8th Sep 2008 07:00
8 September 2008
SUBJECT: SECOND PHASE DRILLING PROGRAM COMMENCES IN OMAN
Oilex Ltd is pleased to advise that the Sarha-2 well spudded at 23:50 hours on 05 September 2008. The well is the first in the second phase of drilling that comprises a continuous sequence of 4 wells in Block 56 Exploration and Production Sharing Agreement ("EPSA") area, Sultanate of Oman.
The well will initially be drilled by the Abraj Rig 204 as an exploration and appraisal well to evaluate the same oil bearing zones that were intersected in Sarha-1 discovery well. On conclusion of the exploration phase of drilling, the well will be drilled horizontally into the oil zone tested at the nearby Sarha-1 well and used for extended production testing. Oil production rates in the range 300-700 barrels per day are anticipated.
Drilling operations in the exploration phase are planned to take 17 days to reach total depth at 1,650 metres.
Background
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 pipeline network from those producing fields in the main part of the South Oman Salt Basin is only about 30 km to the west of the Sarha wells.
Oilex has been pursuing an aggressive exploration program in Oman since the award of Block 56 to the joint venture in July 2006. Three wells, two of which encountered oil, have been drilled and the acquisition of 1,000 km of 2D seismic and extensive reprocessing of existing 2D and 3D seismic data has been concluded. A 3D seismic program covering 400 km2is planned to commence in November 2008.
Sarha-2 Objectives The well is planned to evaluate proven Permo-Carboniferous reservoir intervals in the Gharif and Haima formations which were not fully evaluated at Sarha-1 due to hole problems. These are major productive horizons across Oman. Following the evaluation of these zones, the well will be plugged back and a 500 metre horizontal section will be drilled in the Al Khlata formation and completed for production to evaluate the zone which tested oil at the Sarha-1 exploration well. This extended production test is planned for a minimum period of 120 days with produced oil trucked and sold to a nearby PDO receiving station.
Results from this production test will be used for planning the full field development of the Al Khlata oil zone.
Future Program Sarha-2 will be followed by 2 further exploration wells (Prospects D and J) which will evaluate structural features similar to the Sarha discovery and neighbouring fields in Block 6. An additional exploration well (Prospect A) will follow as the last well in the current sequence and will investigate a much larger, high relief feature in the central Block 56 area. Formal naming of the prospects is to be confirmed by Oman government authorities.
Oil-in-Place Estimates Low-high estimates of total oil-initially-in-place on a 100% basis for the next four drilling locations on Block 56 prospects are given below based on latest mapping. The estimate for Sarha Field is for the entire area of the field at the Al Khlata Formation reservoir only.
Note: mmstbo = million stock tank barrels of oil
Prospect/Field Range of Estimates of Oil-Initially-in-Place (100% basis) Sarha Field 10 - 77 (37 mean) mmstbo Prospect-D 12 - 196 (78 mean) mmstbo Prospect-J 13 - 105 (48 mean) mmstbo Prospect-A 19 - 213 (94 mean) mmstbo
Figure 1- Block 56 Prospects, Leads and Well Locations (see report on Oilex website)
Participants in the Block 56 EPSA are:Joint Venture Party Participating Interest Oilex Oman Limited (Operator) 25% Videocon Industries Limited 25% GAIL (India) Limited 25% Hindustan Petroleum Corporation 12.5% Limited Bharat Petroleum Corporation 12.5% Limited Yours sincerely,B. H. McCarthyManaging Director
For further information, please contact:
Ray Barnes, Technical Director, Oilex Ltd Tel. +61 8 9485 3200 (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 geology and Ray Barnes, B.Sc. Hons. the Technical Director of Oilex Ltd who 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 whichand a glossary of terms used in the oil and gas industry is available at www.spe.org.
vendorRelated Shares:
OEX.L