27th Jul 2006 07:00
OILEX NL Level 3, 50 Kings Park Road, West Perth WA 6005 Telephone: +61 8 9226 5577 Facsimile: +61 8 9226 2108 E-mail: [email protected] Web Site: www.oilex.com.au NOTE TO VIEW THIS RELEASE WITH ALL DIAGRAMS & TABLES PROPERLY FORMATTED PLEASE VISIT OUR WEBSITE AT www.oilex.com.au HIGHLIGHTS * Oilex successful in raising A$20 million to fund exploration and appraisal programmes in India, Australia and Oman, subject to shareholder approval at a general meeting called for 28 July in Perth. * Cambay resource assessment upgraded to a range of 16 - 108 million barrels (43 million barrels best estimate) gross oil originally in place and 105 - 432 billion cubic feet gross gas originally in place for Cambay OS II and EP IV potential reservoir units. * Rig contracted for drilling programme of 2 wells on Cambay Field planned to commence early August 2006. * Oilex (25% and Operator) and Indian joint venture comprising Videocon, GAIL, Bharat Petroleum and HPC signed Exploration and Production Sharing Agreement for Block 56 in Oman. * Acquisition of 2D seismic survey in EPP 27 offshore Otway Basin, South Australia was completed on 19 July. * 1,141 barrels of oil were produced from Rookwood South-1 in the quarter under long term production test and sold to Inland Oil Refinery. CORPORATE Board of Directors Principal & Registered Office DETAILS Max D.J. Cozijn Non-Executive Level 3, 50 Kings Park Road Chairman West Perth WA 6005, Australia Bruce McCarthy Managing Director Telephone: +61 8 9226 5577 Ray Barnes Technical Director Facsimile: +61 8 9226 2108 Geoffrey Johnson Non-Executive Director Email: [email protected] Capital Structure Website: www.oilex.com.au Ordinary Shares 50,014,319 Share Registry Unlisted Options 21,030,534 Security Transfer Registrars Pty Ltd Stock Exchange Listing 770 Canning Highway Australian Stock Exchange Applecross WA 6153, Australia ASX Code: OEX Telephone: +61 8 9315 2333 AIM Code: OEX Facsimile: +61 8 9315 2233 Email: [email protected] OPERATIONS REVIEW Oilex takes OILEX ASSUMES ROLE OF OPERATOR CAMBAY FIELD (45% INTEREST) over as Operator of Oilex completed the transfer of operatorship for the Cambay Cambay Field, Field, onshore Gujarat, taking over from Niko Resources Ltd, Gujarat, India effective from 1 June 2006 and is responsible for all operations, including production, in the Cambay block. Operations personnel are based out of new offices in Vadodara (Baroda) which is near to the Cambay Field. As a consequence of the transfer of operatorship for Cambay Field and the pending transfer of operatorship for Bhandut and Sabarmati Fields, six former employees of Niko and the contract field maintenance and security staff have joined Oilex. The total complement of employees of the company in India is now 12, led by Rich Paces, Country Manager and Chief Operating Officer based in New Delhi and Tony Beckett, General Manager - Operations based in Vadodara. Earlier this year, Oilex acquired a 45% participating interest in the Cambay Production Sharing Contract, 20% of which is being earned by farmin and 25% by purchase from Niko Resources Ltd, 15% of which remains subject to the approval of the Government of India. Oilex is acting as Operator of the Sabarmati and Bhandut Fields under an agreement with Niko and the formal transfer will take place when the approval of the Government is received for the purchase of the Niko interests. Dalma Energy PHASE 1 Drilling Programme - cambay field MR-1 rig contracted for The Cambay Joint Venture has agreed to take on assignment from 2-3 wellsto be Gujarat State Petroleum Corporation Ltd (GSPC), two slots on thedrilled in Dalma Energy MR-1 drilling rig and associated services. A third Phase 1 slot will be confirmed for a contingent well after the results programme of the initial wells are known. Oilex has confirmed the first starting early and second firm wells with this rig which will