Oilex: Cambay Test May Begin Next Month

Cambay Field in the Gulf of Cambay
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Oilex Ltd announced that its recommendation for the completion and testing of the Cambay-72 well has been accepted by the Government and Joint Venture parties ('JV'). The immediate forward program is to procure the services and workover rig to conduct a comprehensive test program on Cambay-72 with the aim of commencing operations at the earliest opportunity in January.

Deepening and testing of the Cambay-71 well has been approved in principle and a final decision will be taken when the results from testing of Cambay-72 and preliminary results of the 3D seismic survey (see below) are known. Operations are expected to commence in first quarter 2007.


The well was drilled to a total depth ('TD') of 1767m at which depth 51/2' casing was cemented in place and it was suspended. The Eocene section below about 1730m is significantly over-pressured and gas and oil flowed to surface during drilling. Evaluation of the data from the Eocene section has been concluded and a comprehensive testing program has been agreed by the JV.

Oilex is pursuing supply of equipment and a workover rig to undertake the work at the earliest opportunity. In the event that the Eocene tests are successful, the well will be placed on production and the testing of the shallower potential oil and gas bearing zones may be postponed to a later date. Testing operations are expected to begin in January, as soon as equipment is procured.


Cambay-71 intersected a section similar to that of Cambay-72 and was terminated above the over-pressured Eocene section at 1600m TD to allow for the option to test the Eocene potential reservoir horizons through larger diameter casing. Indications of hydrocarbons were recorded while drilling the main prognosed shallower reservoir intervals in this well. The potential remains to be confirmed because attempts to gather reliable pressure and fluid information from the shallower objectives were unsuccessful due, in part, to apparent plugging of the tools by very friable sand and mechanical failures.

Unlike Cambay-72, casing was not run in Cambay-71 through the potential oil and gas bearing zones and the plan is now to run 7' casing and to drill a larger diameter hole through the deeper Eocene objectives to the top of the Deccan basalts. Reservoir units immediately overlying the Deccan have been drilled and tested at rates in excess 1,000 bopd in the block immediately to the north of Cambay and equivalent intervals may be present at the Cambay-71 location. The 3D seismic survey may be useful as an indicator of the presence of the deeper targets and that will be determined from the preliminary field seismic data which should be available within the next two weeks, at the same time as we proceed with assessing the availability of a rig and services.

3D Seismic Survey

The 3D seismic survey covering the entire Cambay contract area (160 km2) was completed ahead of time on 5 December, under budget and injury free by the contractor. The preliminary data are of excellent quality and the initial processed data will be available in 5 weeks for interpretation.

Approvals for Assignment of Interests

Oilex is awaiting the approval of the Government of India for the assignment to Oilex of the additional interests in the Cambay, Bhandut and Sabarmati Fields acquired from Niko. Work programs for Bhandut and Sabarmati Fields will commence when the assignments are approved.

Participants in the Cambay Production Sharing Contract are:

			     Current      Post-approval
Oilex Ltd (Operator)         30.00%       45%                   
Gujarat State Petroleum      46.67%       55%                   
Niko Resources Ltd           23.33%          -                     

Oilex is acquiring an additional 23.33% equity interest in the PSC from Niko. GSPC is acquiring an additional 8.33% equity interest in the PSC from Oilex. Approvals are pending from the Government of India.


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