Australia’s Oilex Ltd. reported Friday it has received endorsement from the Government of India for the sale of gas from the Bhandut-3 well, which is located within the Bhandut Field in India’s Cambay Basin. This is a critical milestone for returning the field to production, supplying gas to the local market and generating positive cash flow for the Company from a previously idle asset.
Now that endorsement of the gas sales agreement has been received, the Bhandut Joint Venture will proceed to establish the appropriate production facilities for Bhandut-3. This will include a compressed natural gas (CNG) loading facility that will enable CNG “bullet” trucks to be loaded at site for transportation of the gas to end users. Bhandut-3 gas is “lean” and therefore no material condensate production is expected.
As announced Aug. 20, 2013, Bhandut-3 flowed at a maximum rate of 6.5million standard cubic feet per day (MMscf/d) through a 0.39 inch (10 millimeter) choke with a flowing tubing head pressure of 1,190 pounds per square inch absolute (psia) during an isochronal test. The test confirmed the reservoir sand has a permeability of 124milliDarcy (mD), making it a conventional reservoir. It is planned to deliver approximately 0.5-1 MMscf/d from the Bhandut-3 well. The Company anticipates the cost of the production facilities payback in 7 months from commencement of production based upon the contracted gas price.
Managing Director of Oilex, Ron Miller, said:
“We are very pleased to receive the endorsement from the Government of India to sell gas from Bhandut-3 and restart production from the field to provide gas to the local market. The contracted price was determined by a competitive bidding process and remains Commercial-in-Confidence. Oilex continues towards generating additional cash flow through increasing production from its assets in India.”
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