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What: Shares in Oilex (LSE: OEX) jumped up over 40% today, following the announcement that the oil and gas exploration and production company has commenced controlled flow-back of frac fluids at its Cambay-77H well in the Indian state of Gujarat.
So what: Higher than expected light oil/condensate was encountered, and is now being recovered to surface and separated for sale, along with associated reservoir gas.
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Management stated that “Cambay-77H continues to exhibit characteristics of a high performance multistage frac’d horizontal well”, with managing director Ron Miller commenting:
“We are very pleased that Cambay-77H is exhibiting all of the signs of a high performance well for Oilex. Flowback started very strongly and remains on track to take 2 to 3 weeks. The recovery of light oil/condensate with the gas under clean-up flow this early in the flow-back phase is considered positive and the hydrocarbon liquid volume exceeded our expectations. Oilex looks forward to commencing the production testing after sufficient frac fluids have been recovered from the well and the flow has stabilised.”
Now what: Oilex doesn’t pay a dividend, but at 9p trades at a significant discount to its high of 32.45p in 2007, a year after it became a publicly listed company.
