Chilli, I can't see OEX just drilling Gas only Wells when 77H...

Chilli,

I can't see OEX just drilling Gas only Wells when 77H has just demonstrated that we have approx 66% Oil and 33% Gas flowing from 77H. The lesson learned from 77 H is that OEX perforated for Gas and only light Condensate .... but that is not what they found they had. As a result the Well performance is impaired, which in this case is caused by the Casing Perforations being too small for efficient Oil flow and the Fracking Sand also being too fine as it was only mean't to keep the fracs open for Gas..... not thicker moleculed oil which tends to block with the oilflow. What most don't seem to grasp is that until you have a successful test.... (yes I kow 76H failed) ... such as with 77H - you don't know what you have actually got and therefore can better plan for the next Well to optimise the field. Reading many of the posts, I get the distinct impression that many on here think it should be perfect on the first drill - even when you don't know what you have actually got down there. It simply doesn't work like that. Clearly the next well needs to have larger perforation holes, heavier/coarser fracking sand and longer Laterals. As India has a Net deficit of both Oil and Gas, you would expect OEX to supply both commodities to the Market, because OEX is going to get both out of the wells. Lets say India has to buy Oil on the World Market at the current (even at $70 to $60) market rate, then they have to import it to Indian Ports and distribute it because they have a deficit. OEX is getting 66% Oil out of their wells and can sell it at a competitive price to the Imports. I can't see the Oil price staying down for the whole 10 years of the expected life of each well, so OEX will experience a range of Oil prices over that time. OEX can only drill the well once and it would be shortsighted to not make it the best performer they could. Oil production is more profitable than Gas production, the Cambay Field produces a combination, and India has a shortage of both commodities. As the announcement demonstrates, the well is more profitable with a longer Lateral, producing both Oil and Gas, and subsequently paying for the cost of the well in the shortest time period.

I agree we should have conducted the Capital raising when the share price was high..... but as they say.... hindsight is a beautiful thing.....

Rusty