Share Talk asked investors for questions we could submit to the Oilex management team on the 12th of April 2022. Today we have received a reply.
The formate is the way we submitted your questions ( no particular order) with a reply next to each one, may we add the company answered every question we sent to them, thank you. Hopefully, you can see the Q you submitted – is answered.
• Refrac equip update – when starting? It is currently anticipated to be July 2022.
• How often are flow rates announced to the market? Regular updates on Cambay gas flow rates will be issued to the market so investors are up to date on-field performance.
• Date for next well to drill? Contingent on results of C-77H re-frac, the current expectation is Q4 2022 / Q1 2023.
• CCS licence update? We are waiting on the formal process to commence with NSTA, the regulator.
• CCS project economics – Revenue/NPV/timelines? TBA after the full FEED study is completed.
• JV this year? A formal Cambay farm-out process is expected to commence after the C-77H re-frac.
• What’s the current BOE from the Cambay field now it’s switched back on? TBA when production stabilises. We shall update the market in due course.
• What are total netbacks after royalties etc if any? There are no ORRs on Cambay, just GoI royalty.
• What’s the expected cost of the refrac operation? $1.8 million, subject to contract.
• What currency are gas sales being settled in? USD.
• What indication of flow can you give us from the Cambay well, just as a ballpark. TBA when production stabilises, but we would anticipate between 0.5 – 1 mmscfd.
• Will the refracking definitely begin in July? July is booked with service providers.
• Potentially, what revenues could CCS generate for the company? TBA after the full FEED study is completed.
• Can you give us a rough timeline for the development of CCS. We expect full FEED to commence after the CCS licence award; FEED will take c. 9 months. Commissioning would be anticipated 3 years after a Final Investment Decision – so perhaps by 2026?
• Are we likely to see director buys in Oilex? A Long Term Incentive Plan payable in shares is under development, subject to shareholder approval.
• Financially, what incentives are there out there to drive CCS that Oilex can access? There are various government grants but we are trying to proceed on a purely commercial basis. This will make the economics of the project very robust and not reliant on grants.
• Have we spoken with interested parties Regarding the development of Cambay? Yes, some farmees have shown interest.
• Do we plan more Acquisitions of more depleted fields for CCS? Yes, we are looking at opportunities in the UK
• I would be grateful for some technical details around the re-frac; incl. challenges to overcome; thoughts on flow rates; estimated percentage chance of success; what if re-frac fails; next steps if it does. The Eocene reservoir comprises much younger rocks than unconventional wells in the US and therefore requires a different fraccing method which has been studied extensively by the company. I estimate at a greater than 75% chance of success. If the re-frac is unsuccessful, we will have to review the future of Cambay – probably with a scaled-down field development.
• What would success look like on all fronts 12 months from now? A successful C-77H re-frac, a successful new (C-78H) well drilled and on production, a farmout agreement on Cambay, and the award of a CCS licence for the Medway Hub with FEED underway.
• What is the company’s view on Chance of Success (COS) on the refrac of C77H? Greater than 75%.
• How much is the refrac programme costing? C. $1.8 million, subject to contract.
• Are the company likely to have to raise further working capital, even with cash flow now being generated from gas/oil sales? Yes
• Are the board going to put some skin in the game? Understand options are being considered? As mentioned above, a Long Term Incentive Plan payable in shares is under development, subject to shareholder approval.
• When is the likelihood of the new well to be drilled? Quarter 3? In Q4 2022 / Q1 2023.
• What’s the difference between the new well to be drilled versus the existing well? An effective frac stimulation.
• How is the CCS project likely to be funded? Through a combination of both debt and equity.
• Is there access to government funding for the CCS project? There are various government grants but we are trying to proceed on a purely commercial basis. We are keen to ensure the project moves forward with robust economics.
Email: [email protected]
Tel: +61 8 9485 3200
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