Quarterly Report to Shareholders 31 December 2012 | RNS | Ticker

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Quarterly Report to Shareholders 31 December 2012

RNS Announcement

RNS Number : 5457W

Oilex Limited

29 January 2013

QUARTERLY REPORT TO SHAREHOLDERS

31 DECEMBER 2012

Summary

Cambay PSC (45% & Operator) onshore Gujarat, India

· Insights from the independent review of Cambay-76H have been incorporated into a work programme and development planning activities while work continues on the approval processes.

· Potential gas buyers for Cambay-73 gas identified and approached as part of the preparation for restarting production.

JPDA 06-103 PSC (10% & Operator) offshore Timor Sea

· The Bazartete Prospect, previously agreed by the Joint Venture to be the third commitment well, is assessed by Oilex to have mean prospective oil resources of approximately 70 million barrels (unrisked, 100% basis) with a 23% chance of success.

· The Joint Venture has received a 1-year conditional extension of the Initial Period from the regulatory authority.

New Opportunities

The Company continues to review and evaluate suitable tight hydrocarbon projects that are consistent with its strategy and focus on delivering energy to India.

CORPORATE

· Changes to the Board and executive management previously foreshadowed were implemented as below:

o Dr. Bruce McCarthy stepped down as Managing Director to become a Non-Executive Director

o Ron Miller was appointed Acting Managing Director based in Perth, Australia

o Robert Ierace was appointed as Chief Financial Officer and Company Secretary, commencing
30 January 2013

o Ray Barnes retired from the Board as Technical Director and continues as a consultant

· Cash position of A$7 million as at 31 December 2012.

Overview

Oilex continues its transition to an early mover unconventional energy producer, focused on projects with significant tight reservoir potential. A number of changes to the board and executive management were implemented during the quarter. The Company continues to pursue further cost reduction measures which do not impair its technical and commercial capabilities.

During the reporting period, recommendations and insights from an independent US expert who reviewed the Cambay-76H well operations were incorporated into a detailed work programme and development plan for the Cambay PSC which has been submitted to the relevant authorities.

Oilex and its Joint Venture Partners have received a conditional extension to the Initial Period for JPDA 06-103 which enables the continued efforts to secure a suitable rig to drill the Bazartete oil prospect as the third commitment well.

OPERATIONS REVIEW

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

No Lost Time Incidents were recorded for Oilex personnel or contractors at any location during the quarter.

CAMBAY FIELD, Gujarat, India

(Oilex: Operator and 45% interest)

· The Cambay Field produced 704 barrels of oil (317 barrels net to Oilex) during the reporting period.

· A comprehensive forward plan for development of the Cambay Field, including a five-year outlook, was completed. This incorporated the recommendations of the independent review of Cambay-76H well operations.

· During the reporting period, the Company has completed the detailed Work Programme and Budget for Operating Committee and regulatory approvals. Subsequent to the reporting period the Operating Committee approved the Work Programme and Budget which have been submitted to the Management Committee for review and approval.

· Oilex continues to work closely with its Joint Venture Partner, Gujarat State Petroleum Corp. Ltd (GSPC), to secure approval for the forward work programme and budget.

· During the reporting period the Company contributed to residual costs of Cambay-76H and ongoing Joint
Venture activities as it works with GSPC to ensure the Joint Venture is adequately funded.

Cambay-73

· The Company continued working with the Directorate General of Hydrocarbons to secure approval of its application to resume production from Cambay-73. This includes a plan to sell small volumes of gas into a local market in an effort to minimise flaring.

· Potential gas buyers have been identified and discussions continue on a sales agreement and temporary transport plans for gas produced from Cambay-73.

· The Cambay-73 well is a conventional vertical well drilled and completed in 2008 with smaller-scale fracture stimulation and 10 metres of active perforations in the Y Zone. It is approximately 1000 metres from Cambay-76H with no discernible flow barriers or substantial changes in geological character between the wells. The well was shut-in on 28 June 2012 with cumulative gas production of 53 MMscf (24 MMscf net to Oilex) and condensate production of 1,483 barrels (667 barrels net to Oilex). Prior to it being shut-in the well was flowing at a rate in excess of 300 Mscfd with associated condensate.

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

· During the reporting period the Joint Venture continued engineering reviews and negotiations to identify and secure a suitable rig for drilling the Bazartete Prospect as the third commitment well.

