Oilex (OEX) told investors that the Government of India has approved the Cambay PSC Work Program and Budget for the Indian financial year 2021-22 which runs from April to March.

The Indian Ocean Rim-focused oil and gas exploration and production firm described the approval as “another positive step in re-establishing the Cambay PSC work program.”

Oilex said the Work Program and Budget (WP&B), which is subject to financing being secured before implementation, includes two key items; an appraisal/development drilling program as well as the restart of low-rate production at the currently shut-in Cambay production facility.

Oilex recently announced the details of its intention to acquire GPSC's 55% PI for US$2.2m, and the transaction has since received the approval of the state government of Gujarat. 

Following the completion of the Transaction, which is subject to the finalisation of a binding sales and purchase agreement with GSPC, and the Government of India's approval for the transfer of GSPC's PI, Oilex will hold a 100% participating interest in the Cambay PSC. 

Earlier this week, Oilex announced that the funding required to complete the above acquisition has been arranged via a conditional equity capital raising with existing sophisticated shareholders and clients of Novum Securities Limited, of £2.4m (A$4.3m).

"This approval from the Indian government is another positive step in re-establishing the Cambay PSC work program which is directed at establishing gas production from the substantial resource base in the EP-IV reservoir,” said Oilex's MD, Mr Joe Salomon.

Salomon added, “As previously reported, Oilex has undertaken detailed studies which have outlined the most effective drilling, stimulation and flow testing programs to develop the discovered gas accumulation, and importantly which identified no impediments to potentially building a significant production base from the known EP-IV gas resource.”

Shares in Oilex have seen an over four-fold increase in value since the beginning of 2021. The stock was trading 10.71% higher this morning at 0.31p following the announcement.

Reasons to Follow OEX  

Oilex’s strategy is to use its extensive technical and commercial expertise to explore, appraise and develop petroleum resources in prolific basins. 

Strategic Focus 

The group exclusively focuses on selected ‘Super Basins’ which have the potential to present multiple low-cost entry opportunities to Oilex.  

Proven Success in Australia 

Its new business development efforts bore fruit through the establishment of the focus on “super-basin areas” in Australia’s Cooper-Eromanga Basins and the UK’s Continental Shelf.   

Future Growth Projects 

Oilex said to investors that it ‘continues to review business opportunities in high potential areas’ through its contact base and its belief that good projects with good management can be funded.  

Despite the ‘very challenging climate’, Oilex said it remains focused on returning value to shareholders with the short to medium focus of restoring value to the share price through sound management practices. 

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