Oilex Ltd Oilex Corporate Update (2099C)
June 24 2016 - 5:48AM
UK Regulatory
TIDMOEX
RNS Number : 2099C
Oilex Ltd
24 June 2016
ASX Announcement
24 June 2016
ASX: OEX
AIM: OEX
Oilex Corporate Update
-- Oilex maintains focus on unlocking Cambay's multi TCF onshore gas resource potential
-- Plans for new EP-III/IV vertical well underway
-- Cambay Resource Update
Oilex Ltd (the Company) reaffirms its commitment to unlocking
the multi TCF in-place tight gas potential in its onshore Cambay
Block, Gujarat state India. The Company is at an advanced stage in
completing a detailed working plan to take the Cambay project
forward and the results to date support a vertical well targeting
recovery of core from the Eocene siltstone (EP-IV or Y Zone).
A vertical well, will seek to obtain core samples from the EP-IV
Zone reservoir for drill and fraccing optimisation studies. This is
essential prior to drilling a horizontal extension for potential
later fraccing and exploitation of the Eocene siltstones. The well
will also have the potential to test the shallower, productive,
OS-II conventional reservoir or may be later used to frac and test
the EP-IV based on results of the core. The detailed planning for
this well is still being finalised and is subject to JV/Budget
approvals. This approach allows the Company to take advantage of
the lower cost vertical well drilling rates in India at
present.
Financing
As at 31 May 2016, the Company's cash resources were
approximately A$6.3 million.
The Company continues to engage with its joint venture partner
Gujarat State Petroleum Corporation (GSPC) to resolve outstanding
cash calls and gain approval of the 2016/2017 work programme and
budget. The resolution of these matters is essential for the
Company to extract maximum value from the Cambay Field. Various
approaches to progress work at Cambay are being considered.
Whilst the working plans for the field are being finalised and
approved, Oilex as operator, continues to bear the ongoing costs of
the joint venture.
Production Update
Production from the block for the month of May was approximately
42 boepd (gross) with the bulk of production coming from the
Cambay-77H EP-IV reservoir. Both Cambay-73 and Cambay-77H have been
shut-in while awaiting government approval for the continued
production of test gas from these wells.
Production at Bhandut-3 well averaged 120 boepd in May. The
field is being closely monitored while an extension of the
permitted production plan is being approved. While tubing head
pressure at the well has been maintained, some formation water has
been identified with the gas.
Resources Update
In April 2015, the Company tabled the reserve and contingent
resource volumes associated with the EP-III/IV (X and Y Zones)
resulting from the review undertaken by third party certifier,
RISC. Since that time, a number of key factors have changed
including:
i) a change in economic assumptions related to lower gas prices
being realised because of the world wide fall in oil and gas
prices;
ii) Oilex's joint venture partner's lack of approval of ongoing work;
iii) the resultant deferral in project timing which pushes the
recovery of reserves to beyond the current term of the PSC. Note
that the Company can apply for two PSC extension periods of 5 years
each.
On this basis, RISC has recommended that the reserve volumes be
re-classified to contingent resource. It should be noted that the
volume of hydrocarbons has not been amended. The updated
recoverable hydrocarbon volumes are tabulated below:
Net Condensate
Net Gas Volume Volume
bcf million bbl
------------------- -----------------------------
1P 2P 3P 1P 2P 3P
---------------------------------- ----- ----- ----- --------------- ----- -----
At April
2015 Reserves Y Zone 0 93 170 0 3.6 7.8
------------ ----------
At June
2016 0 0 0 0 0 0
----- -----
1C 2C 3C 1C 2C 3C
---------------------------------- ----- ----- ----- --------------- ----- -----
At April Contingent X and
2015 Resources Y Zones 215 324 558 12 23.8 46.8
------------ ----------
At June
2016 215 417 728 12 27.4 54.6
------------------------------------ ----- ----- ----- --------------- ----- -----
Table shows Oilex Net Working Interest
(45%) Reserves and Contingent Resources
Reserves in Y Zone have been
reclassified Contingent Resources
Refer to ASX announcement
16/04/2015 for further details
Commenting on the update Mr Salomon said "Last week's agreement
with Zeta Resources Limited to end legal proceedings between the
parties has provided Oilex with a clearer path forward and was a
key priority for us. The revitalised management team can now gather
momentum on the path to the potential development of Cambay that
reflects what was learned from the previous wells. We look forward
now to resolving issues with GSPC and progressing work at
Cambay".
For and on behalf of the Board
Jonathan Salomon
Managing Director
For further information, please contact:
Investor Nominated Media Enquires Media Enquiries
Enquiries Adviser (UK) (Aus)
Oilex Ltd Strand Hanson Vigo Communications Citadel-MAGNUS
Joe Salomon Limited Public Relations Michael Weir
Managing Nominated Patrick d'Ancona/Chris Email:
Director Adviser McMahon mweir@citadelmagnus.com
Email: oilex@oilex.com.au Rory Murphy/Ritchie Email: Tel: +618
Tel: +61 Balmer patrick.dancona@vigocomms.c 6160 4900
8 9485 3200 Email: om Australia
Australia oilex@strandhanson.co.uk chris.mcmahon@vigocomms.com
Tel: +44 20 Tel: +44 20
7409 3494 7830 9700
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 20 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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