· Subsequent to the end of the reporting period and pursuant to the Joint Venture's request, a conditional extension to the Initial Period of 1 year was received from JPDA regulatory authority and was accepted by the Joint Venture. A condition of the extension is the requirement to secure a suitable rig by 15 June 2013 for drilling of the proposed Bazartete Prospect.

· The Bazartete Prospect has been assessed by Oilex to have the potential to contain approximately 70 million barrels of mean prospective oil resources (unrisked, 100% basis) with a 23% chance of success. The range of prospective resource estimates is shown in Table 1.

Table 1 Bazartete Prospect - Prospective resource estimates

Prospective Resource Estimate	Unrisked Estimates
Millions of barrels	Low	Mean	High
Gross (100%)	9	71	179
Net Attributable to Oilex (10%)	0.9	7.1	17.9

BHANDUT FIELD, Gujarat, India

(Oilex: Operator and 40% interest)

· Oilex is continuing to investigate commercial options continue for the sale of small volumes of gas from the Bhandut Field to local interested parties. The Company is also investigating other options to realise value from this asset.

SABARMATI FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· The Sabarmati Field produced 910 barrels of oil (364 barrels net to Oilex) during the reporting period.

West Kampar PSC, Central Sumatra

(Oilex: 45% interest and further 22.5% secured*)

· Negotiations are continuing as Oilex pursues a commercial resolution to the Joint Venture dispute. The Company is reviewing legal advice received from its Indonesian lawyers on enforcing its Arbitration Award in Jakarta.

* See note to Asset Schedule

WA-388-P, Australia

(Oilex: 8.4% interest)

· Work is proceeding to close the joint venture for the WA-388-P offshore exploration permit subsequent to expiry on 27 August 2012, as deemed by the National Offshore Petroleum Titles Administrator (NOPTA).

New Opportunities

Oilex continues to review and evaluate suitable tight hydrocarbon projects that are consistent with its strategy of supplying hydrocarbon energy to the domestic Indian market. The Company's focus is on opportunities in which the successful application of new technology implemented in Cambay could provide near-term production and cashflow. In addition, the Company is reviewing tight reservoir opportunities that may allow it to develop international hydrocarbon resources for importation into India by leveraging its commercial relationships.

CORPORATE

· Oilex retained a cash position at the end of the quarter of A$7 million.

· Oilex continues to focus on cost reduction initiatives which do not impair its technical and commercial
capabilities.

· The Company has contracted a recruitment specialist to assist with the identification and evaluation of external and internal candidates for the position of Managing Director. This process is ongoing with a number of potentially suitable candidates being identified. The Board has given Mr. Ron Miller its full support to move forward in pursuit of the Company's goals and objectives as Acting Managing Director. Mr. Miller will receive A$10,000 per month as additional remuneration to 31 March 2013, and is to be granted 2 million unlisted options exercisable at 15 cents with a 3 year term, subject to shareholder approval.

The Company's website www.oilex.com.au is regularly updated with current information.

CORPORATE DETAILS
Board of Directors		Share Registry
Max Cozijn	Non-Executive Chairman	Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153, Australia Telephone: +61 8 9315 2333 Facsimile: +61 8 9315 2233 Email: [email protected] Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom Telephone: +44 (0) 870 703 6149 Facsimile: +44 (0) 870 703 6116
Sundeep Bhandari	Non-Executive Vice Chairman
Ron Miller	Acting Managing Director
Bruce McCarthy	Non-Executive Director
David Peterson	Company Secretary
Capital Structure as at 31 December 2012
Ordinary Shares 354,679,408		Stock Exchange Listing
Listed Options 151,992,402		Australian Stock Exchange Code: OEX
Unlisted Options 19,037,500		AIM Market of London Stock Exchange Code: OEX

