India government approves Oilex sale of Bhandut

Oilex said on Tuesday that all necessary approvals from the Government of India for the sale of its participating interest in the Bhandut production sharing contract (PSC) had now been completed.

The AIM-traded firm said that following those approvals, all conditions for the sale of its interest in Bhandut had now been met, with settlement of the $0.29m (£0.21m) consideration from the buyer expected later in the month.

On 28 January, Oilex announced that it had accepted an offer from India-based Kiri to acquire its participating interest in Bhandut.

Oilex held a 40% interest in the Bhandut Field, with the Gujarat State Petroleum Corporation (GSPC) holding the remaining participating interest.

The company said it would receive $0.29m in cash for the sale of its interest and the transfer of its operatorship rights to Kiri.

Kiri had also expressed an interest in engaging the services of Oilex on a contract basis to review field production, stabilise operations, and initiate field re-development of the Bhandut PSC, which was currently underway.

The field had been on care and maintenance, and did feature existing production facilities.

Bhandut had been fully provided for in Oilex’s financial statements, the board said.

“While completion of this transaction has taken longer than anticipated, primarily due to the impact of Covid-19, a positive outcome has now been achieved,” said managing director Joe Salomon.

“This sale provides Oilex with additional current and future cash which will be applied to the existing Cambay and East Irish Sea projects.”

At 1142 BST, shares in Oilex were up 10.83% at 0.33p.