5 December 2014
Bhandut-3 - Gas Sales Agreement Endorsed
Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce it has received endorsement from the Government of India for the sale of gas from the Bhandut-3 well, which is located within the Bhandut Field. This is a critical milestone for returning the field to production, supplying gas to the local market and generating positive cash flow for the Company from a previously idle asset.
Now that endorsement of the gas sales agreement has been received, the Bhandut Joint Venture will proceed to establish the appropriate production facilities for Bhandut-3. This will include a compressed natural gas (CNG) loading facility that will enable CNG "bullet" trucks to be loaded at site for transportation of the gas to end users. Bhandut-3 gas is "lean" and therefore no material condensate production is expected.
As announced on 20 August 2013, Bhandut-3 flowed at a maximum rate of 6.5MMscfd through a 10mm choke with a flowing tubing head pressure of 1,190 psia during an isochronal test. The test confirmed the reservoir sand has a permeability of 124mD, making it a conventional reservoir. It is planned to deliver approximately 0.5-1MMscfd from the Bhandut-3 well. The Company anticipates the cost of the production facilities payback in 7 months from commencement of production based upon the contracted gas price.
Managing Director of Oilex, Ron Miller, said;
"We are very pleased to receive the endorsement from the Government of India to sell gas from Bhandut-3 and restart production from the field to provide gas to the local market. The contracted price was determined by a competitive bidding process and remains Commercial-in-Confidence. Oilex continues towards generating additional cash flow through increasing production from its assets in India."
For and on behalf of Oilex Ltd
Ron Miller
Managing Director
For further information, please contact:
Oilex Ltd Ron Miller, Managing Director Email: [email protected] Tel: +61 8 9485 3200 Australia |
Strand Hanson Limited Nominated Adviser and AIM Broker Rory Murphy/Ritchie Balmer Email: [email protected] Tel: +44 20 7409 3494 UK |
Tavistock Communications Ed Portman Email: [email protected] Tel: +44 20 7920 3150 UK |
