Oilex (LON:OEX) has kicked off the second stage of the fracture stimulation programme at its “proof of concept” Cambay-76H well in India following the successful completion of the first stage.
The “low risk high reward” well is testing the production potential of the Y Zone interval of the extensive Eocene reservoirs in the onshore Cambay production sharing contract (PSC).
The fraccing programme – a procedure designed to increase production from the well – includes a total of eight stages. Following the completion of the programme, the company will remove stimulation fluids from the well bore and conduct a flow test.
The company believes the potential for improving the production rate from the existing wells and the scope for full scale redevelopment of the fields are “encouraging” given that the reservoir distribution is poorly understood.
Oilex also notes that oil and gas demand in India remains far ahead of domestic supply.
The project is being developed by Oilex in a joint venture with Oilex NL Holdings India and Gujarat State Petroleum Corporation.
Oilex operates the project and holds a 30 percent working interest in the venture. Oilex NL and Gujarat State Petroleum Corporation have stakes of 15 percent and 55 percent respectively.
Oilex has high hopes for the Cambay basin, with its material interests standing at 40-45 percent in three “brownfield” redevelopment projects there: the Cambay, Bhandut and Sabarmati fields.
These fields are currently all producing small to moderate volumes of oil.
Shares in Oilex were down 0.5 pence (1.8 percent) at 27.75 pence this morning. The company has a market cap of £70.3 million.