Oilex Progresses Proof of Concept Objectives for Cambay-77H Well in Gujarat

Oilex Ltd. announced Friday significant progress in achieving the proof of concept objectives for Cambay-77H well in Cambay production sharing contract in Gujarat, India. These objectives are critical to demonstrating the Cambay Field can be commercially developed using multi-stage fracture treatments (fracs) in horizontal wells. Cambay-77H has a very short lateral section of 1,148 feet (350 meters) with 8 fracs that were successfully completed in 4 stages.

The key objectives achieved include:

  • Efficient drilling operations that demonstrated repeatability by successfully intersecting the Y zone at the predicted depth, while steering around other existing wells
  • Well logs confirm the Y zone is hydrocarbon bearing
  • Provides confidence that the Y zone reservoir properties are laterally consistent, and any variability is within expectation
  • Successfully perforated, isolated and treated 8 fractures in 4 stages
  • All fracs interpreted to extend ~ 60m into the reservoir from the well bore which is interpreted to be sufficient for commercial production in longer laterals
  • “Plug and Perf” completion method is achievable and repeatable in India
  • Flowback activities, including recovery of Operations water from this type of well can be successfully executed in the Cambay Field

Other key outcomes that influence the future commercialisation of Cambay Field are:

  • The hydrocarbon liquid to gas ratio (LGR) during flowback has been ~100 barrels of liquids per MMscf/d of gas. This ratio is 250 percent higher than expected which if sustained, leads to a much higher unit revenue stream in barrels of oil equivalent (Boe)
  • Oil and gas recovery started on the first day of flowback and gas sales during flowback operations in future wells is possible as the gas market is readily available. This leads to early cash flow and faster payback of well costs
  • Well modelling calibrated to flowback production over ~ 85 days indicates that frac spacing in future wells with longer laterals can be increased. Fewer fracs per unit length can lead to significant cost savings
  • Cambay-77H sustained production rate of .5 - 1.0 MMscf/d has been predicted using the well model calibrated to flowback production and is up to 185 percent greater than Cambay-73, which has a single frac in a vertical well. Cambay-73 was flowing .35 MMscf/d when shut in during June 2012 and will be returned to production subsequent to the installation and commissioning of facilities
  • The recovery of Operations water is >79 percent and therefore at the high end of expectation and North American experience. No formation water has been recovered to date which continues to confirm the thesis that no direct oil water contact (OWC) is accessible within the Y zone
  • As Cambay-77H is on “self-flow” with no artificial lift, a significant proportion of reservoir energy within the drainage area of the well has been used to recover large volumes of Operations water. This means less reservoir energy is available to produce oil and gas during the flowback period
  • Future wells with longer laterals and wider fracture spacing will have larger drainage areas and access more reservoir energy. Proportionately less energy should be needed to recover Operations water, resulting in higher gas and oil production rates

The Cambay JV’s progress at the Cambay Field compares favourably to other experiences in which a single operator is applying unconventional multi-stage fracture treatments in a new basin or field. Range Resources Corporation successfully applied Barnett Shale style fractures to the Marcellus Field from 2004 to 2008, which is now one of the largest producing gas fields in the world.

Range Resources “cracked the code” in the Marcellus with Well #4 when it achieved a flow rate of 3.2 MMscf/d. Oilex continues to draw on the experience of others to shorten the learning curve for Cambay Field development.

Managing Director of Oilex, Ron Miller, said:

“Oilex’s first mover strategy compares favorably to other successful companies that have been early entrants into newly identified tight/unconventional gas and oil plays. Delivering Cambay-77H with its proof of concept objectives is now almost complete. Upon completion of these objectives, Oilex will continue to focus on commercializing the Cambay Field and generating sustainable cash flow and profits for shareholders.”



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