12th Feb 2008 07:00
12 February 2008
SUBJECT: REVISED OPERATIONS REPORT - OMAN DRILLING PROGRAM
Oilex Ltd advises that preparations are underway to conduct an open hole Drill Stem Test (DST #1A) of the Haima Sandstone over the interval 1626-1641 metres Measured Depth (MD) in the Sarha-1 well in Exploration and Production Sharing Agreement area Block 56, Oman.
During the past week, open hole DST #1 was conducted over the interval 1626-1676 meters using a Progressive Cavity Pump which recovered increasingly saline water, interpreted to be a preferential influx of a large volume of lost drilling fluids and formation water from a major fracture system originating at depth within the Huqf formation and which is likely to have prevented reservoir fluids within the test interval from being produced. For this earlier test, a cement plug was set at a depth of 1676 metres MD in an attempt to isolate these fracture systems. Given the oil shows seen while drilling and potential oil pay within the Haima and Huqf reservoirs interpreted from logs, another shallower cement plug has been set below 1641 metres to further isolate the fractures and enable a valid production test of the Haima Sandstone interval.
DST #1A continues the series of production tests in the Sarha-1 well with the objective of determining whether moveable hydrocarbons are present in the Huqf carbonates, the Haima Sandstone, the Al Khlata Formation and the Lower Gharif sandstone as tabulated below:
DST Objective Test Gross Interval(metres MD) #1 Haima/Huqf Open Hole 1626 - 1676 #1A Haima Open Hole 1626 - 1641 #2 Al Khlata Cased hole 1255 - 1295 #3 Lower Gharif Cased Hole 1165 - 1185
The quality of the oil in the oil fields of the South Oman Salt Basin is variable from lighter, mobile fluid to heavier, viscous oil. In the event that "heavier" oil is present in these reservoirs at Sarha-1, testing of these zones includes the installation of a pump and an extended flow period to establish stabilised rates.
Participants in the Block 56 Exploration and Production Sharing Agreement areaare: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 29years 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. Estimates ofoil-in-place arereported in accordance with the standard definitions set out by the Society of Petroleum Engineers, further information on which is available at www.spe.org.
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