follow the well August that is currently being drilled by GSPC on a nearby permit. The first of the Cambay Field wells is expected to spud in the first week of August, subject to progress on GSPC's well. Oilex has completed construction of three monsoon grade locations in readiness to drill the wells Cambay 71, 72 and 75. As previously advised, on the basis of data analysed from existing wells, two wells have been optimally located to intersect the possible oil leg on the Western High Trend and to acquire modern wireline and formation fluid and pressure information to aid in normalising the existing data base. The data acquired from this programme will be used to calibrate the 3D seismic survey that will be acquired following the monsoon season and to plan the second phase of drilling which could begin as early as October. The wells are expected to take 14 to 21 days to drill to total depth of about 1900 metres. On reaching TD, the wells will be logged and the rig released to the next well. Testing will be carried out subsequently using a smaller workover rig in an effort to minimise cost and rig time with the larger capacity rig. Test results are not anticipated before mid-September 2006. 16-108 million RESOURCE ASSESSMENT - CAMBAY OS II AND EP IV HORIZONS barrels gross range of Additional work has been completed to define with a higher leveloriginal of confidence the characteristics of the reservoir and the fluidoil-in-place composition in potential reservoir units of the Cambay Field. resource at This work has resulted in enhanced volumetric estimates for the Oligocene OS-II oil and gas resource that may be contained in the Oligocene OS and Eocene EP II sandstone and the Eocene EP IV sandstones on both the WesternIV levels. High Trend and the Eastern Flank (see Figure 2). These units are two of the main objective horizons to be tested in the Phase-I drilling programme. No estimates for other potential reservoir units in the Miocene and Oligocene have been completed at this point. The estimates announced in the last quarterly report for the Oligocene OS II resource were only for the Western High Trend. Accounting for the possible presence of oil and /or gas on the Eastern Flank and the Western High Trend, the best revised estimate of potential resource original volume in place has now increased by 48% from 29 to 43 million barrels of oil initially in place ("mmstboiip") and by 409% from 34 to 173 billion cubic feet of gas initially in place ("bcfgiip"). The range of volumes for the potential oil resource is now 16 to 108 mmstboiip and the range of volumes for the potential gas resource is now 77 to 432 bcfgiip. Approximately 6,000 barrels of oil and 52 billion cubic feet of gas have been produced from Cambay Field since inception. RESOURCE ORIGINAL VOLUME-IN-PLACE Low Estimate Best Estimate High Estimate OIL (million stock tank barrels) 16 43 108 GAS (billion cubic feet) 77 173 432 CONDENSATE (million stock tank barrels) 1.6 3.7 9.8 Table 1 - Estimates of the potential hydrocarbons originally in place (100% basis) calculated for the Western High Trend and Eastern Flank at the stratigraphic level OS II and EP IV sandstones. First 2 wells in phase 1 drilling programme located on Western High Trend Figure 2 Top Eocene EP IV depth map and phase 1 well locations. OMAN BLOCK 56, onshore southern Oman (Oilex 25% and Operator) Oilex The Joint Venture led by Oilex signed the Exploration and (Operator) Production Sharing Agreement ("EPSA") with the Government of the and Indian JV Sultanate of Oman for Block 56 on 28 June in Muscat in the parties presence of His Excellency Dr. Mohammed bin Hamed Al-Rumhy, signed the Minister of Oil & Gas, Sultanate of Oman, other Government EPSA for dignitaries and senior officials of the Ministry of Oil & Gas. block 56. Block 56 was the consortium's first choice block of those on offer in the bid round that closed on 1 January 