Acting as operator, Oilex on Monday spudded Cambay-72 – the first in a planned two- to three-well program – which has a total planned depth of 1835m. Once drilling is completed, the well will be logged and cased to determine whether oil or gas is present.

The Dalma MR-4 rig will then move to the second well location, Cambay-71, and if necessary, testing will be undertaken by a workover rig at a later date.

Oilex managing director Bruce McCarthy described the spudding of Cambay-72 as an “exciting milestone”, with the first phase drilling program representing the culmination of months of negotiation and technical analysis.

“This is our first major drilling program to commence since the company adopted a new direction last year and is one of the key programs that will be funded by the recent successful $20 million share placement,” he said.

Oilex chose the initial two well locations based on a detailed assessment of historic data from the Cambay field’s existing wells.

The wells will target a potential oil leg on the Western High Trend, with results from modern wireline and formation fluid and pressure information helping to update the existing database.

Primarily the wells will target the Oligocene Sandstone (OS II), with secondary potential existing at the Miocene and Eocene levels.

Oilex said these sandstone reservoir units were proven producers in fields immediately north and south of Cambay. Oil is being produced on the Western High at low rates on an intermittent basis from wells that have suffered formation and well bore damage in the past.

The oil and gas resource estimates for the Cambay OS II and the Eocene EP IV sandstones on the Western High Trend are 16-108 million barrels (MMbbl) of oil (with a best estimate of 43MMbbl), 77-432 billion cubic feet of gas (with a best estimate of 173Bcf) and 1.6-9.8 million stock tank barrels of condensate (with a best estimate of 3.7 million stock tank barrels).

In June, Oilex announced it was taking over as operator of the Cambay field, in which it has a 45% stake, 15% of which was acquired from Niko Resources and remains subject to approval by the Indian Government. Gujarat State Petroleum Corporation (GSPC) holds the remaining 55% interest in the Cambay production sharing contract.

The Cambay field is located in a prolific onshore petroleum province in Gujarat at the northern end of the Bay of Cambay, close to existing pipelines and industrial infrastructure in India’s main heavy industrial corridor.

Also subject to government approval is Oilex’s 40% interest in the Bhandut field, located south of Cambay near the industrial centre of Hazira, and the Sabarmati field, further to the north near Ahmedabad, with GSPC holding the remaining stake.