Oilex announced a significant upgrade to its Reserves and Contingent Resources for the Cambay Field low permeability ("tight") Eocene reservoirs in Gujarat, India. This follows a nine month program of extensive technical studies on the Cambay Field "tight" reservoirs using proprietary low permeability reservoir technologies derived from similar "tight/shale gas" projects in North America.
The following summary of Reserves (net recoverable to Oilex's 45% interest, unaudited) is provided:
In its evaluation of the reserves and resources the Company was advised by two North American companies; NuTech Energy Alliance ("NuTech") a leader in advanced petrophysical, geological and fracture stimulation solutions for "tight" and "shale gas" reservoirs, and Morning Star LLC ("Morning Star"), a worldwide petroleum consulting group with expertise in reserve certification of "tight" reservoir projects.
The studies indicate a very good correlation between the Cambay Eocene reservoirs and the Eagle Ford and Haynesville reservoirs, two of the most prolific "tight/shale gas" plays in North America. The Cambay Eocene reservoirs that have been analyzed display relatively good porosity for "tight reservoirs" and with a gross thickness of 200 to 500 meters these zones are substantially thicker than most North American "tight/shale" reservoirs. The studies have modeled Estimated Ultimate Recoveries (EUR's) of between 6 and 11
Oilex expects to submit data in October 2010 for independent reserves certification in early 2011.
Oilex will, subject to Joint Venture and Indian Government approval, further evaluate the "tight" reservoir potential with drilling and production testing using modern, multi-stage fracture stimulation technology. These operations are expected to continue through the first half of 2011 as equipment and materials become available.
Oilex's Managing Director, Dr Bruce McCarthy (ex-Cairn Energy), who has been based in India to lead the "tight" reservoir project, said, "The Company has renewed its focus on India and has made significant progress in unlocking the potential of the Cambay "tight" Eocene reservoirs that extend over the 40,000 acre contract area. Key to this success has been applying leading-edge North
"Two years ago Oilex conducted well tests on the Eocene section that flowed hydrocarbons to surface from conventional vertical wells, a very encouraging result for "tight" reservoirs. Oilex now intends to apply horizontal drilling and multi-stage fracture stimulation technology to improve on the flow rates and confirm commerciality of the Eocene tight reservoirs."
Oilex will commission an independent reserves certification after completion of further technical studies, well designs and well locations, in October, 2010.
Oilex (45%) operates the Cambay Field Production Sharing Contract on behalf of its Joint Venture with Gujarat State Petroleum Corporation Ltd (55%, "GSPC"). GSPC is India's most active State Government-owned oil and gas company. It is a large vertically integrated energy company with assets across India and overseas.
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