11 Oct 2011 07:00
11 October 2011
INITIAL INDEPENDENT CAMBAY HYDROCARBON ASSESSMENT
Oilex Ltd advises that Netherland Sewell and Associates Inc. ("NSAI") have completed an independent hydrocarbon in-place evaluation and recoverable resources assessment of six potential Eocene reservoirs (X, Y, Z, 180-200, 200-300, 300-400 Zones) in the Cambay Production Sharing Contract ("PSC"). The assessment by NSAI covers three zones on which Oilex had earlier reported (X, Y and Z) and three additional zones that they have defined (180-200, 200-300, 300-400).
Summary
- The two shallower Zones (X and Y) have combined Best Estimate (100% basis)
- Discovered gross in-place volumes of 1,314.1 billion cubic feet of gas ("BCF") and 1,633.1 million barrels of oil ("MMbo")
- Unrisked gross recoverable volumes of 494.7 BCF of gas and 83.3 MMbo.
- The four deeper Zones (Z, 180-200, 200-300, 300-400) have combined Best Estimate (100% basis)
- Undiscovered gross in-place volumes of 12,644 BCF (12.6 trillion cubic feet) of gas and 11,592.3 MMbo.
- Unrisked gross recoverable volumes of 934.8 BCF of gas and 140.4 MMbo
- It is anticipated that this assessment will be updated when additional material production information becomes available from the Cambay 76H production test.
- NSAI's assessment has concluded that the potential exists for recovery of both crude oil and associated gas as well as primary gas and associated condensate from each of the reservoirs analysed. NSAI has used a ratio of crude oil to primary gas recovered from each reservoir of 60-65% to 40-35% and identified this ratio as a key uncertainty.
The in-place and unrisked recoverable hydrocarbon volumes estimated by NSAI for the six defined zones are as shown in the tables below. There are certain risks associated with the recovery of these volumes and the volumes are subject to change as new information becomes available.
The next stage of this assessment will be undertaken by NSAI once sufficient production data are available from the Cambay-76H well and appropriate classifications will be made accordingly.
These estimates have not been endorsed by the Government of India or the Directorate General of Hydrocarbons, India.
This is the announcement that was referred to in the Company's request for an ASX trading halt on 7th October 2011.
Hydrocarbons In-place
Discovered In-Place Volume Estimate Low Best High Oil Gas Oil Gas Oil Gas Zone MMbo BCF MMbo BCF MMbo BCFX 309.0 311.3 667.2 653.6 1.169.7 1,110.7 Y 522.4 360.6 965.8 660.5 1,718.1 1,186.2Total - Gross 831.4 672.0 1,633.1 1,314.1 2,887.8 2,296.9Total - Net to Oilex 374.1 302.4 734.9 591.3 1,299.5 1,033.6 Undiscovered In-Place Volume Estimate Low Best High Zone Oil Gas Oil Gas Oil Gas MMbo BCF MMbo BCF MMbo BCFZ 1,234.1 1,225.0 2,692.6 2,705.0 4,811.7 4,610.5 180-200 1,122.3 1,124.3 2,424.2 2,406.3 4,252.7 4,037.2 200-300 1,353.2 1,438.9 3,791.3 4,194.8 7,547.0 8,105.2 300-400 969.1 1,173.2 2,684.2 3,338.5 5,301.1 6,425.2 Total - Gross 4,678.7 4,961.5 11,592.3 12,644.5 21,912.4 23,178.2 Total - Net to Oilex 2,105.4 2,232.6 5,216.5 5,690.0 9,860.5 10,430.1
Unrisked Recoverable Hydrocarbons
Unrisked Contingent Resource Estimates Low Best High Zone Oil Gas Oil Gas Oil Gas MMbo BCF MMbo BCF MMbo BCFX 6.4 42.8 21.6 141.5 49.2 315.5 Y 24.8 136.7 61.6 353.2 130.0 757.5 Total - Gross 31.2 179.5 83.3 494.7 179.1 1,072.9 Total - Net to Oilex 14.0 80.7 37.4 222.6 80.5 482.8 Unrisked Prospective Resource Estimates Low Best HighZone Oil Gas Oil Gas Oil Gas MMbo BCF MMbo BCF MMbo BCFZ 12.2 85.5 45.5 293.4 170.8 1,096.1180-200 11.2 78.2 40.3 261.5 156.0 990.4200-300 7.3 52.6 31.8 217.0 131.5 886.2300-400 5.4 42.0 22.7 162.9 95.1 659.7Total - Gross 36.1 258.4 140.4 934.8 553.3 3,632.4Total - Net to Oilex 16.2 116.2 63.1 420.6 248.9 1,634.5Notes to Tables
(1)The in-place and resource volume estimates prepared by Netherland, Sewell & Associates, Inc and stated in the tables above have been prepared in accordance with the definitions and guidelines set forth in Petroleum Resources Management System, 2007 approved by the Society of Petroleum Engineers (SPE).
(2)The contingent resources shown in the tables above have been estimated using probabilistic methods. The prospective resources shown in the tables above have also been estimated using probabilistic methods and are dependent on a petroleum discovery being made.
(3)Oil volumes shown comprise crude oil and condensate.
(4)Gas volumes shown comprise free gas and associated gas.
(5)The estimates included in the table for Prospective Resources have not been adjusted for both an associated chance of discovery and a chance of development (see definitions).
(6)The estimates included in the table for Contingent Resources have not been adjusted for the chance of development due to one or more contingencies (see definitions).
