Interim Financial Accounts 31 December 2013

OILEX LTD

ABN 50078652632

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

For the half-year ended 31 December 2013

CONTENTS

Directors' Report

Auditor's Independence Declaration

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes to the Condensed Consolidated Interim Financial Report

Directors' Declaration

Independent Review Report

DIRECTORS REPORT

The Directors of Oilex Ltd present their report together with the condensed consolidated interim financial report of the Group comprising of Oilex Ltd (the "Company") and its subsidiaries, and the Group's interest in associates and jointly controlled entities for the half-year ended 31 December 2013 and the auditor's review report thereon.

DIRECTORS

The directors of the Company at any time during the interim period and until the date of this report are detailed below. All directors were in office for this entire period unless otherwise stated.

Mr Max Dirk Jan Cozijn Non-Executive Chairman

Mr Sundeep Bhandari Non-Executive Vice Chairman

Mr Ronald Miller Managing Director

Dr Bruce Henry McCarthy Non-Executive Director

REVIEW OF OPERATIONS

Financial Performance

The Group incurred a consolidated loss after income tax of $2,776,134 for the half-year (31 December 2012: loss of $2,486,917). Revenue for the period has increased due to increased production in the Cambay Field. The loss includes $1,058,838 incurred on exploration expenditure (with $671,385 expensed in India) and $1,637,860 incurred on employee and administrative expenditure. The Company's focus on reducing costs, which do not impair its technical and commercial capabilities, is continuing. Cash and cash equivalents held by the Group as at 31 December 2013 totalled $7,184,747 (30 June 2013: cash and cash equivalents $3,598,640), the increase is due to the placement of 68 million shares at $0.05 per share in the half-year ended 31 December 2013 and the receipt of $4.3 million from Magna Energy Limited.

Operations

Oilex Ltd is a dual listed (ASX and AIM) oil and gas exploration and development company. The Company is continuing its transition to an early mover unconventional energy producer, focusing on assets around the Indian Ocean Rim. The Company is evaluating and commercialising the extensive Eocene low permeability ("tight") reservoirs in its onshore Cambay Field located in the state of Gujarat, India, where energy market fundamentals are attractive. The Company is applying leading-edge tight reservoir evaluation, drilling and production technologies and techniques which have been developed in recent years in the rapidly expanding "tight" and shale gas industry in North America. The Company has expanded its unconventional assets in the onshore Canning Basin, Western Australia. The Company also has interests in exploration assets offshore Timor Sea and onshore Sumatra, Indonesia.

The main events for the Company during the period were:

· The successful $3.4 million (before expenses) capital raising.

· The negotiation of a farmout of up to 15% of the Cambay asset with Magna Energy Limited. The farmout comprised US$4 million for a 10% equity share plus an additional option for a further 5% equity share for US$2 million, that Magna Energy Limited exercised prior to the end of the period with payment dependent on certain pre-emptive rights and Government of India approval. Unless otherwise mutually agreed, in the event that certain conditions, including the approval of the Government of India having not been satisfied or, where applicable, waived prior to 1 May 2014, the parties have agreed that any initial payments will to the extent practicable be converted to shares in Oilex Ltd. The issue of shares will be limited to 19.9% of the enlarged issued capital at that time, with any balance of the investment not satisfied in shares repayable in cash, as approved by shareholders at the General Meeting held on 4 October 2013.

· The Cambay Joint Venture securing the Essar Land Rig 4 ("LR-4") for drilling Cambay-77H through Essar Oilfield Services.

· The issue of invitations to tender for the Airborne Gravity and Magnetic surveys in the Canning Basin, Western Australia.

· Continuing negotiations to achieve a commercial resolution to the West Kampar Joint Venture dispute.

· Securing a £7.5 million three year Equity Financing Facility with Darwin Strategic Limited ("Darwin"). Under the terms of the facility, the Company may at its discretion, issue placement shares to Darwin at any time over this term. Any drawdown of the facility and resultant issue of shares on the AIM Market of the London Stock Exchange is limited to the Company's equity placement capacity under ASX Listing Rules 7.1 and 7.1A. The Company issued 3 million unlisted options to Darwin in December 2013.

