24th Mar 2014 08:59
LONDON (Alliance News) - Oilex Ltd saw its shares fall Monday after it reported mechanical problems with the rig drilling the Cambay-77H well on its Cambay site in Gujarat State, India.
In a statement, the company said it has ordered new parts after the Essar Land Rig #4 experienced mechanical issues while it was pulling out of hole to service a mud pump. The new parts have been ordered locally and from Houston in the US, and Oilex expects the rig to be operational within a fortnight.
"While this is untimely, drilling rigs do experience mechanical issues from time to time. We are working closely with Essar to expedite the return of the Rig to operational status. Excluding the instances of delays associated with rig mechanical issues, the operational activities have been completed in line with the anticipated durations," Oilex Managing Director Ron Miller said in a statement.
The company is circulating synthetic oil-based drilling mud to keep the well bore clean and the drill pipe is being rotated on a regular basis and contingency plans are in place to ensure this continues while the rig is being repaired, it said.
In a separate statement, the company said it has started mobilising the aircraft and personnel for the acquisition of the airborne gravity/magnetics survey over Special Prospecting Authority STP-SPA-0055, one of its onshore Australia prospects.
The aim of the survey is to determine whether a structure known as Wallal Graben extends into the area. The structure is in Oilex's adjacent sites
"The initiation of our Canning Basin exploration programme within STP-SPA-0055 is an exciting milestone for Oilex. This is a true "frontier area" with limited data coverage at present. The prospectivity of our Canning Basin acreage will be significantly enhanced should the Survey data confirm the Wallal Graben does extend into this area," Miller said.
The survey acquisition should start before the end of March and take approximately 10 days to complete subject to weather and flying conditions, the company said.
Oilex shares were down 9.1% at 3.75 pence early Monday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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