14th Jul 2014 08:35
LONDON (Alliance News) - Oilex Ltd Monday said plug milling operations have been completed at its Cambay-77H well in India, eight fractures have been connected to the well bore and gas has flowed to the surface during its milling operations.
The oil and gas exploration and development company said that, following completion of its fracking tests last week, eight fractures into the reservoir have now been connected to the well bore.
The company said that during milling operations, the well started to flowback gas unaided to the surface and its clean up operations will continue under controlled conditions to minimise the risk of damage to its underground fractures.
Oilex said that as soon as the Cambay-77H well is stable, the production test will start and the commerciality of the reservoir will be quantified.
"Importantly, the elevated over-pressure of 5,000 pounds per square inch and the strong flow back characteristics are very positive results. Oilex is looking forward to commencing of the production testing after sufficient frac fluids have been recovered from the well," Managing Director Ron Miller said in a statement.
Cambay-77H is located adjacent to the Cambay-76H horizontal well that underwent a successful multiple-staged fracture stimulation programme along its 633 metre lateral section in 2012 but was suspended prior to testing due to downhole mechanical problems. Oilex says the Cambay-77H well design incorporates all of the key operational and technical learnings that have arisen from a forensic engineering analysis of Cambay-76H by multiple expert parties.
Oilex said on Monday that the well logs continue to compare favourably to its nearby Cambay-73 vertical well, which produced at roughly 1 million standard cubic feet of gas per day.
The company also noted that hydrocarbons produced in returning frac fluids will be monitored and all water based frac fluids will be stored in a purpose built pit on site.
"Further analysis of the fracture stimulation programme and production data will be needed to quantify the reservoir deliverability. It has been a long journey back from Cambay-76H and Oilex looks forward to a bright future, focused on value for its shareholders and methodical in its delivery," Miller added.
Oilex shares were up 9.5% to 6.95 pence, putting the company amongst the top AIM All-Share risers during early trading on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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