Oilex in 10-year PSC extension hurry

Vol 20, PW 16 (04 May 17) News in Brief

In three years the London share price of Cambay block operator Oilex has nose-dived from £10.85 to £0.31p today.

With luck measures designed to re-start Cambay production and convince the government to agree a 10-year PSC extension, which ends on September 23, 2019, will reverse that trend. On April 28, Oilex announced mobilisation of a workover rig to revive gas wells C-70 and C-23z.

Unusually, Oilex has agreed to pay in full. "As agreed with (JV partner) GSPC," said Oilex on April 28, "Oilex is to fully fund the workover expenditure and receive all revenue until costs are recovered." GSPC will be relieved.

By March 31, its outstanding cash calls for Cambay stood at $6.8m. No surprise that in December 2016, it began looking for a buyer for its 55% stake, but according to Oilex, which is interested, the process has stalled.

Success at C-70 and C-23z are Oilex's immediate priority. "Expectations are for modest flow rates," says Oilex, "(but) a successful outcome will support the application to extend the PSC." Oilex has also received DGH permission to re-start C-73 and C-77H well production.