11 February 2012

Oilex

SPECULATIVE BUY

18/08/2010 Robert Tyerman

Industry sources say imminent resource estimates for Aussie energy counter Oilex's Cambay gas project in India could dwarf previous indications.

Local observers suggest earlier estimates of 250 to 780bn cubic feet for the project, which is a joint venture with the state of Gujarat, could prove distinctly conservative. The AIM-quoted company, based in Perth, Western Australia, and steered by ex-Cairn Energy luminary Bruce McCarthy, says infrastructure is in place near this onshore project, whose development and production costs would be much less than those of an equivalent offshore project.

Local demand for gas, especially in an industrialised state such as Gujarat, is strong, with major Japanese-backed projects in the offing. Oilex shares, which have slumped from 83p four years ago to 7.5p today, could repay a brave punt by investors undeterred by country and other risks.

Tags: AIM, Commodities, Emerging markets

Sector: Oil & Gas Producers

Companies: Oilex

Market cap: £16.5m

PE Forecast: n/a

Share price: 7.5p

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