Oilex, SPE to spud C. Sumatra appraisal well

Perth-based firm Oilex Ltd. reported on Monday that Pendalian-3 appraisal well in West kampar PSC onshore Central Sumatra will be spud within 10-15 days.

The company said mobilization of equipment contracted by the operator PT. Sumatera Persada Energi (SPE) to drill the well had commenced.

Oilex acquired 45 percent interest in the block last May from SPE, which retained 55 percent interest, by refunding certain past costs and funding the drilling of the Pendalian-3 exploration/appraisal well, and the acquisition of 2D and 3D seismic work commitment programs.

Pendalian-1 well was discovered by previous operator in 1993. The drilling encountered a number of oil zones at depths ranging from 250 meters to 500 meters. Two of the zones flowed oil from drill stem tests in Pendalian-1 with maximum rates achieved of up to 530 barrels of oil per day. Independent technical work by Oilex indicates that the best estimate of the ?in place resource? for the field is 12 million barrels of oil.

If commercial productivity is confirmed by the extensive cased hole testing program planned for the conventionally drilled Pendalian-3 well, the West Kampar Joint Venture plans to acquire a 3D seismic survey over the Pendalian Field and a number of satellite structures and to accelerate development. Shallow, low cost wells and the proximity to infrastructure are attractive incentives for the rapid development of the field, said the company.

The West Kampar PSC area is located in central Sumatra adjacent to Chevron?s working area. Awarded in October 2005, the PSC work program commitment provides for the acquisition of 250 kms of 2D seismic and 50 sq kms of 3D seismic along with drilling of the Pendalian-3 well and an additional 4 exploration wells by November 2008.(denny)