asset schedule
ASSET	BASIN / STATE / COUNTRY	JOINT VENTURE PARTIES	EQUITY %	OPERATOR
Cambay Field PSC	Cambay/ Gujarat / India	Oilex Ltd	30.0	Oilex Ltd
		Oilex NL Holdings (India) Limited	15.0
		Gujarat State Petroleum Corp. Ltd	55.0
Bhandut Field PSC	Cambay/ Gujarat / India	Oilex NL Holdings (India) Limited	40.0	Oilex NL Holdings (India) Limited
		Gujarat State Petroleum Corp. Ltd	60.0
Sabarmati Field PSC	Cambay/ Gujarat / India	Oilex NL Holdings (India) Limited	40.0	Oilex NL Holdings (India) Limited
		Gujarat State Petroleum Corp. Ltd	60.0
West Kampar PSC	Central Sumatra/ Indonesia	Oilex (West Kampar) Limited	67.5 ⁽¹⁾	PT Sumatera Persada Energi
		PT Sumatera Persada Energi	32.5
JPDA 06-103 PSC	Flamingo / Joint Petroleum Development Area / Timor-Leste & Australia	Oilex (JPDA 06-103) Ltd	10.0	Oilex (JPDA 06-103) Ltd
		Japan Energy E&P JPDA Pty Ltd	15.0
		GSPC (JPDA) Limited	20.0
		Videocon JPDA 06-103 Limited	20.0
		Bharat PetroResources JPDA Ltd	20.0
		Pan Pacific Petroleum (JPDA 06-103) Pty Ltd	15.0

(1) Oilex (West Kampar) Limited is entitled to have assigned an additional 22.5% to its holding through the exercise of its rights under a Power of Attorney granted by SPE following the failure of SPE to repay funds due. The assignment has been provided to BPMigas (now MiGas) but has not yet been approved or rejected. If Oilex is paid the funds due then it will not pursue this assignment.

LIST OF ABBREVIATIONS AND DEFINITIONS

MMBO	Million standard barrels of oil or condensate
MSCFD	Thousand standard cubic feet (of gas) per day
MMSCFD	Million standard cubic feet (of gas) per day
BBO	Billion standard barrels of oil or condensate
BCF	Billion Cubic Feet of gas at standard temperature and pressure conditions
Discovered in place volume	Is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production
Undiscovered in place volume	Is that quantity of petroleum estimated, as of a given date, to be contained within accumulations yet to be discovered
Prospective Resources	Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development.
Contingent Resources	Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality.
Reserves	Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria: they must be discovered, recoverable, commercial, and remaining (as of the evaluation date) based on the development project(s) applied.

For further information, please contact:

Oilex Ltd	+61 (0)8 9485 3200	(Australia)
Ron Miller, Director [email protected]
RFC Ambrian Limited (Nominated Adviser and Joint AIM Broker)
Samantha Harrison [email protected]	+44 (0) 20 3440 6800	(UK)
N+1 Singer (Joint AIM Broker)
Jonny Franklin-Adams [email protected]	+44 (0) 20 7496 3000	(UK)
Tavistock Communications	+44 (0)207 920 3150	(UK)
Ed Portman [email protected]	+44 (0)7733 363 501	(UK)
Mercury Consulting
David Greer [email protected]	+61 (0)2 8256 3333	(Australia)

Competent Person's Statement

Information in this report relating to hydrocarbon reserves or resources has been reviewed and checked by Mr Peter Bekkers B.Sc. (Hons), the Chief Geoscientist of Oilex Ltd who has over 15 years of experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr Bekkers consents to the inclusion of the information in this report relating to hydrocarbon reserves and resources in the form and context in which it appears. Resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resources Management System, 2007.

This document may include forward-looking statements. Forward-looking statements include, but are not necessarily limited to, statements concerning Oilex Ltd's planned exploration program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate" "expect", "intend", "may", "potential", "should" and similar expressions are forward-looking statements. Although Oilex Ltd believes that its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01, 1/6/10, 17/12/10.

Name of entity

OILEX LTD

ABN		Quarter ended ("current quarter")
50 078 652 632		31 DECEMBER 2012

1	Consolidated statement of cash flows
				Current quarter $A'000	Year to date (6 months) $A'000
Cash flows related to operating activities
1.1		Receipts from product sales and related debtors		18	79
1.2		Payments for (a) exploration and evaluation		(2,074)	(2,416)
		(b) development		-	-
		(c) production		(106)	(289)
		(d) administration (net)		(339)	(1,023)
1.3		Dividends received		-	-
1.4		Interest and other items of a similar nature received		30	40
1.5		Interest and other costs of finance paid		-	-
1.6		Income taxes paid		-	-
1.7		Other (provide details if material)		-	-
		Net Operating Cash Flows		(2,471)	(3,609)
Cash flows related to investing activities
1.8			Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets	- - (21)	- - (49)
1.9			Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets	- - -	- - -
1.10			Loans to other entities	(24)	(22)
1.11			Loans repaid by other entities	-	-
1.12			Other (provide details if material)	-	-
			Net investing cash flows	(45)	(71)
1.13			Total operating and investing cash flows (carried forward)	(2,516)	(3,680)

