Oilex Underscores 13.7MM Barrel Estimate for Indonesian Field

Oilex Ltd. reported that a Plan of Development (POD) including an updated resource assessment for the Pendalian Oil Field (Oilex 45%), located in the West Kampar Production Sharing Contract (PSC) area in Indonesia, is being submitted to the Indonesian Government for approval.

The POD is based on a Best Estimate Contingent Resource of 13.7 million barrels oil in place (mmstboip). The represents an increase of 14% on the resource announced previously which was based on a single oil reservoir.

The objective of the POD is to bring Pendalian Field into production in 2 phases comprising 2 wells in phase 1 and full field development of 3-4 wells in phase 2. The previous plan was to start production at a likely rate of about 1,200 bopd from a single well, Pendalian-3 and that first phase has now been expanded to include a second well, Pendalian-4 with a corresponding increase in the likely production rate to 1,800 - 2,000 bopd (100% basis) anticipated in Q4 2008.

As required in Indonesia, the technical studies are carried out by an independent third party appointed by the regulator (BPMigas) with input and review by personnel from the Operator, PT Sumatera Persada Energi (SPE), and BPMigas. Oilex has also been participating in this process. A significant part of the geological and reservoir performance studies as part of the approval process for Pendalian Field has been concluded.

The development plan is based on results from the Pendalian-1 well drilled in 1993 and the Pendalian-3 appraisal well which was drilled, tested and suspended as a future oil production well in November 2007. Pendalian-3, which was funded by Oilex as part of the farmin arrangement with SPE, flowed oil at potentially
commercial rates from two shallow zones in the Sihapas Sandstone. The likely commingled flow potential with artificial lift was estimated to be up to 1,200 barrels per day.

To date, significant conclusions arising from this independent evaluation are as follows:

  •  Inversion studies of the seismic data indicate that the Sihapas sands are continuous reservoirs, supporting the volumetric assumptions for the Pendalian Field.
  • The Best Estimate Contingent Resource of oil-in-place determined by the independent third party for the two Sihapas zones is 13.7 mmstboip (gross), with a High Estimate volume of 29 mmstboip (gross). These calculated volumes are similar to those determined by both SPE and Oilex.
  • A staged approach to the development, with initial production from the Pendalian-3 well followed by Pendalian-4 production well, 3D seismic and full field development was recommended, subject to approval by the Indonesian Ministry of Petroleum.

Remaining POD requirements are being finalized by the third party adviser to BPMigas prior to submission to the Indonesian authorities. The recommended development schedule, subject to regulatory approval, calls for both Pendalian-3 and Pendalian-4 to be onstream in Q4 2008.

Plans are in place for the early drilling of the Pendalian-4 well and tenders have been received for conducting both 2D and 3D seismic programs in the West Kampar block in 2008. Ongoing mapping has confirmed the exploration potential of the West Kampar PSC which will be delineated by additional seismic coverage
and investigated with the drilling of 3 exploration wells in a campaign scheduled to commence later this year.

Participants in the West Kampar Production Sharing Contract are:

Joint Venture Party Participating Interest

  • Oilex (West Kampar) Limited 45%
  • PT Sumatera Persada Energi 55% (Operator)