Oilex (ASX:OEX, LON:OEX) has confirmation that gas recovered from the Cambay 77-H test well is “very comparable” to the composition of gas produced from the Cambay 73 well in India.
Consequently, it is now seeking consent to sell gas from the well into the local ‘off spec’ gas market.
Ron Miller, managing director, sees this as a welcome revenue stream adding to the oil recovered from Cambay 77-H which is also being sold.
"We remain very positive about Cambay-77H and look forward to getting through the water recovery and into the production testing phase of our proof of concept well,” Miller said.
“Having similar gas composition as Cambay-73 provides a great opportunity to increase near term production into a market where gas is in very short supply.”
It also told investors that it has now successfully completed a chemical intervention in the Cambay 77-H well, to remedy a partial blockage, and flow-back from the horizontal well has significantly improved.
About 75% of the original fracking water has now been recovered from the well.
Cambay-77H, a pivotal test well, is designed to demonstrate the commerciality of the Cambay field.
As the company prepares to conduct testing the well continues to flow-back gas, oil and fracking water.
The portion of water flow back must be less than 10% before tests begin – Oilex says it currently varies between 60% to 90%, though it stressed this is fracking water and no formation was has been recovered to date.
To improve the efficiency of water recovery the company said that nitrogen gas lifting is now being implemented.
At the same time Oilex is taking to steps to reduce operating costs, by installing a standard production tree rather than the frack tree and by demobilising some equipment and staff that are no longer needed given the company’s current understanding of the well’s performance.
