silverfox6663
10 years ago
Cambay Basin demonstrates strong economics
Cambay demonstrates robust economics, despite the recent sharp drop in oil prices
Initial modelling indicates gas only well is economic, oil production provides significant upside value
India domestic gas demand to continue to outstrip supply
Buyer bid system for gas offtake results in higher prices
Low commercialisation costs with existing infrastructure in place
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to confirm that the Cambay Field is expected to have robust economics, despite the recent sharp drop in oil prices.
Initial production profiles modelled by the Company for the next three horizontal wells using the Cambay-77H data provide the following indicative value metrics per well:
Well configuration
Product slate
10 Yr Assumed recovery (BOE)
Payback (Mths)
NPV10/BOE
700m lateral with 9 fracs
Gas
531,000
~48
$1
700m lateral with 9 fracs
Gas + Oil
680,000
~22
$15
1,400m lateral with 18 fracs
Gas + Oil
>1,000,000
~12
>$20
The above modelling assumes a US$70 / Bbl oil and US$8 / MSCF gas price. The NPV calculation assumes utilisation of existing tax losses. Full field economics will be assessed after completion of the engineering studies, including determining the appropriate throughput rate for gas processing facilities. A well with 700m lateral and 9 fracs compares favourably with Oilex’s previous commercial assessment for Cambay.
The “700m gas only” well shows the economic impact of no revenue from concurrent oil production. Initial modelling indicates that, even a gas well with no associated liquids is economic. A further positive from analysis of the Cambay-77H data is the significantly higher oil gas ratio (OGR), which has a material positive impact on the revenue stream from future Cambay horizontal wells.
The well economics are underpinned by the significant excess of demand over supply within the Indian domestic economy, which is forecast to grow. According to the US Energy Information Agency:
India is a significant importer of crude oil, as the country’s demand growth continues to outstrip domestic supply growth; and
Natural gas serves as a substitute for coal in electricity generation and fertiliser production in India. The country began importing liquefied natural gas in 2004 and increasingly relies on imports to meet domestic natural gas needs
India gas demand outstrips supply
20141212_India-gas-demand-outstrips-supply
Extracted from the report titled “Meeting Demand Challenges of an Emerging LNG Market: INDIA”, which was authored by Dr A K Balyan MD & CEO Petronet LNG Limited, India
Oilex has concluded 2 gas sale agreements (GSA) to date. Gas sale contracts are conducted via a bid system, with buyers submitting offers to purchase via a tender process. Given the demand for gas by nearby industrial users, strong pricing is secured, above the floor price recently established by the Indian Government.
Existing industry located within 15km of the Cambay Field means very low capital cost is associated with sales of gas to the local market and the tie-in to existing gas transmission pipeline network. The network has excess capacity for additional gas that can be used for gas from the Cambay Field.
Managing Director of Oilex, Ron Miller, said;
“The robust indicative economics of the Cambay Field remain, despite the sharp decline in oil prices. The fall in the oil price does impact the total revenue generated by the Cambay Field, but this is more than offset by the 250% increase in the oil gas ratio. The premium gas market in India also means that the Cambay Field is economic even when we exclude oil revenues from our modelling. ”
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silverfox6663
10 years ago
oilex capital raising
Oilex (ASX:OEX, LON:OEX) was granted a trading halt yesterday by the ASX pending details of a proposed capital raising, with its shares placed in pre-open.
Last week, the firm said it had started the production test shut-in period at its Cambay-77H well in India.
Upon completion, the instrumentation deployed downhole will be recovered and the data downloaded for analysis.
The test is focused on acquiring long term performance data essential for assessment of reservoir properties and will supplement surface data collected during flow-back.
The halt will remain in place until the opening of trade on Wednesday 26th November 2014, or earlier if an announcement is made to the market.
silverfox6663
10 years ago
Cambay-77H - Production Test shut-in period has commenced
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce the commencement of the Cambay-77H production test shut-in period on 17 November 2014. Upon completion, the instrumentation deployed downhole will be recovered and the data downloaded for analysis.
P1000661_webThe test is focused on acquiring long term performance data which is essential for assessment of reservoir properties and will supplement surface data collected during flowback. A 5 day shut-in period preceded the test to allow the well to stabilise after ~ 85 days of flowback production.
The formal test has two (2) distinct sections:
? 300 hour (12.5 days) flow period, where the well has flowed on a constant choke size after achieving stable flow soon after opening (now completed).
• 300 hour shut-in period, where data will continue to be recorded and monitored. This period may be extended depending upon the well response.
Oilex intends to announce the successful recovery of the instrumentation and data followed by an announcement regarding the flowback and test results after a preliminary analysis of the data has been completed.
Managing Director of Oilex, Ron Miller, said;
“Cambay-77H is the first horizontal well with multi-stage fracture treatments to successfully be production tested in India. The production test flow period is now complete and the shut-in period has commenced.”
silverfox6663
10 years ago
Cambay-77H – Delivering the proof of concept objectives
• Efficient drilling operations demonstrating the repeatability of targeting the Y zone
• Y zone reservoir properties are laterally consistent, having variability within expectations
• Successful completion of 8 fracture treatments
• Successfully demonstrated “Plug and Perf” completion technique in India
• First horizontal well in the Cambay Basin with multiple fracture treatments to achieve flowback
• Flowback data used to calibrate horizontal well model for the first time
• Future well designs may have wider frac spacing, leading to significant cost savings
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce significant progress in achieving the proof of concept objectives for Cambay-77H. These objectives are critical to demonstrating the Cambay Field can be commercially developed using multi-stage fracture treatments (fracs) in horizontal wells. Cambay-77H has a very short lateral section of 350m with 8 fracs that were successfully completed in 4 stages.
