Oil and gas explorer Oilex (ASX:OEX, LON:OEX) has moved nearer...

Oil and gas explorer Oilex (ASX:OEX, LON:OEX) has moved nearer production at Cambay in India after new proved and probable resources were identified.

Ron Miller, Oilex’s managing director, said the new estimate, carried out by consultant RISC, validates the commercial development of the Cambay Field.

The Y zone at Cambay is now said to contain 2P (proved and probable) reserves of 206 Bcf (billion cubic feet) gas and 8 MMbbls (millions of barrels) of condensate (C5+).

Of this, Oilex has a net working interest of 93 Bcf gas and 3.6 million barrels (MMbbls) of condensate.

Across two zones, X and Y, 2C contingent resources were 720 Bcf gas and 52.8 MMbbls of condensate, of which Oilex’s net working interest is 324 Bcf gas and 23.8 MMbbls.

Broker SP Angel said the update underlined how far the Cambay asset has matured, and, in comparison to the build-up the first appraisal well, how quickly it has turned into a world class asset.

“93bcf is nothing to be sniffed at, and when you consider that the P3s are 170bcf and the 1C is a further 215bcf, this is a significant step up from where we have been previously.”

The broker attributes a value to Oilex of 8.4p per share, but acknowledges there will be a discount as it seeks funding to develop the asset base.

“The current valuation is undemanding and the prospects for future cash flow are significant,” the broker concluded.

Oilex expects to begin production from the Cambay-73 well in May and is also working towards production from the recently drilled Cambay-77H well.

Shares rose 19% to 4.15p.