Magna US$3.8M Equity Sale Proceeds received

 

26 November 2013

 

·     Oilex receives balance of US$3.8 million from Magna Energy Limited for 10% interest in Cambay PSC

·     30 day option window commences for purchase of additional 5% interest in Cambay PSC for US$2 million

Oilex Ltd (ASX: OEX, AIM: OEX, Oilex) is pleased to announce that it has today received the balance of US$3.8 million from Magna Energy Ltd "Magna" representing the balance of funds receivable for the sale of a 10% participating interest in the Cambay Production Sharing Contract. The sale is still subject to Government of India approvals.

Magna also has an option to acquire an additional 5% participating interest upon payment of an additional US$2 million.  Magna have 30 days to exercise this option.

The funds received will be applied towards a 45% share of the costs of the upcoming Cambay-77H well.  Cambay-77H will be the second multistage fracture stimulated horizontal well drilled in the Cambay Project and is designed to confirm the applicability of North American technology for development and production of tight hydrocarbon resources in India.

Oilex currently retains a 35% equity interest and operatorship in the Cambay PSC pending Magna exercising its option for an additional 5% equity. Oilex's share of the independently certified Contingent Resource in the Cambay PSC is shown in the table below.

Cambay PSC Contingent Resource Estimate

	Gross Unrisked Contingent Resources			Oilex's Interest	Net Attributable to Oilex			Operator
	1C	2C	3C		1C	2C	3C
Oil (MMbbls)	31	83	179	35%	11	29	63	Oilex
Gas (BCF)	180	495	1,073	35%	63	173	376	Oilex

 

Managing Director of Oilex, Ron Miller, said

"We are pleased to receive the balance of funds for the recent 10% equity sale of the Cambay PSC to Magna Energy Limited. This is an important step forward towards drilling Cambay-77H and additional production from the Cambay PSC. It demonstrates external confidence in the asset and we look forward to working with Magna to realise Cambay's full potential. Oilex will retain no less than 30% equity in the Cambay PSC, should Magna exercise its option and that equates to approximately 50 million boe independently assessed 2C Contingent Resource of which 50% are liquid hydrocarbons and 50% is natural gas."

 

For further information, please contact:

Oilex Ltd Ron Miller, Managing Director Email: [email protected] Tel: +61 8 9485 3200 Australia

RFC Ambrian  Limited Nominated Adviser and AIM Broker Samantha Harrison    Email:  [email protected] Tel: +44 203 440 6800 UK

Tavistock Communications Conrad Harrington Email: [email protected] Tel:   +44 207 920 3150 UK

 

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.

 

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
TCF	Trillion Cubic Feet
BBO	Billion standard barrels of oil or condensate
BCF	Billion Cubic Feet of gas at standard temperature and pressure conditions
Bbls	Barrels of oil or condensate
BOPD	Barrels of oil per day
BS&W	Base, sediment and water contaminants in oil
BOE	Barrels of Oil Equivalent. Converting gas volumes to the oil equivalent is customarily done on the basis of the nominal heating content or calorific value of the fuel.  Common industry gas conversion factors usually range between 1 barrel of oil equivalent (BOE) = 5,600 standard cubic feet (scf) of gas to 1 BOE = 6,000 scf.
MMBtu	Million British Thermal Units
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.