Further details are contained within releases made by the Company over this period.

Significant Events After Balance Date

The Autoridade Nacional do Petroleo ("ANP") with prior consent of the Joint Commission for the Joint Petroleum Development Area under the Timor Sea Treaty, advised on 15 January 2014 that it had suspended the expiry date of the PSC from 15 January 2014 to 15 April 2014 for the purpose of completing an assessment and to continue discussions with the Joint Venture partners.

In January 2014 the Company Limited received a good faith payment of US$100,000 as part of the ongoing negotiations to pursue a commercial resolution to the Joint Venture dispute with the Operator in the West Kampar PSC. A further US$30,000 was received in February 2014.

On 17 February 2014 Oilex announced the issue of 94.75 million shares at an issue price of $0.072 raising $6.8 million before expenses. The Company allotted 93 million shares on 24 February 2014 raising $6.7 million before expenses. The balance of 1.75 million shares will be allotted to Directors, and paid for upon obtaining shareholder approval.

There are no other significant subsequent events occurring after balance date.

CORPORATE MATTERS

Capital Structure

At 31 December 2013, Oilex Ltd retained cash of $7,184,747.

As at 31 December 2013 the Company had total issued capital of 422,779,299 ordinary shares, as well as 185,892,511 listed options exercisable at $0.15 per share expiring 7 September 2015.

On 28 October 2013, shareholders at the General Meeting ratified the issue of 38 million tranche 1 ordinary shares and approved the issue of an additional 30 million tranche 2 ordinary shares and 34 million listed options. This placement was priced at $0.05 per share with tranche 1 including a one for two attaching listed option, with an exercise price of $0.15 expiring on 7 September 2015. The Company raised $3,394,957 before expenses of $357,765. The issue of the new shares and options during the period increased the number of shares on issue from 354,778,499 to 422,779,299 and the number of listed options from 151,893,311 to 185,892,511.

On 9 August 2013 the Company announced that it had agreed to sell a 10% participating interest (gross) in the Cambay Production Sharing Contract ("PSC") for US$4 million to Magna Energy Limited ("Magna"). Magna also has an option to acquire an additional 5% participating interest (gross) for US$2 million. These payments will include the working interest share of the 2013/14 Cambay work programme and budget and the value of the corresponding share of joint venture assets. Under the terms of the agreement, the funds received would be applied towards the proportion of the cost to drill the Cambay-77H horizontal well that relates to Oilex's current 45% participating interest in the Cambay PSC. Unless otherwise mutually agreed, in the event that certain conditions, including the approval of the Government of India have not been satisfied or, where applicable, waived prior to 1 May 2014, the parties have agreed that any payments made by Magna to the Company, to the extent practicable, be converted into shares in Oilex Ltd. The issue of shares, under the unwind provisions, will be limited to 19.9% of the enlarged issued capital of Oilex Ltd at that time, with any balance of the investment not satisfied in shares repayable in cash. Shareholders approved the unwind provisions at the General Meeting held 4 October 2013. A deposit of two hundred thousand USD was received in the September Quarter, and the balance of the $US4 million consideration was received following Oilex's non-operating joint venture participant, GSPC, not exercising its pre-emptive right.

On 27 December 2013 the Company announced that Magna had exercised its option to acquire an additional 5% participating interest in the Cambay PSC, with payment dependant on certain pre-emptive rights and Government of India approval.

During the half-year ended 31 December 2013, 800 listed $0.15 options were exercised, 75,000 unlisted options expired unexercised and 3 million unlisted options were forfeited. Oilex issued 9 million unlisted options during the period, as well as announcing the issue of 4 million unlisted options to India Hydrocarbons Limited ("IHL") subject to shareholder approval. Mr Sundeep Bhandari is a principal director and shareholder of IHL.

As at 31 December 2013 there were 185,892,511 listed options exercisable at $0.15 and a total of 33,462,500 unlisted options exercisable at prices of between $0.15 and $0.63, full details are shown below.

(1) On 24 December 2013 the Company announced that Mr S Bhandari would be granted, as part of his remuneration, 4,000,000 unlisted options exercisable at 15 cents per share, vesting from date of grant with a five year term, subject to shareholder approval. As this approval had not been sought as at 31 December 2013, these options have not yet been issued or included in the table above.

