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Quarterly Report to Shareholders

RNS Announcement

RNS Number : 4279D

Oilex Limited

29 April 2013

QUARTERLY REPORT TO SHAREHOLDERS

31 MaRCH 2013

Summary

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

· Subsequent to the reporting period, the Cambay Work Programme and Budget covering activity through to the end of March 2014 was approved.

· During the quarter, three well workovers have been completed using a rig assigned from GSPC.

· A Gas Sales Agreement was signed for off-spec gas from Cambay-73 and was submitted to the Government for endorsement.

· Formal tendering of the Cambay 77 offset well rig contract and long lead items has commenced.

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

· During the period the Joint Venture received a one-year conditional extension of the Initial Period from the regulatory authority.

New Opportunities

· Following the conclusion of the reporting period, the Company secured a Special Prospecting Authority (SPA)-0055, covering 11,400km² in the Canning Basin, onshore Western Australia.

· The Company has since submitted bids on two gazettal blocks adjacent to the awarded SPA, which would provide complete coverage of the same play fairway identified in SPA-0055.

Overview

Oilex continues its transition to an unconventional energy producer, focused on projects where the company has first mover advantage to assets with significant tight reservoir potential. Subsequent to the reporting period, regulatory approvals for the Cambay Field Work Programme and Budget to the end of March 2014 were received. Work has commenced on tendering activities associated with long lead items and the drilling rig for the firm well, Cambay-77.

A Gas Sales Agreement for off-spec gas from Cambay-73 has been signed and submitted for endorsement by the Government as part of the process to restart production from this well.

The Company has secured an additional asset for its portfolio in the Canning Basin, onshore Western Australia and has submitted bids on two gazettal blocks adjacent to the awarded SPA, which would provide complete coverage of the play fairway.

During the quarter, the Company continued to search for a suitable rig for drilling the Bazartete Prospect in JPDA 06-103 and seeks to confirm various matters related to its tenure under the existing treaty regime between Australia and Timor Leste.

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)

During the reporting period:

· The Cambay Field produced 847 barrels of oil (381 barrels net to Oilex).

· The Operating Committee approved the Cambay Work Programme and Budget which was submitted to the Management Committee for review and approval.

· Work commenced on a programme of three well workovers using a rig assigned from Joint Venture partner, Gujarat State Petroleum Corporation (GSPC).

Subsequent to the reporting period:

· The Government regulators have approved the Cambay Work Programme and Budget to the end of March 2014.

· The Company completed the three-well workover programme at Cambay.

· The Company signed a Gas Sales Agreement with a publicly-listed Indian company for sales of off-spec gas 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 one kilometre 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.

BHANDUT FIELD, Gujarat, India

(Oilex: Operator and 40% interest)

· Oilex is continuing to investigate commercial options to realise value from this asset with its Joint Venture partner, GSPC.

SABARMATI FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· The Sabarmati Field produced 897 barrels of oil (359 barrels net to Oilex) during the reporting period.

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

During the reporting period:

· Pursuant to the Joint Venture's request, a one-year conditional extension to the Initial Period was received from the 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 Joint Venture became aware that a condition of the Certain Maritime Arrangements in the Timor Sea (CMATS) had lapsed, enabling either Australia or Timor Leste to move to extinguish this Treaty. Based upon legal advice, this change to CMATS may have implications for the Joint Venture's tenure in JPDA 06-103. The Joint Venture is seeking meetings with both governments to clarify the matter.

· 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.

· 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

West Kampar PSC, Central Sumatra, INDONESIA

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

· Oilex continues to pursue a commercial resolution to the Joint Venture dispute in parallel with considering options to enforce its Arbitration Award in Jakarta.

* See note to Asset Schedule

New Opportunities

During the reporting period:

· The Company continued to review and evaluate suitable tight hydrocarbon projects that are consistent with its strategy.

Subsequent to the reporting period:

· The Company announced on 19 April 2013 that it had accepted an offer for Special Prospecting Authority with Acreage Option (SPA/AO) which partially covers the Wallal Graben in the Canning Basin, Western Australia. The total land area covered by SPA-0055 is 11,400 km² (~2,800,000 acres).

