Oilex moving forward, page-34

Just thinking that 77H is still primarily a 'concept well' with only a ~350m horizontal. If we're lucky and it also turns out to be a stand alone commercial operation in its own right, all the better.

However, we shouldn't lose sight that 77H may well turn out to be only marginally commercial, or even uncommercial, using such a short lateral on OEXs unperfected initial hole in the Cambay shale, the first one from which OEX has been able to gather crucial data.

Just saying that we shouldn't be hugely disappointed/over reactive if we get such a result.

In my mind what's paramount with 77H and Cambay are the learnings - to determine exactly what resource, or mix, is down the hole i.e. lab test results; the reserve size; the flow rates pertaining to the number of fraccs and technique used; exact data on porosity & permeability; the temperatures, pressures & management systems i.e. resource, muds, spacing & number of valves, milling out plugs, finishing, flow-back etc

Armed with this information OEX can go about designing the subsequent 4 wells for optimal commerciality, including the number and length of laterals etc using the same pad. I've just been reading about a new 'octopus' layout developed in the US.

IF this is the case then the next announcement could say something along the lines of ..... " after X days flowing 77H has Y flow rates and lab tests show ABC composition and OEX has determined a resource reserve of Y gas and Z oil. However, with flows from only 350m horizontal 77H is marginally uncommercial, however will provide valuable off-take sales of $. With the size of the reserves and quality of resource OEX has redesigned the next 4 wells to be rolled out commencing October which will be funded ......... The wells will use 1,200?m laterals with 15? fraccs blah de blah ....... , which will deliver commercial volumes X at Y pressure and flow rates."

And yes, such an outcome if it eventuated, would temper expectations for an immediate multi-bagger, but Cambay would still be a commercially viable operation for the next 4 wells - just not 77H.

Just one of the possible outcomes - just noodling.