LEAD AUDITOR'S INDEPENDENCE DECLARATION

The lead auditor's independence declaration is set out on page 4 and forms part of the Directors' Report for the half-year ended31 December 2013.

Signed in accordance with a resolution of the Board of Directors.

Mr R Miller Mr M Cozijn

Managing Director Chairman

Leederville

Western Australia

25 February 2014

KPMG

Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Oilex Ltd

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2013 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

(ii) no contraventions of any applicable code of professional conduct in relation to the review.

KPMG

Brent SteedmanPartner

Perth25 February 2014

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity

Liability limited by a scheme approved under Professional Standards Legislation.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the half-year ended 31 December 2013

The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2013

The above Condensed Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the half-year ended 31 December 2013

(1) Capital raising costs in the prior period included the fair value of listed options granted to the underwriter and sub-underwriter following shareholder approval.

The above Condensed Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the half-year ended 31 December 2013

The above Condensed Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

1. REPORTING ENTITY

Oilex Ltd (the "Company") is a company domiciled in Australia. The condensed consolidated interim financial report of the Company as at and for the half-year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "Group Entities") and the Group's interest in associates and jointly controlled entities. Oilex Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange ("ASX") and on the AIM Market of the London Stock Exchange. The Group is primarily involved in the exploration, evaluation, development and production of hydrocarbons. The Group is a for-profit entity for the purpose of preparing the financial statements.

The consolidated annual financial report of the Group as at and for the year ended 30 June 2013 is available upon request from the Company's registered office at Level One, 660 Newcastle Street, Leederville, Western Australia 6007 or at www.oilex.com.au.

2. BASIS OF PREPARATION

(a) Statement of Compliance

The condensed consolidated interim financial report is a general purpose condensed financial report which has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001, and IAS 34Interim Financial Reporting. The condensed consolidated interim financial report does not include all of the notes and information included in an annual financial report and accordingly this report should be read in conjunction with the consolidated annual financial report of the Group as at and for the year ended 30 June 2013 and any public announcements made by Oilex Ltd during the period ended 31 December 2013.

This condensed consolidated interim financial report was authorised for issue by the Board of Directors on 25 February 2014.

(b) Going Concern

The financial report has been prepared on the going concern basis which contemplates realisation of assets and settlement of liabilities in the normal course of business. The Group has incurred a loss of $2,766,134 during the half-year and as at 31 December 2013, the Group's current assets exceeded current liabilities by $9,269,819 (adding back advances received from farmout - refer Note 8). The Group will continue to manage its expenditure to ensure that it has sufficient cash reserves for the next twelve months. The Group may require funds within the next twelve months in order to meet planned joint venture arrangements for its projects, noting that the timing and amount of these expenditures may be able to be varied as economic circumstances allow although some commitments exist in the medium term. The cash position as at 31 December 2013 was $7.2 million. Subsequent to end of the period an additional $6.8 million gross proceeds have been raised from a placement of 94.75 million shares at $0.072 as announced on 17 February 2014 with 93 million shares having been allotted on 24 February 2014 upon receipt of funds, and the balance subject to shareholder approval.

The Directors believe it is appropriate to prepare the consolidated financial statements on a going concern basis as, and in the opinion of the Directors, the Company has adequate plans in place to meet its minimum administrative, evaluation and development expenditures for at least twelve months from the date of this report.

3. SIGNIFICANT ACCOUNTING POLICIES

Except as disclosed below, the accounting policies applied by Company in this condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 30 June 2013.

The Group has adopted the following new and revised accounting standards that are mandatory for annual periods beginning on or after 1 January 2014. These standards are applicable to the Group from 1 July 2013.

AASB 10 Consolidated Financial Statements introduces a revised definition of control and establishes a single control model that applies to all entities. The new control model broadens the situations when an entity is considered to be controlled by another entity and includes guidance for applying the model.

The adoption of AASB 10 had no material effect on the financial position or the consolidated financial statements of the Group.

