Oilex's Bhandut-3 Well Gas Sales Agreement Gets Indian Government Endorsement

Oilex Ltd on Friday announced it has received endorsement from the Government of India for the sale of gas from the Bhandut-3 well, which is located within the Bhandut field in Gujarat state. 

“This is a critical milestone for returning the field to production, supplying gas to the local market and generating positive cash flow for the company from a previously idle asset,” the company said.

Bhandut Joint Venture will proceed to establish the appropriate production facilities for Bhandut-3.  This will include a compressed natural gas (CNG) loading facility that will enable CNG bullet trucks to be loaded at site for transportation of the gas to end users.  Bhandut-3 gas is lean and therefore no material condensate production is expected.

As announced by Oilex on 20 August 2013, Bhandut-3 flowed at a maximum rate of 6.5MMscfd through a 10mm choke with a flowing tubing head pressure of 1,190 psia during an isochronal test.  The test confirmed the reservoir sand has a permeability of 124mD, making it a conventional reservoir.  It is planned to deliver approximately 0.5-1MMscfd from the Bhandut-3 well.  The company anticipates the cost of the production facilities payback in 7 months from commencement of production based upon the contracted gas price.

“We are very pleased to receive the endorsement from the Government of India to sell gas from Bhandut-3 and restart production from the field to provide gas to the local market.  Oilex continues towards generating additional cash flow through increasing production from its assets in India,” Managing Director of Oilex, Ron Miller, said.