Oilex Consortium Signs Deal for Block 56 in Oman

Oilex NL

Oilex reports that the Government of the Sultanate of Oman has signed the Exploration and Production Sharing Agreement for Block 56 with the consortium led by Oilex (as operator), on June 28th in Muscat in the presence of His Excellency Dr. Mohammed bin Hamed Al-Rumhy, Minister of Oil & Gas, Sultanate of Oman, other Government dignitaries and Senior officials of the Ministry of Oil & Gas.

Block 56 was the consortium's first choice block and the highest rated of the blocks on offer in the bid round that closed on January 1, 2006. The block is located onshore, adjacent to producing fields operated by PDO, the Oman national oil company, in the South Oman Salt Basin, which is one of the main producing basins in Oman.

The recognition of 20 structural leads and the possible presence of a thicker sedimentary section in the eastern area implying a more extensive distribution of the Ara Salt play across Block 56 raises the possibility of salt related structures similar to those producing to the west in the main salt basin and justified a comprehensive work program that has been agreed under the EPSA.

The work program will commence with reprocessing of existing seismic data in July. Acquisition of 2D and 3D seismic is planned to commence in last quarter of 2006 depending on availability of seismic contractors. The value of the work program is estimated to be about US$7.5 million net to Oilex over the initial 3 year term. Drilling is expected to start towards the end of first half 2007.

The award completes another element of the company's stated strategy of acquiring high quality exploration acreage in countries around the Indian Ocean rim in joint venture with its Indian joint venture partners. The consortium comprises Oilex (25% and Operator) and GAIL India Ltd (25%), Videocon Industries Ltd (25%), Hindustan Petroleum Corporation Ltd (12.5%) and Bharat Petroleum Corporation Ltd (12.5%) from India.