RISC Releases Resource Report for Oilex-Operated Cambay Field in India

Oilex Ltd. reported Thursday that RISC Operations Pty Ltd. (RISC), an Australian based, internationally recognized independent petroleum advisory group, has completed an independent Resource Report of the Eocene Formation of the Cambay field in Gujarat, India. This work follows on from its evaluation of Cambay-77H flowback and test data in December 2014. RISC has evaluated 2 of 6 potential Eocene reservoirs, the X and Y Zones, and the results for Reserves and Contingent Resources are summarized below.

Table 1: Estimated Cambay Field Reserves (Y Zone)

  • Total - Gross: 1P*: Gas (Bcf) - Nil; Condensate (MMbls) - Nil; 2P: Gas (Bcf) - 206; Condensate (MMbls) - 8.0; 3P: Gas (Bcf) - 377; Condensate (MMbls) - 17.3
  • Oilex net working interest: 1P: Gas (Bcf) - Nil; Condensate (MMbls) - Nil; 2P: Gas (Bcf) - 93; Condensate (MMbls) - 3.6; 3P: Gas (Bcf) - 170; Condensate (MMbls) - 7.8

*Gross 90 Bcf of gas and 2.9 MMbbls of condensate (Oilex net working interest of 40.5 Bcf of gas and 1.3 MMbbls of condensate) would be categorized as 1P subject to securing finance for the development, according to the PRMS guidelines. These quantities are included in the 1C Contingent Resources in Table 2.

Table 2: Unrisked Cambay Field Contingent Resource Estimates (X and Y Zones)

  • Total - Gross: 1C: Gas (Bcf) - 388; Condensate (MMbls) - 23.7; 2C: Gas (Bcf) - 720; Condensate (MMbls) - 52.8; 3C: Gas (Bcf) - 1,239; Condensate (MMbls) - 104
  • Oilex net working interest: 1C: Gas (Bcf) - 215**; Condensate (MMbls) - 12**; 2C: Gas (Bcf) - 324; Condensate (MMbls) - 23.8; 3C: Gas (Bcf) - 557.6; Condensate (MMbls) - 46.8

**Includes Oilex net working interest of 40.5 Bcf of gas and 1.3 MMbbls of condensate that would be categorized as 1P subject to securing finance for the development.

Notes to Tables

  1. The Reserves and Contingent Resources estimates prepared by RISC as of April 1, and stated in the tables above, have been prepared in accordance with the definitions and guidelines set forth in Petroleum Resources Management System, 2007 (PRMS) approved by the Society of Petroleum Engineers (SPE)
  2. The Reserves and Contingent Resources shown in the above tables have been estimated using probabilistic methods. The total in Table 2 is the statistical aggregate of the relevant volumes
  3. The estimates included in Table 2 Contingent Resources have not been adjusted for the chance of development due to one or more contingencies
  4. These estimates have not been endorsed by the Government of India or the Directorate General of Hydrocarbons, India
  5. Oilex is operator of, and has a 45 percent net working interest in, the Cambay Field Production Sharing Contract (PSC). Net working interest is not the same as the net economic entitlement under the Cambay PSC and the net economic entitlement varies with development strategy and size. For reference, Oilex’s net economic entitlement for the 2P volumes is estimated to be 94.4 percent of its net working interest
  6. Cambay Field covers 62 square miles (161 square kilometers). and environmental approvals have been granted for 60 wells and modernization and expansion of the Gas Gathering Station (GGS). 34 new wells are estimated to be required for recovery of the Reserves. The actual well count may vary
  7. Contingent Resources were previously announced Oct. 11, 2011 and there has been no revision until this announcement

The Reserves are attributed to an area of the Cambay Field having multiple vintage and modern well intersections of the X and Y Zones with hydrocarbon flows. The area encompasses recent Oilex operated drilling and production testing activity including the successful Cambay-77H well, the first successfully production tested multi-stage frac’d horizontal well in India. Gas is currently marketed on a competitive tender basis to buyers and will be sold into a low pressure local market, commencing with Cambay-73. Contractual commitments are in place from previous tendering activities and cover gas sales for up to 2 years.

As announced March 9, the approved budget for 2015/16 incorporates 2 firm wells, 2 contingent wells and up to 5 firm workovers. The firm wells target increasing production to a level that justifies selling gas into the high pressure market through a nearby gas pipeline network. One of the contingent wells in the 2015/16 budget targets upgrading X and Y Zone Contingent Resources. Additional drilling and facilities expansion will be planned for delivery in subsequent budget years subject to Joint Venture and Government of India approvals.

The Cambay Field is located approximately 6.2 miles (10 kilometers) from the gas pipeline network with spare capacity. The pipeline connection to the high pressure grid will be constructed and owned by a third party, which may be an affiliate of Oilex’s joint venture partner, Gujarat State Petroleum Corporation (GSPC). Timing of construction has yet to be determined.

The 2P Reserves are anticipated to support a plateau gas production rate of ~50 million standard cubic feet per day (MMscf/d), whilst the 2P + 2C combined volumes may support a plateau gas production rate of 125 – 250 MMscf/d. Studies, yet to be completed, will determine an optimum field gas production profile and incorporate data from wells drilled as part of the 2015/16 budget.

Managing Director of Oilex, Ron Miller, said;

“The work by RISC has resulted in first Eocene formation Reserves for Oilex in India and recognizes the success of our 2014 work program. These Reserves provide a strong foundation for the immediate development of the Cambay Field and achievement of our key corporate goals of increasing production, cash flow and reserves. Oilex’s first mover advantage in opening Cambay Basin (and India) to development of its significant tight oil and gas resources, places the Company on a strong growth trajectory in a robust energy market.”



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