Oilex is acquiring a 45% interest in Indonesia"s West Kampar Production Sharing Contract (PSC) that has an existing onshore oil discovery.

The stake is being acquired from PT Sumatera Persada Energi (SPE) and will involve Oilex refunding certain past costs and funding the drilling of the Pendalian-3 exploration/appraisal well, planned for July, and the acquisition of 2D and 3D seismic work commitment programs.

The existing oil discovery can be brought into production quickly if justified by appraisal drilling and a number of highly prospective structural trends that will be the subject of an intensive exploration program.

West Kampar PSC is in central Sumatra adjacent to the most prolific oil producing province in Indonesia. Awarded in October 2005, the PSC work program commitment provides for the acquisition of 250km of 2D seismic and 50sqkm of 3D seismic along with drilling of the Pendalian-3 well and an additional four exploration wells by November 2008.

SPE is an Indonesian oil and gas company which is part of the PT Asiabumi Petroleo group, a diverse private company with interests in crude oil shipping among other activities. It acquired the PSC in its own right as operator in 2005 as a relative newcomer to the Indonesian exploration and production scene. The senior management at SPE have substantial experience in the upstream oil and gas sector in Indonesia gained while working with international companies over a number of years.

The Pendalian-3 well will appraise the oil field discovered in 1993 by the Pendalian-1 well, a cored slim hole which encountered a number of oil zones at depths ranging from 250 metres to 500 metres. Two of the zones flowed oil from drill stem tests in Pendalian-1 with maximum rates achieved of up to 530 barrels of oil per day. Independent technical work by Oilex indicates that the best estimate of the "in place resource" for the field is 12 million barrels of oil.