2006. The block is located onshore, adjacent to producing fields operated by PDO, the Oman national oil company, in the South Oman Salt Basin, which is one of the main producing basins in Oman (Figure 3). The recognition of 20 structural leads and the possible presence of a thicker sedimentary section in the eastern area implying a more extensive distribution of the Ara Salt play across Block 56 raises the possibility of salt related structures similar to those producing to the west in the main salt basin and justified a comprehensive work program that has been agreed under the EPSA. The work programme will commence with reprocessing of existing seismic data in July. Acquisition of 2D and 3D seismic is planned to commence in last quarter of 2006 depending on availability of seismic contractors. The value of the work programme is estimated to be about US$7.5 million net to Oilex over the initial 3 year term. Drilling is expected to start towards the end of first half 2007. The award completes another element of the company's stated strategy of acquiring high quality exploration acreage in countries around the Indian Ocean rim in joint venture with its Indian joint venture partners. The consortium comprises Oilex (25% and Operator), GAIL India Ltd (25%), Videocon Industries Ltd (25%), Hindustan Petroleum Corporation Ltd (12.5%) and Bharat Petroleum Corporation Ltd (12.5%). Figure 3 - Map of Oman showing location and leads - Block 56 AUSTRALIA EPP 27 OTWAY BASIN, OFFSHORE SOUTH AUSTRALIA (OILEX OPERATOR OFFSHORE earning 20%) 2D seismic A 2D seismic survey named "Christine" commenced on 28 June in thesurvey offshore Otway Basin permit EPP 27 and was completed on 20 July. "Christine" The survey was conducted by M.V. Pacific Titan under management completed by Santos Ltd as part of a group of surveys being conducted for itself and other operators in the general area. During the survey, a total of approximately 1300 line kilometres of data were acquired, extending an existing seismic grid and covering eight leads identified in the southeastern part of the permit The survey is the first phase of the work programme that Oilex, Gujarat State Petroleum Corporation Ltd ("GSPC") and Videocon Industries Ltd ("Videocon") are conducting as part of the farmin agreement signed with Great Artesian Oil & Gas Ltd ("GOG") in February. The purpose is to refine the maps with the new data, determine the leads that may be upgraded to prospects and define optimal drilling locations on those prospects. The processing and interpretation of the data is planned to be complete by October 2006, with the aim of drilling a well at the earliest opportunity thereafter, depending on the availability of a suitable drilling rig. Oilex (Operator), Videocon and GSPC are funding the programme 33.3% each as part of their commitment to earn 20% each in the permit. GOG holds the balance 40% of the equity in the permit. Figure 4 - Outline of Christine seismic survey acquired June - July 06 AUSTRALIA ATP 608P Remainder Block [Oilex 48.125%] ONSHORE No further work has been undertaken. SURAT BASIN, ATP 608P Rookwood Block [Oilex 60.435%] QUEENSLAND No further work has been undertaken. Reservoir pressure continues1,141 barrels to decline at a rate conforming to prediction. 1,141 barrels of of oil were oil were produced to the end of the June quarter, with total produced cumulative oil production since December 2004 of 9,724 barrels toduring the 30 June 2006. All of the oil produced is currently being sold to June quarter Inland Oil Refinery. EROMANGA ATP 805P [Oilex 42.5%] BASIN, QUEENSLAND Donga-3 oil discovery was brought into production on a long term test in February and the test was completed early in the quarter. Results are being evaluated. 