Shares in AIM and ASX oil and gas group Oilex Ltd (LON:OEX) soared by 128% to 18.25p during the morning on news of a substantial reserves and resources upgrade at its 45%-held Cambay field in India. Oilex has been carrying out detailed technical studies of the field to unlock potential of "tight" reservoirs using leading-edge North American "shale gas" industry technology. The studies indicate a very good correlation between the Cambay Eocene reservoirs and the Eagle Ford and Haynesville "tight/shale" plays that are seen in the US. Oilex said that drilling and production tests would be carried out during the first half of 2011

In terms of net recoverable reserves to Oilex, the P50 figures come in at 384 billion cubic feet (BCF) of gas and 17 million barrels (MMbbls) of condensate. The company hired two North American companies to advise it on the studies, including NuTech Energy Alliance, a leader in advanced petrophysical, geological and fracture stimulation solutions for "tight" and "shale gas" reservoirs, and Morning Star , a worldwide petroleum consulting group with expertise in reserve certification of "tight" reservoir projects.

The studies indicate a very good correlation between the Cambay Eocene reservoirs and the Eagle Ford and Haynesville reservoirs, two of the most prolific "tight/shale gas" plays in North America. The Cambay Eocene reservoirs that have been analysed display relatively good porosity for "tight reservoirs" and with a gross thickness of 200 to 500 metres these zones are substantially thicker than most North American "tight/shale" reservoirs. The studies have modelled Estimated Ultimate Recoveries (EUR's) of between 6 and 11 BCF gas with associated condensate per well.

Oilex said it now expects to submit data in October 2010 for independent reserves certification in early 2011. Subject to joint venture and Indian Government approval, it plans to evaluate the "tight" reservoir potential with drilling and production testing using modern, multi-stage fracture stimulation technology. These operations are expected to continue through the first half of 2011 as equipment and materials become available.

Oilex’s managing director, Dr Bruce McCarthy, said: “The company has renewed its focus on India and has made significant progress in unlocking the potential of the Cambay "tight" Eocene reservoirs that extend over the 40,000 acre contract area. Key to this success has been applying leading-edge North American tight/shale gas industry expertise and proven technology to…

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