The key objectives achieved include:
• Efficient drilling operations that demonstrated repeatability by successfully intersecting the Y zone at the predicted depth, while steering around other existing wells
• Well logs confirm the Y zone is hydrocarbon bearing
• Provides confidence that the Y zone reservoir properties are laterally consistent, and any variability is within expectation
• Successfully perforated, isolated and treated 8 fractures in 4 stages
• All fracs interpreted to extend ~ 60m into the reservoir from the well bore which is interpreted to be sufficient for commercial production in longer laterals
• “Plug and Perf” completion method is achievable and repeatable in India
• Flowback activities, including recovery of Operations water from this type of well can be successfully executed in the Cambay Field
Other key outcomes that influence the future commercialisation of Cambay Field are:
• The hydrocarbon liquid to gas ratio (LGR) during flowback has been ~100 bbls of liquids per MMscfd of gas. This ratio is 250% higher than expected which if sustained, leads to a much higher unit revenue stream in barrels of oil equivalent (Boe).
• Oil and gas recovery started on the first day of flowback and gas sales during flowback operations in future wells is possible as the gas market is readily available. This leads to early cash flow and faster payback of well costs.
• Well modelling calibrated to flowback production over ~ 85 days indicates that frac spacing in future wells with longer laterals can be increased. Fewer fracs per unit length can lead to significant cost savings.
• Cambay-77H sustained production rate of 0.5 - 1.0MMscfd has been predicted using the well model calibrated to flowback production and is up to 185% greater than Cambay-73, which has a single frac in a vertical well. Cambay-73 was flowing 0.35MMscfd when shut in during June 2012 and will be returned to production subsequent to the installation and commissioning of facilities.
• The recovery of Operations water is >79% and therefore at the high end of expectation and North American experience. No formation water has been recovered to date which continues to confirm the thesis that no direct oil water contact (OWC) is accessible within the Y zone.
• As Cambay-77H is on “self-flow” with no artificial lift, a significant proportion of reservoir energy within the drainage area of the well has been used to recover large volumes of Operations water. This means less reservoir energy is available to produce oil and gas during the flowback period.
• Future wells with longer laterals and wider fracture spacing will have larger drainage areas and access more reservoir energy. Proportionately less energy should be needed to recover Operations water, resulting in higher gas and oil production rates.
Managing Director of Oilex, Ron Miller, said;
“Oilex’s first mover strategy compares favourably to other successful companies that have been early entrants into newly identified tight/unconventional gas and oil plays. Delivering Cambay-77H with its proof of concept objectives is now almost complete. Upon completion of these objectives, Oilex will continue to focus on commercialising the Cambay Field and generating sustainable cash flow and profits for shareholders.”
To view the entire announcement, please click on the link below:
silverfox6663
10 years ago
Appointment of Chief Financial Officer and Company Secretary
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce the appointment of Mr Chris Bath
as Chief Financial Officer (CFO) and Company Secretary, with effect from 24 October 2014.
Consistent with Company policy, Mr Bath will not be joining the Board of Directors at this time.
Mr Bath is a Chartered Accountant with significant experience in the energy and resource
sectors in both Australia and Asia. Most recently he was CFO and Company Secretary for
Buru Energy Limited, an ASX S&P/ASX 200 listed oil and gas company. Prior to Buru, Mr
Bath was Deputy CFO Asia Pacific for a Fortune 500 global commodity business, based in
Singapore.
Mr Bath has been involved in the energy and resource sectors operating across Asia and with
listed entities in Australia, Indonesia, Singapore and the United Kingdom. He brings
experience of debt and equity markets, mergers and acquisitions, joint venture management
and operations.
Mr Bath replaces Mr Robert Ierace.
Managing Director of Oilex, Ron Miller, said;
“We are delighted to announce Chris’s appointment. The Board welcomes him to the senior
management team and we look forward to his contribution to the business as we progress the
development of our Indian and Canning Basin assets and review additional opportunities for
growth. I would also like to thank Rob for his contribution and wish him all the best in the
future.”
For and on behalf of Oilex Ltd
silverfox6663
10 years ago
Oilex (LON:OEX) told investors that 76% of the fracking water has now been recovered from the Cambay 77-H well, and the clean-up phase is continuing.
In the most recent measure, taken in the early hours of Monday October 6, the well was flowing at a daily rate of 229 barrels of water and oil, and 410,000 cubic feet of gas.
“Oilex is pleased with the well's performance at a relatively small choke,” said managing director Ron Miller.
“Flow back is all about removing the water put into the reservoir during frack and coil tubing operations, as this impairs the hydrocarbon production rates. We look forward to the improved water recovery leading to better oil and gas production."
The company also told investors of a set-back in operations to replace the ‘frack tree’ installed at surface with a standard production tree. The problems led to a piece of equipment becoming stuck in the well, though recovery operations were completed over about 13 days.
Replacing the tree was intended to boost flow back from the well and subsequent to the operations Oilex said the well has exhibited a significantly improved performance.
Oilex said efforts are underway to optimise operational parameters to enhance the recovery of water, including the cessation of nitrogen lift activities, which will help bring forward the production testing phase – which comes once clean-up is complete.
In the meantime the company continues to sell the oil that’s produced during the clean-up, and it is working so that it can sell the gas too.
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Renee
2 years ago
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