Oilex Resumes Cambay Operations

Oilex advised that operations on the Cambay-76H horizontal well in the onshore Cambay Field, Gujarat State, India, resumed at 02:30 hours (WST) on December 6, 2011. The operations had been suspended since the end of August 2011, when the coiled tubing milling
assembly, which was being used to mill out the fracture stimulation stage seat components, became stuck in the wellbore.

On August 31, Oilex advised that it would mobilize a workover rig to recover the milling tool string and subsequently prepare the well for clean-up flow and production testing. Personnel, materials, and services, including manufacturing specialist retrieval equipment, have been acquired and the work over rig has been mobilized to site and rigged up.

Pressure at the wellhead has increased to approximately 1200psi. During the past week the well was "killed" for installation of a Blow Out Preventer (BOP). This build-up of pressure in the wellbore and the previously reported initial flowback of hydrocarbons and stimulation fluid in August, are interpreted to be encouraging for clean up and flow testing the well.

The primary objective of the well is the acquisition of data from a long term production test to assess the potential of the Y Zone interval of the Eocene "tight" reservoirs. The results of this production test will also provide important information for the next stage of the independent hydrocarbon assessment. The initial hydrocarbon assessment by Netherland Sewell and Associates Inc was reported by the Company on October 11, 2011.

Reports on operations will be made when material events occur and weekly updates will not be issued.

The participating interests in the Cambay PSC are:

  • Oilex Ltd (Operator) 30%
  • Oilex NL Holdings (India) Limited 15%
  • Gujarat State Petroleum Corporation Ltd 55%