Oilex quadruples gas in-place at Cambay

Vol 10, PW 2 (18 May 06) News in Brief

Oilex of Australia is the latest company to have discovered the potential of discarded ONGC acreage.

On 15th May, Oilex announced that the Cambay block in Gujarat where it is operator contains vastly more reserves of oil and gas than thought. The best revised estimate of potential resource original volume in place has now increased by 48% from 29m to 43m barrels of oil and by 409% from 34 to 173bn cubic feet of gas, said the company.

Last week, Oilex shares more than doubled on the good news. Oilex tells us an in-house consultant not an outside reserves consultant - compiled the new estimates.

Nonetheless, the revised numbers are unsurprising: ONGC has an impressive track record of relinquishing prospective acreage. Cairn, Hardy, Niko, Canoro, British Gas and now Oilex have all benefited.

Earlier this year Oilex paid Niko $5.49m to acquire its 45% stake in the Cambay block.