News: Oilex to drill up to four new Cambay wells in 2015

Oilex (ASX:OEX, LON:OEX) plans to drill as many as four new wells at the Cambay field in India.

The new program follows the successful production testing of the Cambay-77H proof of concept well, and comes as the company seeks to bring the field into commercial production.

Initially, there will be two firm wells planned with two further contingent wells.

Tendering to contractors for the drill program is underway, and Oilex anticipates the program will be lower cost, as it expects to take advantage of the drop off in activity in the broader oil and gas sector.

In the meantime, work is currently about 50% complete to bring the previously drilled Cambay-73 well online and a program to work-over a total of five other existing wells is also planned.

It is scheduled that these work-overs will be carried out prior to the start of the new wells.

Separately, Oilex is also working on the Bhandut field where design engineering work for gas processing facilities is currently 40% complete.

The 2015/16 program has already been approved by the Indian authorities.

"Oilex is very pleased with the strong support of the Government of India and rapid approval of the 2015/16 work program for the Cambay Field after the successful proof of concept activities at Cambay-77H,” said managing director Ron Miller.

“We are moving forward with the planning and preparation for the work-over and drilling campaigns both of which target increasing production, cash flow and reserves from our India assets.”

Miller added that Oilex’s plans for Cambay benefit from a strong growth outlook for the Indian economy, where there is also a significant shortage of gas and substantial gas demand.

This creates a robust environment for future gas prices and helps shield Oilex from the impact of lower oil prices, he added.