TIDMOEX
RNS Number : 6024Z
Oilex Ltd
12 December 2014
12 December 2014
Cambay Basin demonstrates strong economics
-- Cambay demonstrates robust economics, despite the recent sharp drop in oil prices
-- Initial modelling indicates gas only well is economic, oil
production provides significant upside value
-- India domestic gas demand to continue to outstrip supply
-- Buyer bid system for gas offtake results in higher prices
-- Low commercialisation costs with existing infrastructure in place
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to confirm that the
Cambay Field is expected to have robust economics, despite the
recent sharp drop in oil prices.
Initial production profiles modelled by the Company for the next
three horizontal wells using the Cambay-77H data provide the
following indicative value metrics per well:
Well configuration Product 10 Yr Assumed Payback NPV(10) /BOE
slate recovery (BOE) (Mths)
--------------------- ----------- ---------------- -------- -------------
700m lateral with
9 fracs Gas 531,000 48 $1
--------------------- ----------- ---------------- -------- -------------
700m lateral with
9 fracs Gas + Oil 680,000 22 $15
--------------------- ----------- ---------------- -------- -------------
1,400m lateral with Gas + Oil >1,000,000 12 >$20
18 fracs
--------------------- ----------- ---------------- -------- -------------
The above modelling assumes a US$70 / Bbl oil and US$8 / MSCF
gas price. The NPV calculation assumes utilisation of existing tax
losses. Full field economics will be assessed after completion of
the engineering studies, including determining the appropriate
throughput rate for gas processing facilities. A well with 700m
lateral and 9 fracs compares favourably with Oilex's previous
commercial assessment for Cambay.
The "700m gas only" well shows the economic impact of no revenue
from concurrent oil production. Initial modelling indicates that,
even a gas well with no associated liquids is economic. A further
positive from analysis of the Cambay-77H data is the significantly
higher oil gas ratio (OGR), which has a material positive impact on
the revenue stream from future Cambay horizontal wells.
The well economics are underpinned by the significant excess of
demand over supply within the Indian domestic economy, which is
forecast to grow. According to the US Energy Information
Agency:
-- India is a significant importer of crude oil, as the
country's demand growth continues to outstrip domestic supply
growth; and
-- Natural gas serves as a substitute for coal in electricity
generation and fertiliser production in India. The country began
importing liquefied natural gas in 2004 and increasingly relies on
imports to meet domestic natural gas needs.
Oilex has concluded 2 gas sale agreements (GSA) to date. Gas
sale contracts are conducted via a bid system, with buyers
submitting offers to purchase via a tender process. Given the
demand for gas by nearby industrial users, strong pricing is
secured, above the floor price recently established by the Indian
Government.
Existing industry located within 15km of the Cambay Field means
very low capital cost is associated with sales of gas to the local
market and the tie-in to existing gas transmission pipeline
network. The network has excess capacity for additional gas that
can be used for gas from the Cambay Field.
Managing Director of Oilex, Ron Miller, said;
"The robust indicative economics of the Cambay Field remain,
despite the sharp decline in oil prices. The fall in the oil price
does impact the total revenue generated by the Cambay Field, but
this is more than offset by the 250% increase in the oil gas ratio.
The premium gas market in India also means that the Cambay Field is
economic even when we exclude oil revenues from our modelling.
"
For and on behalf of Oilex Ltd
Ron Miller
Managing Director
For further information, please contact:
Oilex Ltd Strand Hanson Limited Tavistock Communications
Ron Miller, Managing Nominated Adviser and Ed Portman
Director AIM Broker Email: eportman@tavistock.com
Email: oilex@oilex.com.au Rory Murphy/Ritchie Balmer Tel: +44 207 920
Tel: +61 8 9485 Email: oilex@strandhanson.co.uk 3150
3200 Tel: +44 20 7409 3494 UK
Australia UK
Qualified Petroleum Reserves and Resources Evaluator
statement
Pursuant to the requirements of Chapter 5 of the ASX Listing
Rules, the information in this report relating to petroleum
reserves and resources is based on and fairly represents
information and supporting documentation prepared by or under the
supervision of Mr. Peter Bekkers, Chief Geoscientist employed by
Oilex Ltd. Mr. Bekkers has over 17 years experience in petroleum
geology and is a member of the Society of Petroleum Engineers and
AAPG. Mr. Bekkers meets the requirements of a qualified petroleum
reserve and resource evaluator under Chapter 5 of the ASX Listing
Rules and consents to the inclusion of this information in this
report in the form and context in which it appears. Mr. Bekkers
also meets the requirements of a qualified person under the AIM
Note for Mining, Oil and Gas Companies and consents to the
inclusion of this information in this report in the form and
context in which it appears.