AASB 11 Joint Arrangements and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether joint control exists has changed. The Group is now required to classify its interests in joint arrangements as either joint operations or joint ventures taking into consideration the structure of the arrangement. Joint operations give the venturers a right to the underlying assets and obligations of the venture and are accounted for by recognising the Group's share of those assets and obligations. Joint ventures give the venturers a right to the net assets of the venture and are accounted for using the equity method.

The adoption of AASB 11 had no impact on the financial position or the consolidated financial statements of the Group.

AASB 12 Disclosures of Interests in Other Entities prescribes the disclosure requirements for entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. New disclosures have been introduced regarding the judgements made by management to determine whether control exists and to require summarised information about joint arrangements and subsidiaries with non-controlling interests.

The adoption of AASB 12 had no material impact on the accounting policies of the Group.

AASB13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB13 provides a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when fair value is required to be used, but rather provides guidance on how to determine fair value when required or permitted.

The adoption of AASB 13 had no material effect on the financial position or the consolidated financial statements of the Group.

AASB 119 Employee Benefits revises the definition of short-term employee benefits, to benefits that are expected to be settled wholly within twelve months after the end of the annual reporting period in which the employees render the related service.

The adoption of AASB 119 (2011) had no material effect on the financial position or the consolidated financial statements of the Group.

4. ESTIMATES AND JUDGEMENTS

The preparation of an interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed consolidated interim financial report, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report as at and for the year ended 30 June 2013.

 5. OPERATING SEGMENTS

The Group has identified its operating segments based upon the internal management reports that are reviewed and used by the executive management team, including the Managing Director (the Group's chief operating decision maker), in assessing performance and in determining the allocation of resources.

There were no significant inter-segment transactions during the year.

(1) Joint Petroleum Development Area.

(2) Corporate represents a reconciliation of reportable segment revenues, profit or loss and assets to the consolidated figure.

6. REVENUE AND EXPENSES

7. EXPLORATION AND EVALUATION

Exploration and evaluation assets are reviewed at each reporting date to determine whether there is any indication of impairment or reversal of impairment. When a well does not result in the successful discovery of potentially economically recoverable reserves, or if sufficient data exists to indicate the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full, either by development or sale, it is impaired.

In year ended 30 June 2013 the Company recognised an impairment of $3,850,000 relating to the Cambay asset based upon the fair value calculation as at 30 June 2013. The Company also impaired $740,149 in relation to uncertainty of the JPDA-06-103 Production Sharing Contract tenure.

8. ADVANCES RECEIVED FROM FARMOUT

On 9 August the Company announced that it had entered into an agreement to sell up to a 15% participating interest in the Cambay Production Sharing Contract ("PSC") to Magna Energy Limited ("Magna").

Under the terms of the transaction, the Company agreed to sell a 10% participating interest (gross) in the Cambay PSC for US$4 million, ("sale interest"), and an additional 5% participating interest, if Magna exercises an option to acquire an additional 5% participating interest (gross) for US$2 million, ("option interest"). The sale of the Cambay asset was conditional upon a number of conditions, including obtaining a waiver of the pre-emptive rights from GSPC, the Company's non-operating joint venture partner, and the consent of the Government of India.

These payments include the working interest share of $1.9 million of the 2013/14 Cambay work programme and budget, and the value of the corresponding share of joint venture assets. Under the terms of the agreement, the funds received would be applied towards the proportion of the cost to drill the Cambay-77H horizontal well that relates to the Company's current 45% participating interest in the Cambay PSC.

Funds from the 10% sale interest were received during the reporting period, after GSPC advised that it would not be exercising its pre-emptive right over the 10% participating interest. As the transaction cannot be completed until the Government of India advises of the approval or rejection of the potential sale of the Cambay asset, the funds received from Magna have been classified as an advance received from the farmout. Once the Government advises of the approval or rejection, the funds will either be allocated to the sale of the Cambay asset or to the issue of share capital under the unwind provisions. Accordingly Oilex continues to recognise 45% of the Cambay assets and liabilities.

