OEX 25.0% 0.3¢ oilex ltd

sarha 1 a discovery well uk post

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    IMO DST #2A confirms the Sarha-1 well as a discovery well, which has some commercial potential, the extent of which is yet to be fully determined (even say 300bbls a day from one zone would probably be commercial at this 1300m depth, and it would probably be a lot more than that of course).

    Apparently the poor cement bonding between the casing and formation is allowing communication between various sections of the well and is 'blurring' the test results. IMO it is probable that if the oil zones were properly isolated from the water zones in this well better test results would be achieved with higher flow rates, and water cut would probably drop to near zero percent. This seems to be what Oilex is saying regarding the next formation the Gharif – Oilex may feel it is not worth the effort to test this formation in this well and again probably get 'blurred' results.

    The most crucial point for me in this announcement, is that Oilex says the testing of the Gharif formation could perhaps be more appropriately carried out in a subsequent well. To me this indicates Oilex considers the Sarha structure a commercial discovery warranting at least one further well, and I feel this would probably be the best course of action for Oilex – to come back (possibly after the Ghadaq-1 exploration well) and drill Sarha-2 and get a good cement job and then get good test data on all the four zones and assess the full potential of this discovery.

    A second well on the Sarha-1 structure would mean further delays in getting confirmation of commerciality, but good test results (probably from more than one zone) would justify the decision IMO.

    I am very encouraged by this latest announcement and IRFI
 
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