LIST OF ABBREVIATIONS AND DEFINITIONS
API A unit of measurement established by the American
Petroleum Institute (API) that indicates the density
of a liquid. Fresh water has an API density of
10.
-------------- -------------------------------------------------------------------------------------
Associated Natural gas found in contact with or dissolved
Gas in crude oil in the reservoir. It can be further
categorized as Gas-Cap Gas or Solution Gas.
-------------- -------------------------------------------------------------------------------------
Bbls Barrels of oil or condensate.
-------------- -------------------------------------------------------------------------------------
BBO Billion standard barrels of oil or condensate
-------------- -------------------------------------------------------------------------------------
BCF Billion Cubic Feet of gas at standard temperature
and pressure conditions
-------------- -------------------------------------------------------------------------------------
BCFE Billion Cubic Feet Equivalent of gas at standard
temperature and pressure conditions.
-------------- -------------------------------------------------------------------------------------
BOE Barrels of Oil Equivalent. Converting gas volumes
to the oil equivalent is customarily done on the
basis of the nominal heating content or calorific
value of the fuel. Common industry gas conversion
factors usually range between 1 barrel of oil equivalent
(BOE) = 5,600 standard cubic feet (scf) of gas
to 1 BOE = 6,000 scf. Oilex currently uses 5,800
scf = 1 BOE
-------------- -------------------------------------------------------------------------------------
BOPD Barrels of oil per day.
-------------- -------------------------------------------------------------------------------------
bwpd Abbreviation for barrels of water per day, a common
unit of measurement for the daily volume of produced
water.
-------------- -------------------------------------------------------------------------------------
Condensate A natural gas liquid with a low vapor pressure
compared with natural gasoline and liquefied petroleum
gas. Condensate is mainly composed of propane,
butane, pentane and heavier hydrocarbon fractions.
The condensate is not only generated into the reservoir,
it is also formed when liquid drops out, or condenses,
from a gas stream in pipelines or surface facilities.
-------------- -------------------------------------------------------------------------------------
Core Analysis Laboratory study of a sample of a geologic formation,
usually reservoir rock, taken during or after drilling
a well. Economic and efficient oil and gas production
is highly dependent on understanding key properties
of reservoir rock, such as porosity, permeability,
and wettability. Geoscientists have developed a
variety of approaches, including log and core analysis
techniques, to measure these properties. Core analysis
is especially important in shale reservoirs because
of the vertical and lateral heterogeneity of the
rocks. Core analysis can include evaluation of
rock properties and anisotropy; organic matter
content, maturity, and type; fluid content; fluid
sensitivity; and geomechanical properties. This
information can be used to calibrate log and seismic
measurements and to help in well and completion
design, well placement, and other aspects of reservoir
production.
-------------- -------------------------------------------------------------------------------------
CO(2) Carbon dioxide
-------------- -------------------------------------------------------------------------------------
Contingent Those quantities of petroleum estimated, as of
Resources a given date, to be potentially recoverable from
known accumulations by application of development
projects, but which are not currently considered
to be commercially recoverable due to one or more
contingencies.
Contingent Resources may include, for example,
projects for which there are currently no viable
markets, or where commercial recovery is dependent
on technology under development, or where evaluation
of the accumulation is insufficient to clearly
assess commerciality. Contingent Resources are
further categorized in accordance with the level
of certainty associated with the estimates and
may be sub-classified based on project maturity
and/or characterised by their economic status.
-------------- -------------------------------------------------------------------------------------
Hydraulic http://www.energy4me.org/hydraulicfracturing/inside-fracturing/tour-fracturing-site/
Fracturing
-------------- -------------------------------------------------------------------------------------
OGR Oil to gas ratio in an oil field, calculated using
measured natural gas and crude oil volumes at stated
conditions. The gas/oil ratio may be the solution
gas/oil, symbol Rs; produced gas/oil ratio, symbol
Rp; or another suitably defined ratio of gas production
to oil production. Volumes measured in scf and
bbls.