Unless otherwise mutually agreed, in the event certain conditions, including the approval of the Government of India, have not been satisfied or, waived prior to 1 May 2014, the parties have agreed that any payments made by Magna to the Company, to the extent practicable, will be converted into shares in the Company. The issue of shares, under the unwind provisions, will be limited to 19.9% of the enlarged issued capital of the Company at that time, with any balance of the investment not satisfied in shares repayable in cash. Shareholders approved the unwind provisions at the General Meeting held 4 October 2013.

The Notice of Meeting issued 3 September 2013 for this General Meeting, stated that the Company had been granted a waiver of ASX Listing Rule 7.3.2 to the extent necessary to enable it to issue unwind shares to Magna no later than eight months after the date of the Meeting. On 12 September 2013 the Company announced that the waiver, relating to the sale interest, enabled the Company to issue unwind shares up to a value of US$4 million to Magna no later than eight months after the date of the meeting.

Under the terms of the sale agreement, the Company may be required to issue unwind shares up to a value of US$6 million to Magna. Accordingly any unwind share issued in relation to the option interest will not be covered by the ASX waiver and may require shareholder approval.

On 19 December 2013 Magna exercised its option to acquire the 5% participating interest. At present the payment of US$2 million is payable upon Government of India approval. The Company is currently in discussions with Magna regarding the timing of the payment of the US$2 million.

Magna was introduced to the Company by India Hydrocarbons Limited (''IHL"), a related party, who assisted the Company in managing the successful negotiation of the partial sale of its Cambay asset. In recognition of this the Company agreed to the payment of an introduction fee to IHL of 2.5% of the consideration received by the Company, payable upon receipt of funds from Magna. This introduction fee was assessed on normal commercial terms and is at an arm's length basis.

9. SHARE-BASED PAYMENTS

The Company has an established share option program that entitles directors, key management personnel and advisors to purchase shares in the Company. The terms and conditions of the share option program are disclosed in the consolidated financial report as at and for the year ended 30 June 2013. In the half-year ended 31 December 2013 further grants on similar terms were made to key management personnel and financiers and advisors.

The basis of measuring fair value of options is consistent with that disclosed in the consolidated financial report as at and for the year ended 30 June 2013. The terms and conditions of the grants made during the half-year ended 31 December 2013 are as follows:

During the half-year ended 31 December 2013, the following options lapsed unexercised due to service conditions not being met:

Fair value of options granted during the half-year ended 31 December 2013 has been determined using the following assumptions:

The fair value of the options is calculated at the date of grant using the Black-Scholes Model.

As at 31 December 2013 Oilex Ltd had 33,462,500 unlisted options on issue exercisable at prices of between $0.15 and $0.63.

(1) On 29 January 2013 the Company announced that Mr R Miller would be granted, as part of his remuneration, 2,000,000 unlisted options exercisable at 15 cents per share, vesting from date of grant with a three year term, subject to shareholder approval. At a General Meeting held 28 October 2013, shareholders approved the issue of options to Mr Miller. The fair value of these options was originally determined as at 30 June 2013 and was recalculated as at 28 October 2013.

(2) On 24 December 2013 the Company announced that Mr S Bhandari would be granted, as part of his remuneration, 4,000,000 unlisted options exercisable at 15 cents per share, vesting from date of grant with a five year term, subject to shareholder approval. As this approval had not been sought as at 31 December 2013, these options have not yet been issued, but the fair value has been included as share-based payments expense. The fair value of these options was determined as at 31 December 2013 and when shareholder approval is obtained the fair value will be determined at grant date and any adjustment required will be brought to account.

10. ISSUED CAPITAL

On 28 October 2013, shareholders at a general meeting ratified the issue of 38 million tranche 1 ordinary shares and approved the issue of an additional 30 million tranche 2 ordinary shares and 34 million listed options. This placement was priced at $0.05 per share, including a one for two attaching listed option, with an exercise price of $0.15 expiring on 7 September 2015.

All listed options are exercisable at $0.15 per share and expire 7 September 2015.

As at 31 December 2013 there were 33,462,500 unlisted options on issue exercisable at prices of between $0.15 and $0.63.

11. RELATED PARTIES

Arrangements with related parties continue to be in place. For details of these arrangements, refer to the consolidated annual financial report of the Group as at and for the year ended 30 June 2013.

