Shares of Hindustan Oil Exploration Company nosedived more than 16% on Friday, in an otherwise positive broader market, after the company updated on the B-80 project, located in the Mumbai offshore basin, off the west coast of India, in the Arabian Sea. The oil and gas explorer in an exchange filing said that the project has been delayed due to operational issues.

Reacting to the news, shares of Hindustan Oil declined opened 11.76% lower at ₹194 against the previous close price of ₹219.85. Extending opening losses, the energy stock dropped as much as 16.46% to hit an intraday low of ₹183.75 amid a spurt in volume trade.

There was a surge in volume as 5.94 lakh shares worth ₹11.43 crore changed hands over the counter on the BSE against two-week average volume of 1.40 lakh scrips. The market capitalisation of the smallcap stock stood at ₹2,615.8 crore at the time of reporting.

The stock traded higher than 100-day and 200-day moving averages, but lower than 5-day, 20-day, and 50-day averages. It has fallen 10% in a week, while it gained 2% in the last one month and 8.6% since the beginning of the calendar year 2022. In the last one year, the stock has risen more than 100%, while it has fallen 6% over a six-month period.

Hindustan Oil informed the exchange that the pre-commissioning and safety checks have been completed at the B-80 project. However, the project faces operational issues and troubleshooting is currently ongoing.

“The pre-commissioning and safety checks at KGB-Offshore Installation (MOPU) and FSO Prem Pride (FSO) are complete and the system is ready to receive the first hydrocarbons. The well opening sequence was followed to bring the first well safely on production, however we have encountered operational issues and troubleshooting is currently ongoing,” the energy firm said in the filing to the BSE on Thursday.

“The delay witnessed in the commencement of production from the field being unanticipated, necessary corrective actions are being taken by the company, and the field will safely be brought on line for production as soon as the issues are rectified,” it added.

The B-80 project is jointly owned by Adbhoot Estates and Hindustan Oil Exploration. It is currently in commissioning stage and is expected to start commercial production soon.

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