8th May 2007 07:00
7 May 2007
OPERATIONS UPDATE - CAMBAY, INDIA
Oilex Ltd is pleased to advise of progress on operations being conducted on the Cambay-72 production test, onshore Gujarat, India.
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 continued at Cambay-72 with the installation of the bottom hole assembly, including sand control equipment. Following a delay due to a leaking packer, a brief clean up flow was carried out, and downhole pressure gauges run. The John-50-V rig was subsequently released to undertake pre-drill activities to expedite the Phase 2 drilling program planned for the Cambay Field starting in August.
An ongoing flow test with shut-in periods to gather pressure data will continue at Cambay-72 until a stable oil production rate is established. We expect this to occur over an extended period because of the sub-optimal downhole conditions in this well including the probability of formation damage by the heavier mud weight that was needed to control over-pressure in the deeper Eocene when the well was drilled; limitations on the maximum possible flow rate caused by the downhole gauges and the sand screens; the limited zone of perforations (3.6m of a gross 16m interval); and the small diameter surface choke (6 mm) that will continue to be used until a stabilised flow with no sand production is achieved.
The well continues to produce completion fluid (saline water), oil and gas. Further operational updates will be made when there is material information to report.
Comment - Cambay-72 has proven the presence of the oil interval in the OS II sandstone with no evidence of formation water and this zone will be drilled as either the primary or secondary objective in three of the wells confirmed for the next phase of drilling, anticipated to commence in August. This drilling program will provide the additional data required to quantify the reserves at this and other reservoir levels in the Cambay Field by the end of 2007.
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 sharing costs in proportion to the current participating interests. The costs will be adjusted following Government approval of the assignment.
Sabarmati-1 is on production and no further operational updates will be made unless there is a significant change in the status of the well.
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.
Email: [email protected] Web: www.oilex.com.au
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