21 Jan 2011 07:00
21 January 2011
Revised Oil Sales Agreement for Cambay Field, India
Summary
* Increase of approximately 34% to price received for Cambay Field oil sales and fixes future price to an international benchmark * New price structure will apply to future oil and condensate production from Cambay "tight" Eocene Reservoirs including any production from the Cambay 76H well planned for Q1 2011 * Payment of approximately US$0.7 million to be received for the differential crude price on past production
Oilex Ltd advises that, on behalf of the Cambay Field Joint Venture (JV), it has agreed with Indian Oil Corporation (IOC) to revise the existing Cambay Field Crude Offtake Sales Agreement. The revised agreement includes a new price structure whereby the price paid by IOC to the JV for Cambay crude oil and condensate will be based on new international benchmark crude of similar assay quality. The new price structure will be applied retrospectively so that the Cambay Joint Venture will receive an adjustment payment for a portion of the field's past production.
In future, Oilex will sell any future condensate and crude production from the Cambay Eocene "tight" reservoirs under the favourably revised agreement, including any liquids produced from the initial "proof of concept" well Cambay-76H planned for the first Quarter 2011. The agreement is subject to final signature of ONGC which facilitates transportation of the crude on behalf of IOC.
The participating interests in the Cambay PSC are:
Joint Venture Party Participating Interest Oilex Ltd (Operator) 30% Oilex NL Holdings (India) Limited 15% Gujarat State Petroleum Corporation Ltd (GSPC) 55%
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 oilex@oilex.com.au
Ambrian Partners Limited (Nominated Adviser and AIM Broker) +44 (0)20 7634 4856 (UK)
Richard Swindells richard.swindells@ambrian.com
Read Corporate +61 (0)8 9388 1474 (Western Australia)
Nicholas Read nicholas@readcorporate.com.au
Tavistock Communications +44 (0)20 7920 3150 (UK)Paul Youens pyouens@tavistock.co.uk +44 (0)7843 260 623 (UK)Jonathan Charles jcharles@tavistock.co.uk +44 (0)7791 892 509 (UK)
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 tight gas and "shale gas" technology, including horizontal drilling and fracture stimulation. The first horizontal, fracture stimulated well is planned for drilling in Q1 2011. Oilex's, Managing Director, Bruce McCarthy is currently based in Gujarat to manage this project and the Company's other Indian interests.
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