22 Nov 2010 07:00
22nd November 2010
APACHE Farms into offshore Western Australia Permit WA-388-P
Summary
* Apache Northwest Pty Ltd ("Apache") has farmed into WA-388-P permit * WA-388-P permit, located on the North West Shelf, contains seven prospects ranging in potential size from 0.3 to 2.8 TCF of prospective gas resource * Apache to fund 100% of the first exploration well and test costs * Rig contracted with first well expected to spud early 2011 * Oilex retains an 8.4% interest in the permit
Oilex Ltd is pleased to announce that the WA-388-P Joint Venture has entered into a farm in agreement with Apache Northwest Pty Ltd ("Apache"). The WA-388-P permit is located north of the Pluto, Wheatstone, Gorgon & North West Shelf fields, offshore Western Australia.
The WA-388-P permit contains a portfolio of play types and seven prospects have been identified ranging in potential size from 0.3 to 2.8 trillion cubic feet (TCF) of prospective gas resource (recoverable best estimate, 100% basis). Seismic amplitude anomalies evident in the 3D seismic data are likely Direct Hydrocarbon Indicators, suggesting the presence of gas by analogy with nearby fields and discoveries.
Apache will obtain a 40% interest in the WA-388-P permit by paying:
* 100% of the first exploration well (up to an agreed cap); and * 100% of the well test costs (up to an agreed cap) if the Joint Venture approves testing the well.
Apache will replace Oilex as the permit operator. Apache has contracted the Stena Clyde drilling rig to drill the first exploration well. The well will target a prospect in the Intra Mungaroo channel zone and is expected to spud in early 2011.
The participating interests in the WA-388-P permit before and after finalising the farm in are set out below.
Joint Venture Party Pre farm in Post farm in Oilex Ltd 14% 8.4% Apache Northwest Pty Ltd - 40% Sasol Petroleum Australia Ltd 30% 18% Videocon Industries Ltd 14% 8.4% Gujarat State Petroleum Corporation 14% 8.4% Ltd (GSPC) Bharat PetroResources Limited 14% 8.4% Hindustan Petroleum Corp. Ltd 14% 8.4%
The farm in agreement is conditional on obtaining Government approvals and GSPC Board approval.
Commentary
Oilex's Managing Director, Dr Bruce McCarthy said, "The Company is pleased to have Apache farm into the WA-388-P permit given its extensive experience in the Intra Mungaroo channel play in its operated acreage immediately south of WA-338-P through its recent Julimar and Brunello discoveries. In addition to funding a well, Apache also has provided the Joint Venture with a unique opportunity to access a rig to undertake early drilling.
This farm in agreement will allow Oilex to retain exposure to the WA-388-P permit's high impact exploration potential, while also preserving cash for our work programme in India and the development of our core asset, the Cambay Low Permeability Eocene reservoirs in Gujarat."
Further information on Oilex can be found on the Company's website www.oilex.com.au including a background paper titled "Potential of the Cambay Field Low Permeability Reservoirs".
For further information, please contact:
Oilex Ltd +61 (0)8 9485 3200 (Western Australia) Bruce McCarthy Managing Director
oilex@oilex.com.au Ben Clube, Finance Director bclube@oilex.com.au Read Corporate +61 (0)8 9388 1474 (Western Australia) Nicholas Read
nicholas@readcorporate.com.au Conduit PR +44 (0)20 7429 6610 (UK) Paul Youens paul@conduitpr.com +44 (0)7843 260 623 (UK) Jonathan Charles jonathan@conduitpr.com +44 (0)7791 892 509 (UK) RFC Corporate Finance Ltd +61 (0)8 9480 2506 (Western Australia) Stuart Laing stuartl@rfc.com.au
About Oilex
Oilex Ltd is an AIM and ASX-listed oil & gas exploration and production company based in Perth, Australia.
The Company's main area of focus is in India where it operates three onshore production sharing contracts in Gujarat on behalf of Joint Ventures with Gujarat State Petroleum Corporation Ltd (GSPC). Of these, the Cambay Field contract area has considerable oil and gas resources and Oilex intends to further evaluate and exploit these through proven North American "shale gas" technology, including horizontal drilling and fracture stimulation. Oilex's, Managing Director, Bruce McCarthy (ex-Cairn Energy) is currently based in Gujarat to manage this project and the Company's other Indian interests.
Information in this report relating to hydrocarbon reserves or resources has been compiled by Mr Ray Barnes B.Sc. (Hons), the Technical Director of Oilex Ltd who has over 37 years experience in petroleum geology and is a member of the AAPG. Mr Barnes consents to the inclusion of the information in this report relating to hydrocarbon reserves and resources in the form and context in which it appears. Resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resources Management System, 2007.
vendor