27th Oct 2014 08:38
LONDON (Alliance News) - Oilex Ltd shares fell in early trade on Monday after the company said it has started preparations on the production test on the Cambay-77H well.
The company said an analysis undertaken by oil and gas consulting firm RISC showed the Y zone flow parameters for the well were within its expectations, but said that as the well is the first of its type in India, the duration required to complete flow back operations is unknown as there is no reference point for the reservoir.
Oilex said the Cambay joint venture is now investigating selling gas from the site concurrently with the ongoing water recovery operations following completion of the production test. It said it intends to capture early revenue, similar to wells operated in North America, by using gas sales as part of the flowback operations.
"Achieving all the proof of concept objectives in Cambay-77H is nearly complete with many key insights being identified. In particular, possible wider frac spacing implemented in future wells will allow more reservoir energy to be used for producing hydrocarbons and less on recovering operations water during flowback, while being more cost effective," said Oilex Managing Director Ron Miller.
Oilex shares were down 14% to 3.75 pence on Monday morning, making it one of the worst performers on the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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