24th Mar 2006 07:00
OILEX NLLvl3, 50 Kings Park Road Western Australia 6005Tele; 618+ 9226-5577 Fax: 618+ 9226-210824 March 2006Alternative Investment MarketLondon UKDear Sir/Madam,Centralised Company Announcements OfficeAustralian Stock Exchange Limited10SYDNEY NSW 2000Dear Sir,RE: ACQUISITION of 30% interest - CAMBAY FIELD, GUJARAT, IndiaOilex NL (Oilex) is pleased to advise that the Government of India has approvedthe assignment to Oilex by Gujarat State Petroleum Corporation (GSPC) and NikoResources of a 30% participating interest in the Production Sharing Contract("PSC") covering the Cambay Field located onshore Gujarat State, Western India[refer map attached].Cambay field is located in one of the most prolific petroleum provinces onshoreIndia close to existing pipeline and industrial infrastructure.Oilex will become the operator under the existing PSC and Joint OperatingAgreement and will earn its 30% participating interest by undertaking appraisaland development work programme of a value equal to 30% of the costs incurred byGSPC and NIKO that have not been recovered under the cost recovery provisionsof the PSC.Cambay Field HistoryThe field was discovered and developed initially by Oil & Natural GasCorporation (ONGC) of India in 1957-58 with the drilling of Cambay-1.Hydrocarbons were found in Oligocene and Eocene sandstones below about 1550metres. Subsequently 62 wells were drilled to develop and produce gas from oneOligocene reservoir; a small volume of oil from a deeper reservoir below 1730metres and gas from a shallower Miocene reservoir at about 1420 metres. In 1991the field was virtually shut-in because of sand and water influx and decline inreservoir pressure after producing about 48% of the Operator's estimatedreserve.The field was subsequently acquired by the GSPC and Niko Joint Venture in 1995and continued to produce gas at low rates and, in recent years, small volumesof oil.Oilex StrategyOilex has been conducting a detailed study of existing well data to preparerecommendations for a work programme to re-develop the field. The results ofthe studies and recommendations will be presented to the Joint Venture in earlyApril. In the event that the Joint Venture approves those recommendations,personnel and contractual arrangements for drilling materials and equipment arein place to facilitate the start of operations at the earliest opportunity.Oilex is very pleased to have achieved this important milestone in establishingits presence as an Operator in oil and gas exploration and production in theIndian Subcontinent. The support of the Ministry of Petroleum & Natural Gas andthe Directorate General of Hydrocarbons has been critical in achieving thisgoal and is much appreciated. Oilex looks forward to working with GSPC and Nikoin this exciting new venture.For and on behalf of the BoardDr. Bruce McCarthyManaging Directorcc: Directors: MC/GIJ/RBInformation in this report has been completed by the Managing Director of OilexNL Dr B.H. McCarthy B.Sc Hons. Phd (Geology) who has over 26 years experiencein petroleum geology.CAMBAY FIELD LOCATION - GUJARAT, INDIA 2 1Level 3, 50 Kings Park Road West Perth Western Australia 6005 P.O. Box 588 West Perth Western Australia 6872 Telephone (61 8) 9226 5577 Facsimile (61 8) 9226 2108 email: [email protected] www.oilex.com.au ENDOILEX NLRelated Shares:
OEX.L