Cambay and Timor Sea Operations Update

27 June 2012

Cambay and Timor Sea operations Update

Oilex Ltd ("Oilex" ASX: OEX, AIM: OEX) is pleased to provide an update on its Cambay Field project, onshore Gujarat, India and Timor Sea activities.

CAMBAY TIGHT RESERVOIR PROJECT

Following the suspension of the Cambay-76H well, announced on 7 May, 2012, Oilex is formulating the next phase of the work programme on the Cambay Field.

As previously announced, the next stage of work is expected to comprise a well from the Cambay-76H pad to intersect the large stimulated rock volume around the 610 metre well bore at Cambay-76H. It is anticipated that detailed well engineering and design studies will be completed over the coming weeks.

http://www.rns-pdf.londonstockexchange.com/rns/2152G_1-2012-6-26.pdf

Cambay-76H Offset well drilling schematic

Clean up and production testing of the Cambay-73 well recommenced in April 2012 and is continuing. This vertical well was originally drilled and completed in 2008 with a relatively small scale fracture stimulation (86 tonnes proppant versus 1,200 tonnes in the horizontal Cambay-76H well). The well has 10 metres of active perforations in the Y Zone, the same target reservoir in Cambay-76H with similar geological characteristics. Cambay-73 is located about 800 metres south west of Cambay-76H surface location.

Cumulative production of 1,448 barrels of condensate and 50.5 million cubic feet of gas has been recorded from Cambay-73 (since the first short duration test in 2008 to 20 June 2012) confirming a liquids-rich gas composition. The gas rate after 60 days (from the restart of the production test in April 2012) was approximately 380,000 cubic feet per day, with the average gas to liquids ratio being approximately 40 barrels per million cubic feet of gas. During the recent production test period, water production rates have declined significantly as the well has flowed back and a stable flow regime is now established. Wellhead pressure has also stabilised at approximately 600psi.

It is anticipated that the continuing Cambay-73 production test will provide increasingly robust data to support the modelling of the production potential of the Y zone reservoirs. By also incorporating the data obtained to date from Cambay-76H well, these models can be used to reflect the production performance of a horizontal, multi-stage fracture stimulated well.

While this work is ongoing as more data are collected, the Company believes the preliminary results are very encouraging and provides support for the previous production modelling conducted for the Cambay-76H well and the potential commerciality of the Y zone reservoirs.

The participating interests in the Cambay PSC are:

Following seismic acquisition and reprocessing programmes earlier in the year, two potential drilling locations have been identified in the northern portion of the JPDA 06-103 contract areas at the Tutuala and Bazartete prospects.

The Pre-stack Depth Migration (PSDM) process, an advanced seismic processing technique to improve imaging and depth conversion, was applied to the Bazartete structure and confirmed this location as an attractive drilling target.

Oilex estimates that Bazartete has the potential to contain 70.8 million barrels of Mean Prospective Oil Resources (unrisked 100% basis) with a 23% chance of success (net to Oilex: 7.1 million barrels). Although the nearest well drilled, Thornton-1, is interpreted to have intersected a small oil column at a deeper stratigraphic level than the Jurassic Plover formation reservoir target at Bazartete, the key geological risk identified is hydrocarbon charge.

The JPDA 06-103 Joint Venture has selected this prospect for the next drilling campaign, as announced in the Company's Quarterly Report dated 30 April 2012, and investigations are underway to secure a drilling rig to test this exploration prospect later in 2012.

http://www.rns-pdf.londonstockexchange.com/rns/2152G_2-2012-6-26.pdf

Bazartete Prospect - Depth Mapping incorporating PSDM data.

The participating interests in the JPDA 06-103 PSC are:

For further information, please contact:

Information in this report relating to hydrocarbon reserves or resources has been compiled by Mr Ray Barnes B.Sc. (Hons), the Technical Director of Oilex Ltd who has over 38 years' experience in petroleum geology and is a member of the AAPG. Mr Barnes 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 statements 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 USED HEREIN