Mr Sundeep Bhandari (non-executive vice chairman) has taken on a more active role in India and is assisting in strategy, commercial and joint venture related issues following the departure of Oilex's Chief Operating Officer in October 2013. India Hydrocarbons Limited ("IHL"), of which Mr Sundeep Bhandari is a principal director and shareholder, will be paid an additional US$15,000 per month on an interim basis. It is also proposed that IHL (or their nominee) will also be awarded 4 million options with a 15 cent exercise price and 5 year maturity, subject to shareholder approval.

In addition, IHL was paid an introduction fee of 2.5% of the consideration received by the Company for managing the successful negotiation of the partial sale of its Cambay asset. This fee was payable on receipt of funds from Magna. This introduction fee was assessed on normal commercial terms and is at an arm's length basis.

During the half-year Mr Ron Miller was granted 2 million unlisted options with a 15 cent exercise price and a 3 year maturity and a further 2 million unlisted options with a 25 cent exercise price and 4 year maturity which were approved by shareholders at the AGM held on 11 November 2013.

On 29 January 2013 the Company announced that Mr Ron Miller would be granted, as part of his remuneration, 2,000,000 unlisted options exercisable at 15 cents per share, vesting from date of grant with a three year term, subject to shareholder approval. At a General Meeting held 28 October 2013, shareholders approved the issue of options to Mr Miller.

12. CHANGE IN THE COMPOSITION OF THE GROUP

Since the last annual reporting date, there have been no significant changes in the composition of the Group.

13. EXPENDITURE COMMITMENTS

Exploration and Evaluation Expenditure Commitments

In order to maintain rights of tenure to exploration permits, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various state and national governments. These obligations are subject to renegotiation when application for an exploration permit is made and at other times. These obligations are not provided for in the financial report. The Group's share of the expenditure commitments are currently estimated to be payable as follows:

When obligations expire, are re-negotiated or cease to be contractually or practically enforceable, they are no longer considered to be a commitment.

Further expenditure commitments for subsequent permit periods are contingent upon future exploration results. These cannot be estimated and are subject to renegotiation upon expiry of the exploration leases.

Exploration and Evaluation Contractual Commitments

The Company entered into a contract for drilling and related services in December 2013 for $774,475 (year ended June 2013: Nil).

14. SUBSEQUENT EVENTS

The Autoridade Nacional do Petroleo ("ANP") with prior consent of the Joint Commission for the Joint Petroleum Development Area under the Timor Sea Treaty, advised on 15 January 2014 that it had suspended the expiry date of the PSC from 15 January 2014 to 15 April 2014 for the purpose of completing an assessment and to continue discussions with the Joint Venture partners.

The Group has received good faith payments of US$130,000 as part of the ongoing negotiations to pursue a commercial resolution to the Joint Venture dispute with the Operator in the West Kampar PSC, additional funds are anticipated pending resolution of this matter.

On 17 February 2014 Oilex announced the issue of 94.75 million shares at an issue price of $0.072 raising $6.8 million before expenses. On 24 February 93 million shares were allotted upon receipt of $6.7 million before expenses, the balance of 1.75 million shares will be allotted to Directors, and paid for upon obtaining shareholder approval.

There are no other significant subsequent events occurring after balance date.

DIRECTORS DECLARATION

In the opinion of the Directors of Oilex Ltd (the "Company"):

1. the condensed consolidated financial statements and notes set out on pages 5 to 16, are in accordance with the Corporations Act 2001 including:

a) giving a true and fair view of the Group's financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Mr R Miller Mr M Cozijn

Managing Director Chairman

Leederville,

Western Australia

25 February 2014

KPMG

Independent auditor's review report to the members of Oilex Ltd

Report on the financial report

We have reviewed the accompanying interim financial report of Oilex Ltd, which comprises the condensed consolidated statement of financial position as at 31 December 2013, condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, notes 1 to 14 comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the Group comprising the company and the entities it controlled at the half-year's end or from time to time during the half-year.

Directors' responsibility for the interim financial report

The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group's financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Oilex Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Oilex Ltd is not in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the Group's financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

(b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

KPMG

Brent SteedmanPartner

Perth25 February 2014

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity

Liability limited by a scheme approved under Professional Standards Legislation