		Current quarter $A'000	Year to date (6 months) $A'000
1.13	Total operating and investing cash flows (brought forward)	(2,516)	(3,680)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc	(43)	6,268
1.15	Proceeds from sale of forfeited shares	-	-
1.16	Proceeds from borrowings (net)	-	-
1.17	Repayment of borrowings	-	-
1.18	Dividends paid	-	-
1.19	Other (provide details if material)	-	-
	Net financing cash flows	(43)	6,268
	Net increase (decrease) in cash held	(2,559)	2,588
1.20	Cash at beginning of quarter/year to date	9,515	4,363
1.21	Exchange rate adjustments to item 1.20	15	20
1.22	Cash at end of quarter	6,971	6,971

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities		Current quarter $A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	227
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25	Explanation necessary for an understanding of the transactions

2	Non-cash financing and investing activities
2.1	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	N/A
2.2	Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
	N/A

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available

$A'000

Amount used

$A'000

3.1

Loan facilities

3.2

Credit standby arrangements

4	Estimated cash outflows for next quarter	$A'000
4.1	Exploration and evaluation	1,250
4.2	Development	-
4.3	Production	100
4.4	Administration	650
	Total	2000

5	Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.		Current quarter $A'000	Previous quarter $A'000
5.1	Cash on hand and at bank	2,727	5,849
5.2	Deposits at call	4,244	3,666
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter (item 1.22)	6,971	9,515

6	Changes in interests in mining tenements
		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed		Refer to Permit/Asset Schedule in Quarterly Report
6.2	Interests in mining tenements acquired or increased		Refer to Permit/Asset Schedule in Quarterly Report

7	Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.
		Total number	Number quoted	Issue price per security	Amount paid up per security
7.1	Preference +securities (description)	-	-	-	-
7.2	Changes during quarter
	(a) Increases through issues	-	-	-	-
	(b) Decreases through returns of capital, buy-backs, redemptions	-	-	-	-
7.3	+Ordinary securities	354,679,408	354,679,408	Various	-
7.4	Changes during quarter
	(a) Increases through rights issue	-	-	-	-
	(b) Increases through employee performance rights issues	-	-	-	-
	(c) Increases through issues (options exercised)	2,565	2,565	$0.15	-
	(d) Decreases through returns of capital, buy-backs	-	-	-	-

		Total number	Number quoted		Issue price per security		Amount paid up per security
7.5	+Convertible debt securities (description)	-	-		-		-
7.6	Changes during quarter (a) Increases through issues	-	-		-		-
	(b) Decreases through securities matured, converted	-	-		-		-
7.7	Options				Exercise price		Expiry date
	(description and conversion factor)

		151,992,402	151,992,402		$0.15		07/09/2015

		75,000	-		$0.50		01/08/2013
		4,150,000	-		$0.30		01/07/2014
		8,737,500	-		$0.37		10/11/2014
		75,000	-		$0.63		01/08/2015
		3,000,000	-		$0.15		17/12/2015
		3,000,000	-		$0.25		17/12/2016
	Total	171,029,902	151,992,402
7.8	Issued during quarter	3,000,000	-		$0.15		17/12/2015
		3,000,000	-		$0.25		17/12/2016
7.9	Exercised during quarter	2,565		2,565	$0.15	07/09/2015
7.10	Expired during quarter	16,687,500		-	$0.30	10/11/2012
7.11	Debentures (totals only)	Nil		Nil
7.12	Unsecured notes (totals only)	Nil		Nil

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX.

2 This statement does give a true and fair view of the matters disclosed.

Date: 29 January 2013

Acting Managing Director

Ron Miller

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCNKFDNBBKBCDB

RNS metadata

Title: Quarterly Report to Shareholders 31 December 2012
Time: 10:36:13
Date: 29 Jan 2013
Category: Miscellaneous
ID: 5457W