Oilex (LON:OEX) has told investors it is now ready to begin the commissioning process to start up gas production from the Cambay-73 well, onshore India.
It comes after the completion of pipeline work, and work to tie-in the well to production facilities is currently underway.
Production, at a rate of between 50 to 60 barrels oil equivalent per day, will start around two weeks following the completion of the commissioning.
Start-up of Cambay-73’s production represents a significant milestone for Oilex and it the first step towards positive cash flows from India, according to managing director Ron Miller.
“Oilex continues to deliver on its plan of production, near-term cashflow and reserves growth to create a sustainable business in the midst of a robust and supportive domestic market for petroleum energy," Miller added.
Gas sold from the Cambay field is expected to achieve favourable prices, due to strong local demand, and Cambay-73 is among a number of planned production wells.
Zac Phillips, analyst at SP Angel, said the move towards the start of production was good news not just for the company but also for shareholders.
“Now that the near term cash flow has been shored up, we believe that the next stage is for management to focus on how to maximise the benefits from its ownership of Cambay to generate further value for shareholders,” the analyst said in a note.
“The next stage is going to be vital, as it is going to be key to understanding the direction the company intends to move in next.”
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