Quarterly Report 31 December 2013 | RNS | Ticker

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Quarterly Report 31 December 2013

RNS Announcement

RNS Number : 9462Y

Oilex Ltd

31 January 2014

Summary

CAMBAY PSC (45% & OPERATOR), ONSHORE GUJARAT, INDIA

· Cambay-77H well critical casing delivered to Cambay site late December 2013.

· Cambay Joint Venture contracted Essar Oilfield Services Limited's LR-4 Rig to drill Cambay-77H.

· Essar LR-4 Rig arrived in India subsequent to the end of the quarter, has cleared customs and is currently being assembled at Cambay site.

· Drilling services finalized with estimated spud date window for Cambay-77H between 22 February and 9 March 2014.

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

· Magna exercises option for additional 5% participating interest in Cambay PSC.

SPA-0055 (100% & OPERATOR) CANNING BASIN, WESTERN AUSTRALIA

· Oilex issues invitations to Tender for the Airborne Gravity and Magnetic surveys.

· Ongoing discussions with Native Title Claimants.

STP-ETP-0106, STP-ETP-0107 (100% & OPERATOR), CANNING BASIN, WESTERN AUSTRALIA

· Successful in its application for gazettal blocks L12-08 and L12-09. The exploration permits
awarded are STP-ETP-0106 for discrete area L12-08 and STP-ETP-0107 for discrete area L12 -09. Including SPA-0055, the combined area totals 17,840km2 (~4,400,000 acres).

JPDA 06-103 PSC (10% & OPERATOR), OFFSHORE TIMOR SEA

· PSC suspended until 15 April 2014 for ANP to complete assessment of the application by the Joint Venture parties to terminate the PSC without penalty because of title issues related to sovereign claims of Timor Leste against Australia.

CORPORATE

· $1.5 million received from second tranche of $3.4 million (gross) placement completed during September 2013.

· £7.5 million equity financing facility secured with Darwin Strategic Limited.

OVERVIEW

The primary focus of Oilex has been around preparation for drilling the Cambay-77H well, including tendering activities for the drilling rig and related services. A contract was awarded to Essar Oilfield Services for the Essar Land Rig 4 ("LR-4") and critical premium casing tubulars were procured and delivered to the Oilex facilities near the Cambay-77H well site. Other contracting and procurement activities continued in support of spudding the well during Q1 2014.

Operations review

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

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

CAMBAY FIELD, GUJARAT, INDIA

(Oilex: Operator and 45% interest *)

During the reporting period:

· The Cambay Field produced 798 barrels of oil (359 barrels net to Oilex).

· Cambay Joint Venture contracted for the use of Essar Land Rig 4 ("LR-4") to drill Cambay-77H through
Essar Oilfield Services and critical casing was delivered to site as planned.

· The Cambay-77H well will evaluate the production potential of the extensive Eocene "tight" Y zone
reservoir that extends across the 161km² Cambay PSC contract area. The well includes a 350 metre
lateral section with 8 fracture stimulations to test the deliverability of the Y zone.

· Oilex received US$3.8 million (a US$200,000 deposit was paid at the time of signing) following the sale
of a 10% participating interest in the Cambay PSC to Magna Energy Limited ("Magna"). Under the
terms of agreement, the funds received are to be applied towards the proportion of the cost to drill the
Cambay-77H horizontal well that relates to Oilex's current 45% participating interest in the PSC.

· Unless otherwise mutually agreed, in the event that certain conditions, including the approval of the
Government of India ("GOI") having not been satisfied or, where applicable, waived prior to 1 May 2014,
the parties have agreed that any initial payments may to the extent practicable be converted to shares
in Oilex. The issue of shares will be limited to 19.9% of the enlarged Issued Capital at that time with any
balance of the investment not satisfied in shares repayable in cash, as approved by shareholders at
the EGM held on the 4 October 2013. As at the date hereof no initial payment or any part thereof has
been, or is required to be, converted into shares in Oilex.

· Magna exercised its option for an additional 5% participating interest in the Cambay PSC. The 5%
participating interest is subject to joint venture pre-emption rights and receipt of GOI approval. Oilex is
currently in discussions with Magna over payment of the US$2 million acquisition cost and GOI
approval timing.

· Gas Sales Agreement Tenders for Cambay-73 future production were received and evaluated. The
evaluation results were presented to the Government for endorsement.

Subsequent to the reporting period:

· The Essar LR-4 Rig to be used to drill Cambay-77H, arrived in India, cleared customs and is currently
being assembled at site.

· Drilling services for Cambay-77H were finalised and contractors mobilising to site.

