Oilex Names Sarha-1 in Oman as Future Production Well

Oilex reported that testing operations on Sarha-1 have been completed with the proposed DST #3 of the Lower Gharif Formation being aborted due to inability to isolate the test interval behind casing from water bearing sands.

Attempts to squeeze cement into the annulus were unsuccessful, confirming the concerns that difficult well bore conditions might preclude a reliable test. Good oil shows were encountered while drilling the Lower Gharif and it is most likely that the source of the water is from other sandstones that are clearly water bearing. The Gharif Formation will be evaluated again in the next well where we expect that the problems encountered in Sarha-1 will be mitigated by different well design.

Oilex has recommended to the Joint Venture to undertake the necessary operations to suspend the well so that it may be used as a future oil production well from the Al Khlata formation which produced oil from DST #2. Current operations are suspending the well for later production of the Al Khlata Formation oil sands after which the rig will be moved to drill Ghadaq-1.

Results of Sarha-1, the first of 11 wells that will be drilled on Block 56, have been very encouraging confirming the presence of moveable oil in at least one of the main objective horizons, the Al Khlata Formation, with strong indications of oil saturations that were not able to be tested adequately in the Huqf, Haima and the Gharif Formations. The information gained from Sarha-1 has indicated the need for a different well design that will facilitate testing of all of the potential reservoir units, particularly the deeper Huqf and Haima Formations, in future wells.