Jay Polychem says it's not running out of cash

Vol 17, PW 6 (17 Oct 13) Exploration & Production
     

Delhi-based Jay Polychem has hit back at rumours that it is abandoning a 13-well drilling programme at its 136-sq km NELP-VIII onland Cambay basin block CB-ONN-2009/8 because of a cash shortage.

Jay Polychem demobilised its rig early this month (October) after completing only two of 13 committed wells. The 750-hp rig from Quippo was hired in February to drill two wells with an option to drill another 11.

“The two wells we drilled were dry,” says Quippo. “So the drilling contract was not extended.

” Quippo is struggling to get Jay Polychem to pay fees of up to Rs 3.5cr ($570,000). Wireline logging firm HLS Asia says it is facing similar payment problems with Jay Polychem.

“We have received post-dated cheques for late October,” says an HLS source. But both Quippo and HLS confirm they have received standby letters of credit guaranteeing payment.

A senior source at Jay Madhok group, which owns Jay Polychem, says there is no cash crunch and the company will be continuing its drilling campaign. “We hired the rig only for two wells and now we plan to test the wells,” he says.

He adds Jay Polychem will perforate the two wells in about a month. “From logging we have identified potentially prospective formations and are targeting the Olpad formation," we hear.

"We are looking forward to drilling another two wells in February next year.”