· Anticipated spud date for Cambay-77H between 22 February and 9 March 2014.

· Fracture stimulation and Production testing services for Cambay-77H currently being finalised.

* Following, Magna's election to exercise its option for an additional 5% participating interest, and on receipt of GOI approval and joint venture pre-emption waiver, Oilex's participating interest in the Cambay PSC will be 30%.

BHANDUT FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· Gas Sales Agreement Tenders for Bhandut-3 future production were received and evaluated. The
evaluation results were presented to the Government for endorsement.

SABARMATI FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· The Sabarmati Field produced 925 barrels of oil (370 barrels net to Oilex) during the reporting period.

SPA-0055 Wallal Graben, CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Invitations to tender for the Airborne Gravity and Magnetic Survey were issued during the quarter.

· Discussions related to the removal of objections over SPA-0055 continue with Native Title parties.

· Potential farm out process continued during the quarter.

STP-ETP-0106, STP-ETP-0107 CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Oilex announced that it had been successful in its application for contiguous gazettal blocks L12-08
and L12-09. The exploration permits awarded are STP-ETP-0106 for discrete area L12-08 and STP-
ETP-0107 for discrete area L12-09.

· The total area for these permits covers 6,444km² (~1,600,000 acres) and encompasses the remainder
of the Wallal Graben in the onshore Canning Basin, Western Australia.

· Oilex now controls acreage covering the entire Wallal Graben, a deep undrilled half graben in one of
Australia's premier emerging onshore unconventional basins covering a total area of 17,840 km² (24,400,000 acres).

· Oilex continues to engage with various Traditional Owner Groups regarding the license areas

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

· Subsequent to the end of the quarter the Autoridade Nacional do Petróleo ("ANP") with prior consent of
the Joint Commission for the Joint Petroleum Development Area under the Timor Sea Treaty
suspended the expiry date of the PSC from 15 January 2014 to 15 April 2014 for the purpose of
completing their assessment and continue discussions with the Joint Venture regarding the status of
the PSC. Timor Leste and Australia are engaged in litigation regarding the legal status of the treaty
under which the PSC was awarded.

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. Subsequent to the end of the quarter
Oilex received a good faith payment of US$100,000 as part of these ongoing negotiations.

NEW OPPORTUNITIES

· The Company continued to review and evaluate suitable tight hydrocarbon projects that are consistent
with its Indian Ocean Rim strategy and onshore focus. A number of opportunities have been identified
and will be pursued at the appropriate time relative to the Company's priority focus on Cambay-77H
well.

CORPORATE

· During the quarter Oilex received $1.5 million (before costs) following shareholder approval at an
Extraordinary General Meeting ("EGM") for tranche two of a placement to domestic and international
Sophisticated and Professional Investors ("Placement"). The Placement was priced at $0.05 per
share plus a one for two attaching listed option (ASX:OEXO) with a strike price of $0.15 expiring on 7
September 2015.

· Shareholders also ratified the issue of 38 million tranche 1 shares at the EGM.

· Proceeds raised from the Placement will be used for:

o costs associated with the Cambay Tight Hydrocarbon Project,

o initial funding of activities in the Canning Basin Assets and;

o working capital purposes including New Ventures opportunity screening.

· Oilex secured a £7.5 million, three year Equity Financing Facility with Darwin Strategic Limited. Use of
the facility is at Oilex's sole discretion.

· At the end of the quarter the Company retained cash resources of A$7.2 million.

· Mr Sundeep Bhandari (a non-executive director) has taken on a more active role in India and is
assisting in strategy, commercial and joint venture related issues following the departure of Oilex's
COO during the quarter. India Hydrocarbons Ltd ("IHL"), for which Mr Sundeep Bhandari is a principal
consultant, will be paid an additional US$15,000 per month plus taxes on an interim basis and it is also
proposed that IHL (or their nominee) will also be awarded 4 million options with a 15 cent exercise price
and 5 year maturity, 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		Managing Director
Bruce McCarthy		Non-Executive Director
Company Secretary
Robert Ierace		Company Secretary & Chief Financial Officer
Capital Structure as at 31 December 2013
Ordinary Shares 422,779,299				Stock Exchange Listing
Listed Options 185,892,511				Australian Stock Exchange Code: OEX
Unlisted Options 33,462,500				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⁽¹⁾	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 ⁽²⁾	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
SPA-0055	Canning		Admiral Oil NL		100.0	Admiral Oil NL
STP-ETP-0106	Canning		Admiral Oil and Gas (106) Pty Ltd		100.0	Admiral Oil and Gas (106) Pty Ltd
STP-ETP-0107	Canning		Admiral Oil and Gas (107) Pty Ltd		100.0	Admiral Oil and Gas (107) Pty Ltd

(1) Oilex Ltd has agreed to sell a 15% participating interest in the Cambay Production Sharing Contract ("PSC") incorporating its Tight Hydrocarbon Project ("Cambay Project") in Gujarat, India to Magna Energy Limited("Magna") for a total payment of US$6 million. The 15% participating interest is subject to Government of India approval.

