26th Mar 2015 08:16
LONDON (Alliance News) - Oilex Ltd saw its shares rise early Thursday after it said construction of the oil and gas construction facilities at the Cambay-73 well in India was progressing well and it hopes the joint venture will be able to start production during May.
The company has a 45% participating interest in the Cambay field through a joint venture with Gujarat State Petroleum Corporation Ltd and Niko Resources Ltd.
It said overall progress with the build of the production facilities at the frac'd Cambay-73 well is now 77% complete, with electrical system installation almost complete while mechanical fabrication 82% complete. Connection of the low pressure gas pipeline system to the plant is the responsibility of the gas buyer and is expected to be completed during April 2015, it said.
"Various pre-commissioning activities should commence next week and costs are forecast to be within budget despite some delays in equipment delivery," Oilex said in a statement.
Cambay-73 will supply gas to a low pressure gas market in the vicinity of the Cambay Field and is expected to produce approximately 50-60 barrels of oil equivalent per day of gas and condensate. The condensate will be separated at the field and trucked to a nearby refinery together with other Cambay crude oil.
"Oilex is very pleased with construction progress at Cambay-73 which should enable the Joint Venture to commence production during May 2015. This will be the first gas produced and sold from the Y zone formation within the Cambay Contract Area and it will be the first gas sold from the Cambay Field in over 23 years. Commercial production from Cambay-73 is a key initial step to achieving the company's objective of becoming cash flow positive from operations in India in the second half of 2015," Oilex Managing Director Ron Miller said.
Oilex shares were up 18.1% at 2.81 pence early Thursday, making it one of the best-performing stocks on the AIM All-Share index.
By Steve McGrath; [email protected]; @stevemcgrath1
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