25 Feb 2008 07:00
25 February 2008
SUBJECT: OPERATIONS UPDATE SARHA-1 TEST PROGRAM
Oilex Ltd is pleased to advise that oil has been recovered at the surface in cased hole Drill Stem Test (DST) #2 of the Al Khlata Sandstone in the Sarha-1 well located in Exploration and Production Sharing Agreement Block 56, Oman.This result achieves the primary test objective of confirming the presence of moveable oil in the anomalous zone interpreted from well logs and cuttings in this formation.
A series of remedial cementing operations were performed above and below the interpreted hydrocarbon zone behind casing to isolate the interval from water bearing sandstones prior to commencing DST #2 over the interval 1255 - 1284 metres Measured Depth. A progressive cavity pump was run as part of the test string to recover the water cushion and drilling fluid lost to the formation and to provide additional lift to the produced fluids.
Although pump rates were varied in an attempt to establish a stabilised oil flow rate, the well produced erratically and was still cleaning up when the test was terminated. During the intermittent flow periods a total of 87 barrels of fluid was recovered, with up to 90% oil cut in the latter stages of the test.
Pressure and fluid data will be analysed to determine reservoir and oil properties for the DST#2 interval. Initial indications are that oil gravity is approximately 21.5 degrees API.
Preparations are underway to conduct DST #2A by adding additional perforations over the interval 1285 - 1295 metres MD to incorporate better quality Al Khlata reservoir section near the base of the oil column.
Participants in the Block 56 Exploration and Production Sharing Agreement areaare:Joint Venture Party Participating Interest Oilex Oman Limited (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.
OILEX LTD