30th Apr 2007 07:01
OILEX LTD
30 April 2007
Centralised Company Announcements Office
Australian Stock Exchange Limited
10th Floor20 Bond StreetSydney NSW 2000Dear Sir,subject: OPERATIONS UPDATE
Oilex Ltd is pleased to advise of progress on operations being conducted on the Cambay and Sabarmati Fields, onshore Gujarat, India.
Sabarmati Field
Background - Sabarmati-1 is the sole producing well in the Sabarmati Production Sharing Contract area. This well was the subject of a fluid influx study in 2006 which indicated that crude oil production could be increased on a sustainable basis with the installation of an hydraulic sucker rod pump.
Operations - The pumping unit was installed at Sabarmati-1 and the well brought into production. The previous production rate of 2-5 barrels of oil per day (bopd) plus water has been substantially increased to an average rate of 97 bopd, plus water, which is at the upper end of our range of expectation. The flow rate will continue to be monitored closely and the pump adjusted to optimise the oil production rate.
Participants in the Sabarmati Production Sharing Contract are:
Joint Venture Party Participating Interest Oilex (Operator) 40% Gujarat State Petroleum Corporation Ltd 60%
Cambay Field
Background - Cambay-72 was drilled in September 2006. Its location was selected from maps made prior to the acquisition of the 3D seismic survey. The well tested oil from the deeper Eocene EP IV in early February.
The primary target was the Oligocene OS II sandstone potential oil reservoir which has a gross thickness of 16 metres at this location. The reservoir is poorly consolidated and an attempt to test this zone last month was aborted after sand influx plugged the downhole test equipment during the initial cleanup flow period.
Operations - Workover operations resumed at Cambay -72 with the rigging up of the John-50-V workover unit and the re-entry of this well. Following a period conditioning the completion fluids to control the flow of oil and gas to surface, the bottom hole assembly, including sand control equipment, is being installed prior to recommencing the test.
Participants in the Cambay Production Sharing Contract are:
Joint Venture Party Participating Interest * Oilex (Operator) 45% Gujarat State Petroleum Corporation Ltd 55%
* The participating interests are subject to the approval of the Government of India for the assignment of 8.33% interest from Oilex (currently 53.33%) to GSPC (currently 46.67%). The parties are currently sharing costs in proportion to the current participating interests. The costs will be adjusted following Government approval of the assignment.
Contingent Liability ATP 794P- Oilex advises that full and final settlement has been reached on confidential terms with respect to the claim made by Abrolhos Oil & Gas Pty Ltd and Pacific & Oriental Investments Ltd in relation to Oilex's former interest in a portion of Queensland ATP 794P. This contingent liability was referred to in the Company's March 2007 quarterly report.
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)
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.
ABN 50 078 652 632 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
OILEX LTDRelated Shares:
OEX.L