Oilex signs up Schlumberger for Cambay re-fracking

The AIM-traded firm said it has executed a letter of intent with Schlumberger Asia Services for the supply by Schlumberger of hydraulic fracturing services, coiled tubing and nitrogen services and perforation services, for the planned re-frack of the Cambay C-77H well in July.

Due to the higher-than-expected re-frack costs caused by a global shortage of fracking services and equipment, and the delayed start-up of gas production on the Cambay field, Oilex said it was planning to raise additional funds over the next month.

In addition, Oilex said it had negotiated a revised gas sales agreement with Enertech Fuel Solutions for the sale of gas from Cambay.

The revised agreement was based on the recently-announced Indian government domestic gas price of $6.1 per million British thermal units (mmBTU), plus a 20% premium.

It said the revised gas price was thus now $7.32 per mmBTU, compared to the previous price of $4.2 per mmBTU.

“Following a competitive tendering process, the company has selected Schlumberger to provide the bulk of the services required for the upcoming C-77H re-frack operation,” said chief executive officer Roland Wessel.

“We are pleased to have secured the equipment and services for the important C-77H re-frack operation given the worldwide shortage of fracking services.

“The amended gas sales agreement is consistent with the recent Government of India revised domestic gas price announcement.”

At 1348 BST, shares in Oilex were down 15.6% at 0.19p.