18 Jan 2008 07:00
MEDIA RELEASE 18 JANUARY 2008
OILEX LAUNCHES HIGH IMPACT DRILLING PROGRAM TO DRIVE GROWTH IN 2008
Fully funded Exploration & Development Program underway
Australian-based Oilex Ltd has hit the ground running in 2008, capitalising on a successful two-year campaign building a highly prospective exploration and appraisal portfolio, today announcing progress on an aggressive 15-17 wellwork program focused on the development of the Company's Cambay (India) and Pendalian (Indonesia) fields and achieving first productionin the coming year.
The Company announced in its update today (Friday) that the 2008 work program would focus on rapidly accelerating exploration activities in Oman, India and Indonesia, with up to 17 new wells planned, whilst continuing to evaluate the Company's interests in Australia and in the Joint Petroleum Development Area (JPDA) between Australia and Timor-Leste.
The Company has cash reserves of over A$54 million that will fully fund the planned exploration and development activities for 2008.
Oilex has exciting exploration drilling programs planned in Oman, India and Indonesia, providing a good balance of risk and reward for shareholders. The program commenced late last year with the Pendalian-3 oil discovery in Indonesia and the first well in Oman, currently drilling.
Oilex Managing Director, Dr Bruce McCarthy, said 2008 would be a landmark year with the potential for significant oil and gas projects expected to be brought on-stream, and a major exploration program already underway to boost the Company's reserves.
"2008 will be an exceptionally active year for Oilex, with our first priority being to confirm the reserve base in the main reservoirs in the Cambay Field, ahead of first production that could occur in the second half of the year," he said.
The Cambay Field has a current best estimate resource of 48 million barrels of oil in place and 356 billion cubic feet (bcf) of gas in place (including 52bcf of gas already produced) from two known reservoirs, the Oligocene ("OS-II") and the Eocene ("EP-IV").
Following the interpretation of 3D seismic data last year, Oilex announced a drilling program of six wells over the next nine months at the Cambay Field to confirm reserves in the two identified zones, whilst also evaluating the resource potential in deeper reservoir horizons, which are expected to provide significant exploration upside.
The newly built rig is on location and in the process of commissioning prior to spud of the first well, which is expected to occur within the next 3-6 weeks.
The Company's second priority development target is the West Kampar PSC, located onshore Sumatra, Indonesia, where a test program at the Pendalian Field conducted in 2007 confirmed oil flow at commercial levels of above 1,000 barrels of oil per day (bopd).
McCarthy said the immediate focus at West Kampar is to bring the Pendalian-3 well into production, expected to be at over 1,000 bopd and the acquisition of 50km2 of 3D seismic data on the Pendalian field to determine optimum locations for development wells, expected to be drilled in the Third Quarter (Q3) of 2008 and 2D seismic on the prospective Daludalu exploration trend in the north of the block.
"The Operator considers that between 3 and 5 development wells are likely at Pendalian, with first production targeted for the second quarter of 2008," he said.
"Both the Cambay and Pendalian Fields represent excellent low-cost, low-risk production opportunities for Oilex, which will provide early cashflow to underpin intensive exploration programs across the Company's portfolio," McCarthy continued.
Oilex currently has drilling underway at the Block 56 Production Sharing Contract Area, onshore Oman, where the exploration well, Sarha-1, spudded on 31 December 2007 and has recorded oil shows in the two main objective horizons. The well is the first of three exploration wells which will be drilled in continuous sequence by Oilex at Block 56, to be followed by four wells in Q3 and a further four wells in Q4.
Sarha-1 has a best estimate resource of 20 million barrels of oil in place (mmstboip) in the shallower, Permian objective, plus significant additional exploration upside in the Cambrian Huqf formation. The second and third wells, Ghadaq-1 and Alyanbhou-1, have a best estimate resource of 14 mmstboip and 135 mmstboip respectively, suggesting significant potential for a large scale discovery within Oilex's Oman Block 56.
"Oilex's strategy has been to build a portfolio of assets that, in 2008, can be progressively moved towards production to provide cashflow to fund further exploration activities," McCarthy said. "With the Company having started its drilling campaign in Oman, Cambay field drilling in startup mode in India and the potential to move into production at both the Cambay and Pendalian fields, we have an extremely active year with an attractive mix of exploration prospects across our permits around the rim of the Indian Ocean."
The information in this statement has been compiled by the Managing Director of Oilex Ltd, Bruce McCarthy B.Sc. Hons. PhD (Geology) who has over 27 years experience in petroleum geology. The estimates of hydrocarbons in place were reviewed by Ray Barnes, the Technical Director of Oilex Ltd who has over 35 years experience in petroleum geology and is a member of the AAPG. Mr Barnes reviewed this announcement and consents to the inclusion of the estimated hydrocarbons in place in the form and context in which they appear.
OILEX LTD