Cambay-77H Horizontal Production Well Spuds

7 March 2014

· Cambay-77H well drilling operations commenced on 07 March 2014

· Expected to take approximately 30 days to reach total depth

Oilex Ltd (ASX: OEX, AIM: OEX, Oilex) is pleased to announce that Cambay-77H horizontal production well drilling operations commenced on 07 March 2014 with the successful completion of a six (6) hour commissioning period at 1230 hours IST. The rig is currently drilling ahead at 76m Measured Depth (MD). Refer to the attached figures and photograph.

Cambay-77H is located adjacent to the Cambay-76H horizontal well that underwent a successful multiple staged fracture stimulation programme along its 633m lateral section in 2012 but was suspended prior to testing due to downhole mechanical problems. The Cambay-77H well design incorporates all of the key operational and technical learnings that have arisen from a forensic engineering analysis of Cambay-76H by multiple expert parties.

A shorter lateral section (350m) coupled with a conventional "plug and perf" method for fracture stimulation is expected to facilitate the primary goal of the well - recording hydrocarbon flow information at surface during a production test. Oilex intends to inform the market about progress during drilling operations on a milestone basis as indicated below.

· Setting and cementing of the 13 3/8" casing at approximately 615mMD

· Setting and cementing of the 9 5/8" casing at approximately 1,650mMD

· Completion of drilling operations at well TD, approximately 2,357mMD

· Setting and cementing of the 4 ½ " production casing

· Completion of mobilisation of the fracture stimulation spread to site

· Completion of the fracture stimulation programme

· An announcement in relation to flow back and production testing will be dictated by the well response to the stimulation programme

A time gap between setting and cementing the 4 ½ inch production casing and completion of mobilisation of the fracture stimulation spread is anticipated to minimise potential standby charges associated with demobilisation of the drill rig from site.

 Managing Director of Oilex, Ron Miller, said;

"Drilling operations have commenced within the anticipated window and I have the utmost confidence in the Oilex Well Construction Team in India. All procedures and techniques to minimise operational risks for the drilling and completion of Cambay-77H have been reviewed and implemented, although drilling operations are never without risk. We look forward to measuring a sustained hydrocarbon flow test from this well and validating not only our own expectations of this reservoir but numerous third party analyses for the potential resource base of our Cambay asset."

For and on behalf of Oilex Ltd

Ron Miller

Managing Director

TO VIEW THE DIAGRAMS AND PICTURE ATTACHED TO THIS RELEASE - PLEASE REFER TO THE OILEX WEBSITE.

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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 15 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.

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