RNS Number : 7667EOilex Ltd14 April 201414 April 2014CAMBAY-77H...

RNS Number : 7667E

Oilex Ltd

14 April 2014

14 April 2014

CAMBAY-77H WELL - Reaches TD (Total Depth)

-- Cambay-77H reaches TD at 2370m MD on 14 April 2014
-- Increased gas readings confirm hydrocarbon-bearing reservoir section
-- Y Zone reservoir target first intersected on 13(th) April 2014
Oilex Ltd (ASX: OEX, AIM: OEX,) is pleased to announce that Cambay-77H has reached TD at 2370m MD. The primary reservoir target (Y Zone) has been intersected on prognosis and increased gas readings similar to Cambay-76H indicate the reservoir is hydrocarbon bearing. A full suite of logs will be acquired subsequent to conditioning the wellbore, after which, the 4 1/2 inch production casing will be set and cemented in preparation for a fracture stimulation programme.

In addition to drilling to TD, subsequent to the announcement on 8(th) April 2014, drilling operations have:

-- Modified and tested the BOP for the 8 1/2 inch hole
-- Changed the drilling assembly to suit the 8 1/2 inch hole size
-- Weighted up the mud system for anticipated over-pressure in the reservoir
-- Drilled out excess cement and retrieved some debris
-- Drilled out of the 9 (5) /(8) inch casing and conducted a formation integrity test (FIT)
-- Directionally drilled into the Y zone reservoir section
Cambay-77H is offset 300m from the Cambay-76H horizontal well that underwent a successful multiple staged fracture stimulation programme along its 633m lateral section in 2012. However, it was suspended before testing due to downhole mechanical problems. Prior to suspending the well, gas and condensate flowed to surface during well control operations.

A shorter lateral section (350m) in Cambay-77H coupled with a conventional "plug and perf" method for fracture stimulation is expected to facilitate the primary goal of the well - recording hydrocarbon flow information at surface during a production test.

Oilex will continue to inform the market about progress during operations on a milestone basis as indicated below.

ü Setting and cementing of the 13 (3) /(8) inch casing at approximately 590m MD

ü Setting and cementing of the 9 (5) /(8) inch casing at approximately 1,650m MD

ü Completion of drilling operations at well TD, at approximately 2,360m MD

-- Setting and cementing of the 4 (1) /(2) inch production casing
-- Completion of mobilisation of the fracture stimulation spread to site
-- Completion of the fracture stimulation programme
-- An announcement in relation to flow back and production testing will be dictated by the well response to the stimulation programme

A time gap between setting and cementing the 4 (1) /(2) inch production casing and completion of mobilisation of the fracture stimulation spread is anticipated in order to minimise potential standby charges associated with demobilisation of the drill rig from site.