15 August 2008
OILEX RAISES HOLDING TO 60% IN WEST KAMPAR PSC, INDONESIA
INCREASES EXPOSURE TO PENDING PRODUCTION FROM PENDALIAN OIL FIELD
Oilex Ltd (ASX/AIM: OEX) is pleased to announce that it has entered into an
agreement to acquire an additional 15% working interest in the West Kampar PSC
(Production Sharing Contract onshore Sumatra, Indonesia) from PT Sumatera
Persada Energi (SPE), thereby increasing Oilex's working interest from 45% to
60%. The West Kampar PSC area contains the Pendalian oil field with emerging
production in 2008 and a number of highly prospective geological trends that
will be the subject of an intensive exploration drilling program.
* Pendalian Oil Field contains 13.7 million barrels of oil (Best Estimate
oil-in-place resource).
* Production rate of 1,800 - 2,000 bopd (100% basis) in Phase 1 of Pendalian
Field develop- ment anticipated during Q4 2008.
The consideration for the additional 15% interest includes Oilex carrying
certain operational costs for SPE and a phased cash payment. The carried costs
incurred by Oilex on behalf of SPE will be recovered preferentially by Oilex
from production revenues.
On receipt of approvals from the Government of Indonesia and fulfilment of
certain other conditions precedent, the participating interests (PI) in the
West Kampar PSC will be:
Joint Venture Party Current PI New PI
Oilex 45% 60%
PT Sumatera Persada Energi 55% 40%
(Operator)
West Kampar PSC - The contract area is located in central Sumatra adjacent to
the most prolific onshore oil producing province in Indonesia (see Figure 1).
Awarded in October 2005, the PSC work program commitment provides for the
acquisition of 250 kms of 2D seismic and 50 sq kms of 3D seismic along with
drilling of the Pendalian-3 well and an additional 4 exploration wells by
November 2008.
A Plan of Development (POD) for Pendalian Field is being reviewed by the
Indonesian Government as part of the approval process that should result in
production from the field, initially from two wells, later in 2008. The POD is
based on a recent Best Estimate resource of 13.7 million barrels oil-in-place
(mmstboip) (see Table 1). The represents an increase of 14% on the original
resource estimate which was based on a single oil reservoir. The POD is
designed to bring Pendalian Field into production in two phases comprising two
wells in Phase 1 and full field development of 3-4 wells in Phase 2.
Discovered Petroleum Initially in Low Estimate Best Estimate High Estimate
Place Development Pending (100%
basis) mmstboip mmstboip mmstboip
Sihapas Sandstone Units D-6, C-5 5.8 13.7 29.1
Table 1 - Estimated Range of Volumes of Oil in Place (100% basis) - Pendalian
Field
The original plan was to start production at a likely rate of about 1,200
barrels of oil per day ("bopd") from a single well, Pendalian-3. That first
phase may now be expanded to include a second well, Pendalian-4, with a
corresponding increase in the likely production rate to 1,800 - 2,000 bopd
(100% basis) in Phase 1 of development, anticipated during Q4 2008.
Figure 1 - Pendalian Field - Location of West Kampar PSC area, Sumatra
Indonesia (please see Oilex website)
Comment - The opportunity to increase its stake in Pendalian Field and West
Kampar PSC will add to Oilex's near-term potential oil production as it expands
its asset portfolio of low risk exploration, appraisal and development projects
around the Indian Ocean rim.
Yours sincerely,
B. H. McCarthy
Managing Director
For further information, please contact:
Ray Barnes, Technical Director, Oilex Ltd Tel. +61 8 9485 3200 (Western
Australia)
Archie Berens, Director Pelham Public Relations Tel. +44 20 7743 6679 (United
Kingdom)
RFC Corporate Finance Ltd acts as Oilex's Nominated Adviser, contact Stuart
Laing +618 9480 2506
The information in this report has been compiled by the Managing Director of
Oilex Ltd, Bruce McCarthy B.Sc. Hons. PhD (Geology) who has over 29 years
experience in petroleum geology and Ray Barnes, B.Sc. Hons. the Technical
Director of Oilex Ltd who has over 35 years experience in petroleum geology and
is a member of the AAPG & EAGE. Estimates of oil-in-place are reported in
accordance with the standard definitions set out by the Society of Petroleum
Engineers, further information on which is available at www.spe.org.
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