· The Company also announced on 19 April 2013 that it had submitted two bids for L12-08 and
L12-09 gazettal blocks which cover the remainder of the Wallal Graben. These competitive bids are currently being evaluated by the Department of Minerals and Petroleum of Western Australia. The total land area covered by the two gazettal blocks is 6,444km² (~1,600,000 acres).

CORPORATE

· At the end of the quarter the Company retained a cash position of A$5.8 million.

· As per the December 2012 quarterly report, the Company has retained the services of a recruitment firm to assist with the identification and evaluation of external and internal candidates for the position of Managing Director.

· Ron Miller has agreed to continue as Managing Director on a temporary basis during the recruitment process. Mr Miller will be remunerated at A$270,000 per annum and this package is effective from 1 April 2013.

· The previously announced appointment of Andy Pfaff as General Manager Operations - India has not proceeded due to personal reasons of Mr Pfaff. Suitable alternative candidates have been identified and an appointment is expected to be made in the current quarter.

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	Managing Director
Bruce McCarthy	Non-Executive Director
Company Secretary
Robert Ierace	Company Secretary & Chief Financial Officer
Capital Structure as at 31 March 2013
Ordinary Shares 354,773,430		Stock Exchange Listing
Listed Options 151,898,380		Australian Stock Exchange Code: OEX
Unlisted Options 26,037,500		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 March 2013

1	Consolidated statement of cash flows
				Current quarter $A'000	Year to date 9 months) $A'000
Cash flows related to operating activities
1.1		Receipts from product sales and related debtors		73	154
1.2		Payments for (a) exploration and evaluation		(481)	(2,897)
		(b) development		-	-
		(c) production		(152)	(441)
		(d) administration (net)		(615)	(1,639)
1.3		Dividends received		-	-
1.4		Interest and other items of a similar nature received		30	70
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		(1,145)	(4,753)
Cash flows related to investing activities
1.8			Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets	- - (2)	- - (51)
1.9			Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets	- - -	- - -
1.10			Loans to other entities	-	(22)
1.11			Loans repaid by other entities	-	-
1.12			Other (provide details if material)	-	-
			Net investing cash flows	(2)	(73)
1.13			Total operating and investing cash flows (carried forward)	(1,147)	(4,826)

		Current quarter $A'000	Year to date (9 months) $A'000
1.13	Total operating and investing cash flows (brought forward)	(1,147)	(4,826)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc	(42)	6,225
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	(42)	6,225
	Net increase (decrease) in cash held	(1,189)	1,399
1.20	Cash at beginning of quarter/year to date	6,971	4,363
1.21	Exchange rate adjustments to item 1.20	(4)	16
1.22	Cash at end of quarter	5,778	5,778

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	106
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	1,650
4.2	Development	-
4.3	Production	175
4.4	Administration	625
	Total	2,450

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	3,611	2,727
5.2	Deposits at call	2,167	4,244
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter (item 1.22)	5,778	6,971

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	354,773,430	354,773,430	Various	-
7.4	Changes during quarter
	(a) Increases through rights issue	-	-	-	-
	(b) Increases through employee performance rights issues	-	-	-	-
	(c) Increases through issues (options exercised)	94,022	94,022	$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)

		151,898,380	151,898,380		$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
		1,000,000	-		$0.15		30/01/2016
		5,000,000	-		$0.25		08/03/2016
		3,000,000	-		$0.25		17/12/2016
		1,000,000	-		$0.25		30/01/2017
	Total	177,935,880	151,898,380
7.8 Issued during quarter		1,000,000	-		$0.15		30/01/2016
		5,000,000	-		$0.25		08/03/2016
		1,000,000	-		$0.25		30/01/2017
7.9	Exercised during quarter	94,022		94,022	$0.15	07/09/2015
7.10	Expired during quarter	-		-	-	-
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.

Sign here: Date: 26 April 2013

Managing Director

Print name: Ron Miller

This information is provided by RNS

The company news service from the London Stock Exchange

END

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RNS metadata

Title: Quarterly Report to Shareholders
Time: 08:00:05
Date: 29 Apr 2013
Category: Miscellaneous
ID: 4279D