601 barrels of oil were produced from Donga-3. ATP 593P [Oilex 76%] No further work undertaken. ATP 574P [Oilex 57.5%] No further work undertaken. ATP 794P (Previously ATP 589P)[Oilex varying interests of 10% to 88%] Coomooroo Exploration Company has commenced work on Part 1 of the permit in accordance with its obligations under a farmin agreement with Victoria Petroleum and Seqoil. Coomooroo is earning 60% interest in return for funding work including seismic acquisition and drilling 3 wells. Barcoo Junction Block [Oilex 88%] No further work undertaken. Barcoo Block [Oilex 40%] Bow Energy has evaluated the eastern part of ATP 794P and considers that there is exploration potential in the Trinidad and Hobson's Gap areas where several large, relatively shallow (~1600 metres) untested four-way closures have been identified. Bow is planning to drill the Banff prospect in August - September 2006. ATP 548P [Oilex 11.35%] No further work was undertaken. ATP 545P [Oilex 45.5%] No further technical work was undertaken. A proposal to relinquish the permit was submitted by the Joint Venture. ATP 677P- Application [Oilex 50%] Nothing to report on progress through Native Title process. PERMITS Refer permit schedule attached hereto for the current permit positions. CORPORATE Oilex raises $20 MILLION PLACEMENT TO FUND EXPLORATION AND DEVELOPMENT $20 million to fund future Oilex has received applications for the placement of 23,600,000exploration and ordinary fully paid shares at $0.85 per share from development institutional investors predominantly from United Kingdom, North America, Asia and Australia to raise approximately A$20 million. The placement is subject to the approval of shareholders which will be sought at the General Meeting convened for 28 July 2006 in Perth. Oilex intends using the funds raised for the following purposes: * the acquisition of an additional 15% interest in Cambay field, and acquire a 40% interest in each of Bhandut and Sabarmati fields in Gujarat State, India, from Niko Resources Ltd; * undertake drilling of up to 3 wells in Cambay Field, and allow for completion costs; * acquire 3D seismic on Cambay Field; * allow for drilling and completion of additional 2 wells on Cambay Field; * acquire 3D seismic on Bhandut and Sabarmati fields; * acquire 2D and 3D seismic on Oman block 56; * acquire 2D seismic on EPP 27 Otway basin; and * provide working capital. Oilex retains a CAPITAL STRUCTURE tight capital structure with At 30 June 2006, Oilex has a total issued capital of 50,014,31950 million ordinary shares. shares on issue In addition there is a total of 21,030,534 unlisted options exercisable at prices of between $0.20 and $1.50 per share as detailed in the Appendix 5B attached. $3.266million Oilex retains cash resources of $3.266 million as at 30 June in cash at 30 2006. ($1.226 million of which is part of the current $20 June million placement to be completed in July.) Oilex regularly updates its website at www.oilex.com.auFor and on behalf of the BoardB. H. McCarthyManaging Director27 July 2006The information in this report has been compiled by the Managing Director ofOilex NL, Bruce McCarthy B.Sc. (Hons), PhD (Geology) who has over 26 yearsexperience in the oil and gas exploration and production industry. Theestimates of hydrocarbons in place were prepared by Paul Robinson B.Sc. (Hons),PhD (Geology), an independent consultant to Oilex NL who has over 25 yearsexperience in petroleum geology and resources estimation and is a member of theAAPG. The estimates were reviewed by Ray Barnes, the Technical Director ofOilex NL who has over 35 years experience in oil and gas exploration andproduction industry and is a member of the AAPG. Dr Robinson and Mr Barnes bothreviewed this announcement and consent to the inclusion of the estimatedhydrocarbons in place in the form and context in which they appear. PERMIT SCHEDULE 30 June 2006 Offshore Australian Permits PERMIT STATE/ PARTIES % OPERATOR COUNTRY HELD EPP 27 South Australia Oilex NL (Note 4) 20.00 Oilex NL Australia Videocon Industries Ltd 20.00 