-------------- -------------------------------------------------------------------------------------
H(2) S Hydrogen sulphide. An extraordinarily poisonous
gas with a molecular formula of H2S. At low concentrations,
H2S has the odor of rotten eggs, but at higher,
lethal concentrations, it is odorless. H2S is hazardous
to workers and a few seconds of exposure at relatively
low concentrations can be lethal, but exposure
to lower concentrations can also be harmful
-------------- -------------------------------------------------------------------------------------
LPG (Liquefied Petroleum Gas) Gas mainly composed of
propane and butane, which has been liquefied at
low temperatures and moderate pressures. The gas
is obtainable from refinery gases or after the
cracking process of crude oil. Liquefied petroleum
gas is also called bottle gas. At atmospheric pressure,
it is easily converted into gas and can be used
industrially or domestically. The term is commonly
abbreviated as LPG.
-------------- -------------------------------------------------------------------------------------
mD (Millidarcy) A darcy (or darcy unit) and millidarcy
(md or mD) are units of permeability, named after
Henry Darcy. They are not SI units, but they are
widely used in petroleum engineering and geology.
Like other measures of permeability, a darcy has
dimensional units in length(2).
-------------- -------------------------------------------------------------------------------------
MSCFD Thousand standard cubic feet (of gas) per day
-------------- -------------------------------------------------------------------------------------
MMscfd Million standard cubic feet of gas per day.
-------------- -------------------------------------------------------------------------------------
MMbbls Million barrels of oil or condensate.
-------------- -------------------------------------------------------------------------------------
MMBO Million standard barrels of oil or condensate
-------------- -------------------------------------------------------------------------------------
MMSCFD Million standard cubic feet (of gas) per day
-------------- -------------------------------------------------------------------------------------
MMscfe/d Million standard cubic feet equivalent of gas a
day
(172.4 bbls of oil per day using 5,800 scf per
bbl)
-------------- -------------------------------------------------------------------------------------
MMscfe Million standard cubic feet equivalent of gas
(172.4 bbls of oil using 5,800 scf per bbl)
-------------- -------------------------------------------------------------------------------------
PSC Production Sharing Contract
-------------- -------------------------------------------------------------------------------------
psig pounds per square inch gauge
-------------- -------------------------------------------------------------------------------------
MD Measured Depth.
-------------- -------------------------------------------------------------------------------------
Prospective Those quantities of petroleum which are estimated,
Resources as of a given date, to be potentially recoverable
from undiscovered accumulations.
-------------- -------------------------------------------------------------------------------------
Plug and The wellbore for a plug and perf job is generally
Perf composed of standard steel casing, cemented or
uncemented, set in the drilled hole. Once the drilling
rig has been removed, a coiled tubing unit or wireline
truck is used to perforate near the bottom of the
well, and then fracturing fluid is pumped. Then
the coiled tubing unit or wireline truck sets a
plug in the well to temporarily seal off that section
so the next section of the wellbore can be treated.
Another stage is pumped, and the process is repeated
along the horizontal length of the wellbore.
-------------- -------------------------------------------------------------------------------------
Reserves Reserves are those quantities of petroleum anticipated
to be commercially recoverable by application of
development projects to known accumulations from
a given date forward under defined conditions.
Proved Reserves are those quantities of petroleum,
which by analysis of geoscience and engineering
data, can be estimated with reasonable certainty
to be commercially recoverable, from a given date
forward, from known reservoirs and under defined
economic conditions, operating methods and government
regulations.
Probable Reserves are those additional Reserves
which analysis of geoscience and engineering data
indicate are less likely to be recovered than Proved
Reserves but more certain to be recovered than
Possible Reserves.
Possible Reserves are those additional reserves
which analysis of geoscience and engineering data
indicate are less likely to be recoverable than
Probable Reserves.
P90 refers to the quantity for which it is estimated
there is at least a 90% probability the actual
quantity recovered will equal or exceed.
P50 refers to the quantity for which it is estimated
there is at least a 50% probability the actual
quantity recovered will equal or exceed.
P10 refers to the quantity for which it is estimated
there is at least a 10% probability the actual
quantity recovered will equal or exceed.
-------------- -------------------------------------------------------------------------------------
SCF/BBL Standard cubic feet (of gas) per barrel (of oil).
-------------- -------------------------------------------------------------------------------------
Tight Gas The reservoir cannot be produced at economic flow
Reservoir rates or recover economic volumes of natural gas
unless the well is stimulated by a large hydraulic
fracture treatment, a horizontal wellbore, or by
using multilateral wellbores.
-------------- -------------------------------------------------------------------------------------
Undiscovered Is that quantity of petroleum estimated, as of
in place a given date, to be contained within accumulations
volume yet to be discovered
-------------- -------------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUUOVRSRAUARA
Synergia Energy (LSE:SYN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Synergia Energy (LSE:SYN)
Historical Stock Chart
From Apr 2023 to Apr 2024