Cambay-77H Well - Commencement of Frac Stimulation

24 June 2014

· Mobilisation and preparatory operations successfully completed

· Stage 1 fracture stimulation has commenced

· Immediate surface pressure increase observed after first perforation

Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce that fracture stimulation operations have commenced.

Since the previous update on 09 June 2014:

· Interpretation of the cement bond log confirmed excellent cementing of the 4 ½ inch production casing verifying well integrity

· The 10,000psi fracture stimulation tree (frac tree) was installed and pressure tested

· Water storage pit was filled with ~21,000 bbls of water

· All Schlumberger equipment was mobilised, set up and tested at site, necessitating some field repairs

· All initial Coiled Tubing operations were completed including:

o 4½ inch production casing cleaned and gauged

o Correlation of the location for each perforation cluster

o Stage 1 "toe prep" including perforations

During the Stage 1 "toe prep", a pressure increase of approximately 800 psi was detected at surface immediately after the initial Stage 1 perforation, confirming successful access to the reservoir. A steady rise in pressure was observed and, as a precaution, flow-back equipment was rigged up to the frac tree while coil tubing operations continued.

The "micro frac" of ~ 30 bbls of fluid will acquire data related to reservoir properties. The Stage 1 "data frac" of ~ 500 bbls of fluid to assess local geo-mechanical rock properties will be followed by the Stage 1 "main frac" where ~4,100 bbls of frac fluid and ~136 tonnes of proppant will be pumped into the formation.

As previously reported, Cambay-77H intersected the primary reservoir target (Y Zone) on prognosis. A comprehensive suite of logs has been acquired and interpretation confirms the wellbore encountered a significant sequence of hydrocarbon-bearing reservoir similar to Cambay-76H. The Cambay-77H logs also compare favourably to the Cambay-73 vertical well, which produced from the Y zone at ~1MMscfd (plus condensate and is located approximately 1 km from Cambay-77H.

Cambay-77H is offset ~300m from the Cambay-76H horizontal well that underwent a successful multiple staged fracture stimulation programme along its 633m lateral section in 2012. However, this well was suspended before testing due to downhole mechanical problems.

Cambay-77H has a modified completion with cemented 4 ½ inch production casing to minimise risk associated with post-frac milling operations. A shorter lateral section (350m) in Cambay-77H coupled with a conventional "plug and perf" method is expected to facilitate the primary goal of the well - recording hydrocarbon flow information at surface during a production test.

During the fracture stimulation operations, Oilex will inform the market using the following update milestones.

ü Commencement of the Stage 1 fracture stimulation

· Completion of the fracture stimulation programme (consisting of 4 Stages)

· Completion of the plug mill-out operations

Announcements in relation to flow back and production testing will be dictated by the well response to the stimulation programme.

Managing Director of Oilex, Ron Miller, said;

"We are pleased that the first stage fracture stimulation is now underway. As indicated previously, Oilex has taken a cautious approach during rig up and equipment testing to mitigate risks arising after fracture operations start. The immediate pressure increase at surface after the initial perforation is a positive sign. The collection of reservoir property data using the micro fracture technique is important for the evaluation of the well's performance during production testing which remains on track to commence in early August 2014, after a flowback and clean up period."

For and on behalf of Oilex Ltd 

Ron Miller

Managing Director

For further information, please contact:

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. Mr. Bekkers also meets the requirements of a qualified person under the AIM Note for Mining, Oil and Gas Companies and consents to the inclusion of this information in this report in the form and context in which it appears.

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