21st Apr 2006 07:16
OILEX NL21 April 2006Centralised Company Announcements OfficeAustralian Stock Exchange Limited10th Floor20 Bond StreetSydney NSW 2000Dear Sir,RE: DRILLING PROGRAMME TO START AND POTENTIAL RESOURCE ESTIMATE FOR CAMBAY FIELD WESTERN HIGH, GUJARAT, INDIAOilex is pleased to advise that a drilling programme is planned to commence onCambay Field Western High, Gujarat in June. The Cambay Field Joint Venture (JV)approved the programme at a meeting of the Operating Committee in New Delhirecently. Oilex also announces today its first estimates of the hydrocarbons inplace for the Oligocene OS II horizon in this portion of the Cambay Field,which is the immediate objective in this drilling programme. The best estimatepotential resource volume in place is 29 million barrels of oil and 34 billioncubic feet of gas, with a low to high range for oil of 13 to 84 millionbarrels.The Cambay Field was discovered in 1957 and over 60 wells have been drilled onthe block. The majority of the wells have been shut in for extended periods oftime because of sand or water incursion or downhole equipment problems. A smallnumber of wells are producing oil on an intermittent basis. Oilex, togetherwith its JV partners, intends to conduct drilling operations to betterunderstand the field before considering redevelopment alternatives.Oilex recently announced that it had increased its participating interest inthe Cambay Field to 45% (from 30%) as part of a transaction involving two othersmall fields. The acquisition of the additional 15% interest remains subject toapproval from the government of India.Oilex is the nominated Operator for the JV and presented the 2006-2007 workprogramme and budget to the JV in New Delhi. The programme is laid out in twophases that are fundamentally separated for logistic reasons due to the monsoonseason between mid June and October. In the first phase, 2 firm and 1contingent well are planned to be drilled on monsoon pads starting early June.Oilex has sufficient financial resources to fund its share of the first phaseof the programme. Concurrently, Oilex is investigating the possibility ofacquiring a 3D seismic survey over the western part of the block to commencelate May and to be completed during a 15-20 day gap before the monsoon. Thesecond part of the 3D seismic survey will be acquired over the eastern half ofthe block after the monsoon.The advantage of this phased programme is that well and seismic data will beavailable for refining seismic coverage and well locations prior to thecommencement of the second phase of work, post-monsoon. Modern well dataincluding wireline logs, formation pressure and fluid characteristics will beacquired during drilling and used to normalise the existing data set which hasbeen digitised and correlated across all available wells.Mapping completed to date is based on wireline correlations of notablestratigraphic markers and these maps have been used to pick the locations forthe wells in the first phase of drilling. The structure of particular interestin the western part of the block is a north-south trending faulted anticlinealong which many old wells have produced oil and gas or have strong indicationsof oil and gas in good quality reservoirs, albeit in relatively low volumes.Reservoir rocks occur throughout the Tertiary section in the Eocene, Oligoceneand Miocene and these intervals will be evaluated thoroughly by the first phasewells. These sandstones are proven producers in fields immediately to the northand south of Cambay.Three locations have been selected from the several alternatives,depending on weather conditions and drilling results, either 2 or 3 wells willbe drilled to depths of up to 1,900 metres.[refer website: www.oilex.com.au ]Figure 1 - Depth Map of OS II Sandstone ReservoirRESOURCE ASSESSMENT - OS II HORIZONThe first estimates of hydrocarbons in place have been completed and additionalwork is ongoing to define with a higher level of confidence the characteristicsof the reservoir and the fluid composition. The estimates are given for theOligocene OS II sandstone on the Western High only, which is the primaryobjective horizon in the phase-I drilling programme. No estimates for otherreservoir objectives have been completed at this point.The best estimate potential resource volume in place is 29 million barrels ofoil and 34 billion cubic feet of gas. The range of volumes for oil are 13 to 84million barrels potential oil in place. On the basis of data analysed fromexisting wells, the wells have been optimally located to intersect the possibleoil leg of the western high structure. RESOURCE VOLUME-IN-PLACE Low Estimate Best Estimate High Estimate OIL (million stock tank barrels) 13 29 84 GAS (billion cubic feet) 15 34 112 CONDENSATE (million stock tank 0.6 1.7 9barrels) Figure 2 -Estimates of the potential hydrocarbons in place(100% basis) calculated for the Western High trend stratigraphic level OS II sandstones onlyFor and on behalf of the Board,B. H. McCarthyManaging Directorcc: Directors: MC/GIJ/RGBThe information in this report has been compiled by the Managing Director ofOilex NL, Dr Bruce McCarthy B.Sc. Hons. PhD (Geology) who has over 26 yearsexperience in petroleum geology. The estimates of hydrocarbons in place wereprepared by Dr Paul RobinsonB.Sc. Hons. PhD (Geology), an independentconsultant to Oilex NL who has over 25 years experience in petroleum geologyand resources estimation and is a member of the AAPG and were reviewed by MrRay Barnes, the Technical Director of Oilex NL who has over 35 years experiencein petroleum geology and is a member of the AAPG. Dr Robinson and Mr Barnesboth reviewed this announcement and consent to the inclusion of the estimatedhydrocarbons in place in the form and context in which they appear.For further information, please contact:Bruce McCarthy, Managing Director Oilex NL Tel. +61 8 9226 5577 (WesternAustralia)Archie Berens, Director Pelham Public Relations Tel. +44 20 7743 6679 (UnitedKingdom)Work programme and budget subject to Cambay Field Joint Venture ManagementCommittee approval including the Directorate General of Hydrocarbons, India. Level 3, 50 Kings Park Road West Perth WA 6005 Australia, PO Box 588 West Perth WA 6872 Australia Telephone: (+61 8) 9226 5577 Facsimile: (+61 8) 9226 2108 Email: [email protected] Web: www.oilex.com.au ENDOILEX NLRelated Shares:
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