a) BASIS OF PREPARATION:
 
 i. The financial statements are prepared under historical cost
 convention on accrual basis of accounting in accordance with the
 generally accepted accounting principles in India and in accordance
 with the mandatory accounting standards issued by The Institute of
 Chartered Accountants of India and the provisions of the Companies Act,
 1956.
 
 b) USE OF ESTIMATES:
 
 i. The presentation of financial statements requires the management to
 make estimates and assumptions that affect the reported amount of
 assets and liabilities on the date of the financial statements and the
 reported amount of revenues and expenses during the reporting period.
 Differences between the actual results and estimates are recognized in
 the period in which the results are known /materialized.
 
 c) FIXED ASSETS AND DEPRECIATION:
 
 i. Fixed Assets are stated at cost, less accumulated depreciation,
 including financing costs till commencement of commercial production.
 Net changes on foreign exchange contracts and adjustment arising from
 exchange rate variations attributable to the fixed assets are
 capitalized.
 
 ii. Depreciation on fixed assets is provided in accordance with the
 rates as specified in Schedule XIV to The Companies Act, 1956, on
 straight-line method, up to 95% of the cost of the assets except in
 respect of assets of value less than Rs.5000 each, which are
 depreciated fully in the year of acquisition. Depreciation is charged
 pro-rata on monthly basison all other assets from/up to the month of
 capitalization/sale, disposal and/or dismantle. Depreciation relating
 to assets attributable directly to prospecting, exploration and
 development of oil and gas are capitalized as a part of Capital work in
 progress or producing properties, as the case may be.
 
 iii. Intangible assets are recognized only if it is probable that the
 future economic benefits that are attributable to the asset will flow
 to the enterprise and the cost of the asset can be measured reliably.
 The intangible assets are recorded at cost and are carried at cost less
 accumulated amortization.
 
 d) VALUATION OF INVENTORIES :
 
 i. Natural Gas is extracted from field as and when supply of gas is to
 be made. So there is no storage of Natural Gas available and hence
 there is no stock of natural gas.
 
 ii. The Closing Stock of Crude Oil in saleable condition is valued at
 Cost or Net Realizable Value less estimated selling costs, whichever is
 lower.
 
 iii. Cost of raw materials, process chemicals, stores and spares,
 packing material, trading and other products are valued at cost or Net
 Realisable Value whichever is lower. Cost is determined by using the
 weighted average formula. Cost comprises all costs of purchases and
 cost incurred to bring inventories to their present location and
 condition.
 
 e) PRELIMINARY EXPENSES:
 
 i. Preliminary expenses in the nature of expenses for incorporation of
 the Company, Public issue expenses and like expenses; are amortized
 over a period of five years.
 
 f) EXPLORATION AND DEVELOPMENT COSTS:
 
 i. The Company is following Full Cost Method for allocating all costs
 incurred in prospecting, exploring and developing oil and gas including
 related interest and depreciation, which are accumulated, as per the
 guidance note on Accounting for Oil and Gas producing activities issued
 by the institute of Chartered Accountants of India.
 
 ii. Exploration Costs involved in drilling and equipping exploratory
 and appraisal wells and cost of drilling exploratory type stratigraphic
 test wells are initially accounted for under the head Capital Work In
 Progress and are capitalized as producing properties when ready to
 commence commercial production.
 
 iii. All Costs relating to development wells, development type
 stratigraphic test wells and service wells are initially accounted for
 under the head Capital Work In Progress and are capitalized as
 producing properties when ready to commence commercial production.
 
 iv. Producing properties are depleted using ''Unit of Production'' method
 based on estimated proved developed reserves. Any changes in Reserves
 and / or Cost are dealt with prospectively.  Hydrocarbon reserves are
 estimated by the Company following the International Reservoir
 Engineering Principles and are approved by the appropriate authority(s).
 
 g) IMPAIRMENT OF ASSETS:
 
 i. At each Balance Sheet date, the Company reviews the carrying amount
 of its assets to determine whether there is any indication that those
 assets have suffered an impairment loss. If any such indication exists,
 the recoverable amount of the asset is estimated in order to determine
 the extent of impairment loss. Where the impairment loss subsequently
 reverses, the carrying amount of the asset (cash generating unit) is
 increased to the revised estimate of its recoverable amount, but so
 that the increased carrying amount does not exceed the carrying amount
 that would have been determined had no impairment loss been recognized
 for the asset in prior accounting periods.
 