(2) 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 SKK 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
PSC	Production Sharing Contract
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

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

Tavistock Communications

Conrad Harrington

Email: [email protected]

Tel: +44 207 920 3150

Qualified Petroleum Reserves and Resources Evaluator statement

Pursuant to the requirements of Chapter 5 of the ASX Listing Rules, the information in this report relating to petroleum reserves and resources is based on and fairly represents information and supporting documentation prepared by or under the supervision of Mr. Peter Bekkers, Chief Geoscientist employed by Oilex Ltd. Mr. Bekkers has over 17 years' experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr. Bekkers meets the requirements of a qualified petroleum reserve and resource evaluator under Chapter 5 of the ASX Listing Rules and consents to the inclusion of this information in this report in the form and context in which it appears. The contingent resource estimates in this Presentation have been derived using a probabilistic method.

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, 01/05/13.

Name of entity

OILEX LTD

ABN		Quarter ended ("current quarter")
50 078 652 632		31 December 2013

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		37	87
1.2		Payments for (a) exploration and evaluation		(997)	(2,394)
		(b) development		-	-
		(c) production		(140)	(177)
		(d) administration (net)		(714)	(1,568)
1.3		Dividends received		-	-
1.4		Interest and other items of a similar nature received		14	21
1.5		Interest and other costs of finance paid		-	-
1.6		Income taxes paid		-	-
1.7		Other (provide details if material)		198	200
		Net Operating Cash Flows		(1,602)	(3,831)
Cash flows related to investing activities
1.8			Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets	- - (31)	- - (44)
1.9			Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets	4,053 - -	4,272 - -
1.10			Loans to other entities	-	33
1.11			Loans repaid by other entities	-	-
1.12			Other (provide details if material)	-	-
			Net investing cash flows	4,022	4,261
1.13			Total operating and investing cash flows (carried forward)	2,420	430

		Current quarter $A'000	Year to date (6 months) $A'000
1.13	Total operating and investing cash flows (brought forward)	2,420	430
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc	1,334	3,037
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	1,334	3,037
	Net increase (decrease) in cash held	3,754	3,467
1.20	Cash at beginning of quarter/year to date	3,310	3,599
1.21	Exchange rate adjustments to item 1.20	121	119
1.22	Cash at end of quarter	7,185	7,185

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	128
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	2,400
4.2	Development	-
4.3	Production	120
4.4	Administration	720
	Total	3,240

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	2,593	3,171
5.2	Deposits at call	4,592	139
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter (item 1.22)	7,185	3,310

6	Changes in interests in mining tenements and petroleum tenements
		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed		Refer to Permit/Asset Schedule in Quarterly Report
6.2	Interests in mining tenements and petroleum 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	422,779,299	422,779,299	Various	-
7.4	Changes during quarter
	(a) Increases through rights issue or placement	30,000,000	30,000,000	$0.05	-
	(b) Increases through employee performance rights issues	-	-	-	-
	(c) Increases through issues (options exercised)	800	800	$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)

		185,892,511	185,892,511		$0.15	07/09/2015

		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
		750,000	-		$0.15	27/06/2016
		2,000,000	-		$0.15	04/11/2016
		2,000,000	-		$0.15	11/11/2016
		3,000,000	-		$0.15	05/12/2016
		1,000,000	-		$0.25	30/01/2017
		750,000	-		$0.25	27/06/2017
		2,000,000	-		$0.25	11/11/2017

	Total	219,355,011	185,892,511
7.8 Issued during quarter		34,000,000 2,000,000 2,000,000 2,000,000 3,000,000	34,000,000 - - - -		$0.15 $0.15 $0.15 $0.25 $0.15	07/09/2015 04/11/2016 11/11/2016 11/11/2017 05/12/2016
7.8 Issued during quarter
7.9	Exercised during quarter	800		800	$0.15	07/09/2015
7.10	Expired during quarter	3,000,000		-	$0.25	17/12/2016
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.

Robert Ierace

CFO & Company Secretary

31 January 2014

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 31 December 2013
Time: 07:00:05
Date: 31 Jan 2014
Category: Miscellaneous
ID: 9462Y