1 oil well - At 4000 boepd, and $80 per barrel, for 365 days at Rs.83/USD gives 969 Cr (4000x80x365x83).
Topline from D2 gas well - 12 mmscfd at 22.2% of brent ($17.76/mmbtu), for 365 dats at Rs.83/USD gives 670 Cr (12x1037x17.76x365x83)
Of this though 45% of Oil and 33% Gas topline goes to govt as revenue share and royalty. Add to that about $15/barrel as operational cost.
Post costs, B-80 should have operational income of
Oil - 969 Cr - Govt take of 436 Cr (0.45x969) - Expenses of 182 Cr(15x4000x365x83) = 350 Cr
Gas - 670 Cr - Govt take of 221 Cr (0.33x670) = 441 Cr
So total B-80 cash flow could be 790 Cr. Of this HOEC ownership is 60% (its a JV with Adbhoot estates that owns 40% interest in b-80), so total cash flow to HOEC will be 60% of 790 Cr which works out to 474 Cr. Add to this another 100 Cr or so for the MOPU which HOEC owns and so the expense will get added back.
There are of course lot more variables than this simple calculation but this is the best case scenario (not considering super best case scenario of 5000 boepd) under the circumstances since this company has had a cursed recent few years.
How long can this 400-500 Cr free cash flow sustain? According to management estimates they have a P-90, P-50 and P-10 estimate of 7 yrs, 10 yrs and 20 yrs respectively. So it might be conservative to consider this cash flow going for 7 yrs. Discounted conservatively at 15%, it should add up roughly to somewhere around current market cap, so ideally this is at least a 2x opportunity once the field starts producing. So far it was a 0 or 1 event. It still remains a 0 or 1 event until the oil production is confirmed but we are definitely closer to 1 than to 0 now than in the past, or so it seems.
Glossary: 
- boepd - barrel of oil or equivalent per day
- mmscfd - million standard cubic feet per day
- mmbtu - 1 mmscfd = 1037 mmbtu/day
Risks:
- Oil production could be lower than 4000 boepd
- There might still be many a slip as it has been in the past few quarters
- Oil prices may crash over the period in consideration
Disc: I have had two trades here that did no work out, so perhaps this is likely a revenge trade. I have positions around 135. Not an expert in equities or oil & gas, so very likely there are lot of errors and assumptions which are downright stupid. Please do your due diligence.