Cambay-77H Operations Update

24 March 2014

Oilex Ltd (ASX: OEX, AIM: OEX), provides the following information regarding the Cambay-77H well. Drilling of the 12 ¼ inch hole section reached 1,626.5m MD which is approximately 26.5m above the planned casing point for the 9 5/8 inch casing. While pulling out of hole (POOH) to service a mud pump, the Essar Land Rig #4 (Rig) experienced mechanical issues and is currently on equipment downtime at no cost ($0.00 day rate) to the Cambay Joint Venture.

Some of the required replacement parts have been ordered and are being airfreighted from Houston while others have been locally sourced. This reflects the fastest delivery option for special parts not normally included as onsite spares for drilling rigs. It is anticipated the Rig will be operational within 10 ‑ 12 days.

Synthetic Oil Based Drilling Mud (SOBM) is being circulated to keep the well bore clean and the drill pipe is being rotated on a regular basis. The use of SOBM was highlighted as the appropriate mud system to use in the forensic engineering analysis of Cambay-76H which is 300m offset to Cambay-77H. Contingency plans are in place to ensure that this effort can continue uninterrupted while the rig is being repaired.

Managing Director of Oilex, Ron Miller, said;

"While this is untimely, drilling rigs do experience mechanical issues from time to time. We are working closely with Essar to expedite the return of the Rig to operational status. Excluding the instances of delays associated with rig mechanical issues, the operational activities have been completed in line with the anticipated durations."

Ron Miller

Managing Director

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