Oilex to Sell Stake in Cambay PSC

Oilex Ltd has agreed to sell a 10% participating interest in the Cambay Production Sharing Contract incorporating its Tight Hydrocarbon Project (Cambay Project) in Gujarat, India to Magna Energy for $4 million.

Magna also has an option to acquire an additional 5% participating interest for a total payment of $2 million. These payments will include the working interest share of the 2013/14 Cambay work program and budget and the value of the corresponding share of moveable property included in the joint venture books.

Under the terms of agreement, the funds received would be applied towards the proportion of the cost to drill the Cambay-77H horizontal well that relates to Oilex’s current 45% participating interest in the PSC. 

Based on the gross estimated well cost of Cambay-77H of approximately $13 million, it is anticipated that up to 100% of Oilex’s share of the costs will be covered by the funds from Magna.

The Cambay-77H well will be the second multistage fracture stimulated horizontal well drilled in the Cambay Project and is designed to confirm the applicability of North American technology for development and production of tight hydrocarbon resources in India.

Oilex retains operatorship and a minimum of a 30% equity interest in the Cambay PSC, if the additional 5% equity interest option is exercised, corresponding to independently certified 2C Contingent Resources of 50 million boe, of which approximately 50% is gas.