(7)The gross (100% working interest) and net to Oilex (45% working interest) estimates include Government share of production applicable under the Production Sharing Contract
(8)Oilex has a 45% net working interest in the Cambay Field Production Sharing Contract.
Assessment
As previously advised (8 June, 2011), the next stage of this assessment will be undertaken by NSAI once sufficient material production test data are available over the next few months from the recently drilled, completed and fracture stimulated well Cambay-76H. At this stage hydrocarbons in the shallower zones assessed (X and Y) have been classified by NSAI as Contingent Resources.
The in-place volumes for the X and Y Zones were determined using data from the well intersections (41 and 39 respectively) of these zones in the Cambay PSC and included consideration of well test data from conventional vintage and recent wells. Based on the hydrocarbon fluid phases recovered from these well tests, NSAI have apportioned the in-place hydrocarbons and derived volume estimates for both oil and gas. Similar apportionment ratios were applied to the deeper Zones.
The 4 deeper Zones; Z, 180-200, 200-300 and 300-400; have been classified as Prospective Resources. The Z Zone has 29 full or partial well penetrations with log responses that may indicate the presence of hydrocarbons but testing of this Zone has not been undertaken in the past. Consequently moveable hydrocarbons have yet to be recovered in commercial quantities from this Zone.
The 180-200 Zone has 14 full or partial well penetrations with log responses that indicate hydrocarbons are present and moveable hydrocarbons have been produced by conventional drill stem and production test from a thin interbedded sand section in the near-vertical Cambay 19z well. The well still produces hydrocarbons from this zone. Moveable hydrocarbons have yet to be demonstrated from the wider area of the 180-200 Zone.
The limited nature of the data available in the deeper Zones, including as noted above, makes direct comparison with established North American unconventional and tight gas producing basins difficult.
Consent
The statements in this release relating to hydrocarbon-in-place, contingent resources and prospective resources estimates are based on an assessment conducted by Netherland, Sewell & Associates, Inc (NSAI), a global consultant specializing in the assessment and valuation of hydrocarbon resources. These estimates are included in the transmittal dated October 10, 2011 compiled by Mr John G. Hattner, a full time-employee of NSAI. Mr Hattner is a qualified Petroleum Geologist and Geophysicist, who has been involved in the oil industry for 25 years, and has reviewed and approved the technical information contained in this announcement. Mr John G. Hattner has consented to the inclusion in this announcement of the technical information in the form and context in which it appears herein.
Comment
Bruce McCarthy, Oilex's Managing Director said, "NSAI's initial assessment is very encouraging and we are very pleased with the result. It supports Oilex's view that the Cambay Eocene tight reservoirs contain significant quantities of oil and gas. In the context of the strong Indian market for energy, particularly in Gujarat, NSAI's assessment of the resources at Cambay reinforces our focus to deliver the full potential value of this asset.
NSAI is a worldwide leader of petroleum property evaluation with particular expertise, widely acknowledged by the industry in the analysis of tight and unconventional reservoirs. NSAI has provided Oilex with valuable advice on additional data requirements to address the geological and commercial risks identified in the deeper zones where there are limited well penetrations. Those recommendations will be incorporated into our near term future work proposals.
The Cambay-76H well, which is currently being prepared for production testing, is anticipated to provide valuable data on (2) the reservoir productivity and (2) whether the application of fracture stimulation technologies widely practised in North America has been successfully implemented and is both technically feasible and commercially viable in the Cambay project."
The participating interests in the Cambay PSC are:
Joint Venture Party Participating InterestOilex Ltd (Operator) 30%Oilex NL Holdings (India) Limited 15%Gujarat State Petroleum Corporation Ltd 55%
For further information, please contact:
Oilex Ltd (Western +61 (0)8 9485 3200 Australia)Bruce McCarthy Managing Directoroilex@oilex.com.auBen Clube Finance Directoroilex@oilex.com.au Ambrian Partners Limited (Nominated Adviser and AIM Broker)Matthew Einhorn +44 (0) 20 7634 4860 (UK)matt.einhorn@ambrian.com Anthony Rowland +44 (0) 20 7634 4858 (UK)anthony.rowland@ambrian.com Read CorporateNicholas Read (Westernnicholas@readcorporate.com.au +61 (0)8 9388 1474 Australia) Tavistock Communications +44 (0)207 920 3150 (UK)Ed Portman eportman@tavistock.co.uk +44 (0)7733 363 501 (UK)Paul Youens pyouens@tavistock.co.uk +44 (0)7843 260 623 (UK)Forward Looking Statements
This document may include forward-looking statements. Forward-looking statements include, but are not necessarily limited to, statements concerning Oilex Ltd's planned operations program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate" "expect", "intend", "may", "potential", "should" and similar expressions are forward-looking statements. Although Oilex Ltd believes that its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements."
LIST OF ABBREVIATIONS AND DEFINITIONS USED HEREIN
MMBO Million standard barrels of oil or condensateBBO Billion standard barrels of oil or condensateBCF Billion Cubic Feet at standard temperature and pressure conditionsDiscovered In Is that quantity of petroleum that is estimated, as of a givenplace volume date, to be contained in known accumulations prior to productionUndiscovered in Is that quantity of petroleum estimated, as of a given date, toplace volume be contained within accumulations yet to be discoveredProspective Those quantities of petroleum which are estimated, as of a givenResources date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development.Contingent Those quantities of petroleum estimated, as of a given date, toResources be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality.Reserves Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria: they must be discovered, recoverable, commercial, and remaining (as of the evaluation date) based on the development project(s) applied.
Figure 1. Seismic section showing NSAI subdivision of the geological section (please see www.oilex.com.au for full report)
XLON