2nd Jan 2008 07:00
2 January 2008
SUBJECT : OMAN DRILLING PROGRAM COMMENCES
Oilex Ltd is pleased to advise that the Sarha-1 exploration well was spudded on 31 December 2007. The well is the first of three exploration wells which will be drilled in a continuous sequence by Oilex in the Block 56 Production Sharing Contract Area, Sultanate of Oman using the Abraj Rig 204.
Current Operations
Sarha-1 exploration well was spudded at 11:00 hours (WST) on 31 December 2007. Current operations are drilling ahead in 12 1/4" hole at 242 m. Surface casing had been set in the period prior to arrival of the Abraj rig to expedite the program. Drilling operations are planned to take 18 days and total depth is expected to be reached at a depth of approximately 1650m.
Background
Oilex has been pursuing an aggressive exploration program in Oman since the award of Block 56 to the Oilex-operated joint venture in July 2006. In that time, Oilex has developed a significant operating capability within Oman with capacity to execute a major drilling campaign on behalf of the joint venture.
The Sultanate of Oman was chosen by Oilex and its partners as a Middle East country with a demonstrated and prolific hydrocarbon production history, a stable Government and a well developed and accessible hydrocarbon evacuation infrastructure. The Block 56 joint venture brings together a strong team of companies with the capacity and experience to bring a potential discovery in the area into production in a short timeframe, with Oilex as operator.
With the establishment of a strong local presence in Muscat, complemented by Oilex's experienced technical and management team based in Perth, a fast pace of exploration has been maintained. To date a significant volume of existing seismic data has been reprocessed and during 2007 a large program of new 2D seismic data was acquired. On the basis of the reprocessed data and existing 3D seismic surveys in the western part of the block, a number of exploration well locations were developed for drilling during 2008. The first of these wells is Sarha-1, located on the eastern flank of the South Oman Salt Basin adjacent to several producing fields.
Block 56 was awarded to the partnership after a competitive bidding round, the first in Oman's history. The Block was ranked highest of all Blocks on offer by the joint venture partners. The Block is located on the eastern flank of the south Oman salt basin, an area which has already seen significant exploration success and subsequent production. Several of the fields in this area hold over 500 million barrels of oil in place. Most of these fields were discovered by Petroleum Development Oman (PDO) during the last 20 years. The Sarha prospect is similar in its structural form and reservoir objectives to the nearby producing fields operated by PDO. The pipeline network from those producing fields in the main part of the South Oman Salt Basin is only about 30 km to the west from Sarha-1.
Sarha-1 Objectives
The well is planned to evaluate the prolific Permo-Carboniferous reservoir interval which is a major productive horizon across Oman. In addition the well will be deepened to intersect the prospective Cambrian Huqf Formation which has been found oil-bearing in adjacent wells.
The Sarha-1 area is covered by a modern 3D seismic dataset and should the well prove successful this will aid in expediting field development activities. Shallow, low cost wells in an area of known oil accumulations located in close proximity to infrastructure make this an attractive region in which to explore.
Future Program
Sarha-1 will be followed by Ghadaq-1 in the western province of conventional plays and Alyanbou-1, in the frontier area on the northern salt wall trend. Four wells are planned for Q3 2008 on locations that will depend to a large extent on the results from the initial 3 well program and a further 4 wells are anticipated to be drilled in late 2008 and Q1 2009.
Resource Estimates
Potential oil resource-in-place estimates are given below and are based on mapping of a single potential 10m thick reservoir unit in the shallower Permo-Carboniferous objective. No estimates have been made for the potential volumes in the Huqf Formation deeper objective or for the potential of multiple reservoir units at the shallower level.
Resource Range: Sarha-1 6-40 mmstboip (20 mean) + large Huqf potential
Ghadaq-1 5-30 mmstboip (14 mean) + large Huqf potential
Alyanbou-1 10-375 mmstboip (135 mean)
(mmstboip - million stock tank barrels of oil in place)
Block 56 - well locations, prospects at Top Natih Formation NOTE: To view the Well Map please refer to the Oilex Website.
Participants in the Block 56 Production Sharing Contract are:
Joint Venture Party Participating Interest Oilex (Oman) Ltd (Operator) 25% Videocon Industries Limited 25% GAIL (India) Limited 25% Hindustan Petroleum Corporation Limited 12.5% Bharat Petroleum Corporation Limited 12.5% Yours sincerely,B. H. McCarthyManaging Director
For further information, please contact:
Ray Barnes, Technical Director, Oilex Ltd Tel. +61 8 9226 5577 (Western Australia)
Archie Berens, Director Pelham Public Relations Tel. +44 20 7743 6679 (United Kingdom)
RFC Corporate Finance Ltd acts as Oilex's Nominated Adviser, contact Stuart Laing +618 9480 2506
The information in this report has been compiled by the Managing Director of Oilex Ltd, Bruce McCarthy B.Sc. Hons. PhD (Geology) who has over 26 years experience in petroleum geologyand Ray Barnes, B.Sc. Hons.the Technical Director of Oilex Ltdwho has over 35 years experience in petroleum geology and is a member of the AAPG & EAGE. The oil-in-place estimate is reported in accordance with the standard definitions set out by the Society of Petroleum Engineers, further information on which is available at www.spe.org.
OILEX LTDRelated Shares:
OEX.L