Gujarat State Petroleum 20.00 Corp. Ltd Great Artesian Oil & Gas 40.00 Ltd Onshore Indian PermitsBhandut Field Gujarat**40.00Oilex NLSabarmati Field Gujarat**40.00Oilex NL PERMIT STATE/ PARTIES % OPERATOR COUNTRY HELD Cambay Gujarat Oilex NL Holdings (India) *45.00 Oilex NL Field Ltd (Note 3) India Gujarat State Petroleum 55.00 Corporation Ltd India Oilex NL Holdings (India) Ltd Gujarat State Petroleum 60.00 Corporation Ltd India Oilex NL Holdings (India) Ltd Gujarat State Petroleum 60.00 Corporation Ltd * 15% equity pending approval of the Government of India** Pending approval of the Government of IndiaOther Onshore International Permits PERMIT STATE/ PARTIES % OPERATOR COUNTRY HELD Block 56 Oman Oilex NL 25.00 Oilex NL GAIL (India) Ltd 25.00 Videocon International Ltd 25.00 Hindustan Petroleum 12.50 Corporation Ltd Bharat Petroleum 12.50 Corporation Ltd Onshore Australian PermitsATP 593PSuratOilex NLATP 794P (Note 1)Victoria Petroleum NLRegleigh Icon OilNLSpringfield Icon Oil NLBarcoo Junction Oilex NLBrightspot Icon Oil NLPart 2Victoria Petroleum NLATP 608P SuratRookwoodOilex NLRemainderOilex NL ATP805PSuratBow Energy LtdATP 548P EromangaIOR Exploration Pty LtdATP545PEromangaRoma Petroleum NLATP 677PApplicationEromanga50.00Oilex NL PERMIT BASIN BLOCK PARTIES % OPERATOR NAME HELD ATP 574P Surat Oilex NL (Seqoil Pty 57.50 Victoria Ltd) (Note 2) Petroleum NL Victoria Petroleum 30.00 NL Bow Energy Ltd 12.50 Oilex NL (Seqoil Pty 76.00 Ltd) Victoria Petroleum 24.00 NL Eromanga Barcoo 60.00 Victoria Petroleum NL Oilex NL (Seqoil Pty 40.00 Ltd) Icon Oil NL 60.00 Victoria Petroleum 24.00 NL Oilex NL (Seqoil Pty 16.00 Ltd) Icon Oil NL 60.00 Victoria Petroleum 24.00 NL Oilex NL (Seqoil Pty 16.00 Ltd) Oilex NL 80.00 Oilex NL (Seqoil Pty 8.00 Ltd) Victoria Petroleum 12.00 NL Icon Oil NL 75.00 Victoria Petroleum 15.00 NL Oilex NL (Seqoil Pty 10.00 Ltd) Victoria Petroleum 60.00 NL Oilex NL (Seqoil Pty 40.00 Ltd) Oilex NL (Seqoil Pty 60.435 Ltd) Victoria Petroleum 29.69 NL Private Interests 9.875 Oilex NL (Seqoil Pty 48.125 Ltd) Victoria Petroleum 24.00 NL Bow Energy Ltd 20.00 Private Interests 7.875 Bow Energy Ltd 42.50 Oilex NL (Seqoil Pty 42.50 Ltd) Victoria Petroleum 15.00 NL IOR Exploration Pty 68.65 Ltd Netscald Pty Ltd 20.00 Oilex NL 11.35 Oilex NL 45.50 Roma Petroleum NL 45.00 Private Interests 9.50 Oilex NL Challenge Resources 50.00 Ltd NOTE 1: ATP794P was previously ATP589PNOTE 2: Seqoil Pty Ltd is a wholly owned subsidiary of Oilex NL.NOTE 3: Oilex NL Holdings (India) Ltd is a wholly owned subsidiary of Oilex NL.NOTE 4: Oilex, Gujarat State Petroleum Corporation Ltd and Videocon IndustriesLtd are each earning 20% interest in return for funding 33.33% each of anagreed work program.The following applications were withdrawn during the quarter:ATP 798PApplication55.00Oilex NL PERMIT BASIN PARTIES % OPERATOR HELD ATP 797P Eromanga Oilex NL 55.00 Oilex NL Application Roma Petroleum NL 45.00 Eromanga Oilex NL Roma Petroleum NL 45.00 Rule 5.3 Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.Name of entity Oilex NL ABN Quarter ended ("current quarter") 50 078 652 632 30 June 2006 Consolidated statement of cash flowsCash flows related to operating Current quarter Year to date activities (12 months) $A'000 $A'000 1.1 Receipts from product sales and 173 532 related debtors 1.2 Payments for (a) exploration and (3,414) (6,836) evaluation - - (b) development - - (c) production (534) (1,644) (d) administration 1.3 Dividends received - - 1.4 Interest and other items of a 54 279 similar nature received 1.5 Interest and other costs of finance (137) (137) paid 1.6 Income taxes paid - - 1.7 Other (provide details if material) - - Net Operating Cash Flows (3,858) (7,806) Cash flows related to investing activities 1.8 Payment for purchases of: - (2,337) (a)prospects - - (b)equity investments (61) (387) (c) other fixed assets 1.9 Proceeds from sale of: - - (a)prospects - - (b)equity investments - 26 (c)other fixed assets 1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) - (17) - Bonds Net investing cash flows (61) (2,715) 1.13 Total operating and investing cash (3,919) (10,521) flows (carried forward) 1.13 Total operating and investing cash (3,919) (10,521) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, - - options, etc. 1.15 Proceeds from sale of forfeited - - shares 1.16 Proceeds from borrowings (62) 4,691 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other (provide details if material) (67) (268) - AIM Costs Other (provide details if 1,226 1,226 materials) - Share Applications Net financing cash flows 1,097 5,649 Net increase (decrease) in cash (2,822) (4,872) held 1.20 Cash at beginning of quarter/year 6,088 8,138 to date 1.21 Exchange rate adjustments to item - - 1.20 1.22 Cash at end of quarter 3,266 3,266Payments to directors of the entity and associates of the directorsPayments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included 182 in item 1.2 1.24 Aggregate amount of loans to the parties included in - item 1.10 1.25 Explanation necessary for an understanding of the transactions Non-cash financing and investing activities2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 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 Seqoil Pty Ltd, Oilex NL Holdings (India) Ltd and Oilex India Pvt Ltd are subsidiaries and have been advanced funds to satisfy joint venture acquisition and operating costs. Financing facilities availableAdd notes as necessary for an understanding of the position. Amount available Amount used $A'000 $A'000 3.1 Loan facilities - - 3.2 Credit standby arrangements - -Estimated cash outflows for next quarter $A'000 4.1 Exploration and evaluation 3,500 4.2 Development - Total 3,500Reconciliation of cashReconciliation of cash at the end of the Current quarter Previous quarter quarter (as shown in the consolidated statement of cash flows) to the related $A'000 $A'000 items in the accounts is as follows. 5.1 Cash on hand and at bank 527 465 5.2 Deposits at call 2,739 5,623 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter (item 3,266 6,088 1.22) Changes in interests in mining tenements Tenement Nature of interest Interest Interest reference at at end of (note (2)) beginning quarter of quarter 6.1 Interests in mining - Refer to Permit - - tenements Schedule in Quarterly relinquished, Report reduced or lapsed 6.2 Interests in mining - Refer to Permit - - tenements acquired Schedule in Quarterly or increased Report Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total number Number quoted Issue price Amount paid up per security per security (cents) (cents) 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 50,014,319 50,014,319 Various securities 7.4 Changes - - - - during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs 7.5 +Convertible Nil Nil - debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options 2,200,00 - Exercise Price Expiry Date (description and 500,000 - $0.20 28/02/2008 conversion factor) 3,000,000 - $1.00 31/12/2009 980,534 - $1.50 31/12/2009 2,250,000 - $0.50 07/12/2008 3,250,000 - $0.40 14/12/2008 4,250,000 - $0.50 14/12/2008 1,000,000 - $0.80 14/12/2009 3,600,000 - $0.50 16/02/2009 $0.50 31/03/2010 7.8 Issued during - - - - quarter 7.9 Exercised - - - - during quarter 7.10 Expired - - during quarter 7.11 Debentures Nil Nil (totals only) 7.12 Unsecured Nil Nil notes(totals only) Compliance statement1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Act or other standardsacceptable to ASX.2 This statement does give a true and fair view of the matters disclosed.Sign here: ............................................................ Date:..27 July 2006..........................(Director/Company secretary)Print name: ...........Max DJ Cozijn............................................ = == == == == ENDOILEX NLRelated Shares:
OEX.L