 h) INVESTMENTS:
 
 i. Current investments are carried at the lower of cost and quoted /
 fair value. Long term Investments are stated at cost. Provision for
 diminution in the value of long-term investments is made only if such
 a decline is other than temporary in the opinion of the management.
 
 i) RECOGNITION OF INCOME AND EXPENDITURE:
 
 i. Revenue from sale of products is recognized on transfer of custody
 to customers. Any difference as of the reporting date between the
 entitlement quantities minus the quantities sold in respect of crude
 oil (including condensate) and gas, if positive is treated as inventory
 and, if negative, is adjusted to revenue by recording the same as
 liability.
 
 ii. Sales are inclusive of all statutory levies and taxes that are
 paid/payable to the government, based on the provisions under various
 laws and agreements governing Company''s activities in the respective
 field/project.
 
 iii. Any payment received in respect of short lifted gas quantity for
 which an obligation exists to supply such gas in subsequent periods is
 recognized as Deferred Revenue in the year of receipt.  The same is
 recognized as revenue in the year in which such gas is actually
 supplied for the quantity supplied or in the year in which the
 obligation to supply such gas ceases, whichever is earlier.
 
 iv. Revenue in respect of interest on delayed realizations is
 recognized when there is reasonable certainty regarding ultimate
 collection.
 
 v. All income and expenditure items that have material bearing on the
 financial statements are recognized on accrual basis. However insurance
 claims are not accounted on accrual basis but are accounted for as and
 when received.
 
 j) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
 
 i. Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 notes.  Contingent Assets are neither recognized nor disclosed in the
 financial statements.
 
 k) ACCOUNTING FOR TAXATION:
 
 i. Income taxes are accounted for in accordance with Accounting
 Standard 22 AS Accounting for Taxes on Income issued by the Institute
 of Chartered Accountants of India. Tax expense comprises both current
 and deferred tax. Current tax is measured at the amount expected to be
 paid to / recovered from the tax authorities using the applicable tax
 rates. Deferred tax assets and liabilities are recognized for future
 tax consequences attributable to timing differences between taxable
 income and accounting income that are capable of reversing in one or
 more subsequent periods and are measured using the relevant enacted tax
 rates. At each Balance Sheet date, the Company reassesses unrecognized
 deferred tax assets to the extent they have become reasonably certain
 or virtually certain of realization, as the case may be.
 
 l) BORROWING COSTS:
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue.
 
 m) ACCOUNTING FOR RETIREMENT BENEFIT:
 
 The Company has no policy for Leave encashment. Gratuity is accounted
 for on an accrual basis. All other Post retirement benefits to
 employees are accounted on cash basis.
 
 n) FOREIGN CURRENCY TRANSACTIONS:
 
 i. Foreign Currency transactions on initial recognition in the
 reporting currency are accounted for at the exchange rates prevailing
 on the date of transaction.
 
 ii. At each Balance sheet date, foreign currency monetary items are
 translated using the average of exchange rates prevailing on the
 balance sheet date and non-monetary items are translated using the
 exchange rate prevailing on the date of transaction or on the date when
 the fair value of such items are determined.
 
 iii. Losses or gains relating to the loans/deferred credits utilized
 for acquisition of fixed assets are adjusted to the carrying cost of
 the relevant assets. All the other exchange differences arising on the
 settlement of monetary items or on reporting of monetary items at the
 rates different from those at which they were initially recorded during
 the period, or reported in previous financial statements are recognized
 as income or expenses in the period in which they arise.
 
 o) SITE RESTORATION:
 
 i.  Estimated future liabilities relating to dismantling and abandoning
 producing well sites and facilities whose estimated producing life is
 expected to end during next ten years is recognized based on the
 estimated future expenditure determined by the management in accordance
 with the local conditions and requirements. The corresponding amount is
 added to the cost of the producing property and is depleted using unit
 of production method. Any change in the value of the estimated
 liability is reflected as an adjustment to the provision and the
 corresponding producing property.