OILEX secures Essar rig for drilling Cambay-77H

2 December 2013

Oilex SECURES ESSAR RIG FOR DRILLING CAMBAY-77H

· Essar Oilfield Services, Rig 4, contracted to be deployed to Cambay-77H site

· Estimated mobilisation is 65 to 75 days with an anticipated well spud in mid Q1, 2014

Oilex Ltd (ASX: OEX, AIM: OEX, Oilex) is pleased to announce that the Cambay Joint Venture has secured the Essar Rig 4 ("Rig 4") for drilling Cambay-77H through Essar Oilfield Services Limited. Rig 4 is one of several rigs proposed as part of the competitive tendering process conducted by Oilex with support from its Joint Venture Partner, GSPC.

Rig 4 is currently located in Dubai and arrangements are being made by Essar to mobilise it to the Cambay-77H site. The estimated mobilisation time is 65 to 75 days with an anticipated well spud in mid Q1, 2014.

Cambay-77H is the second horizontal multi-stage fracture stimulated well in Cambay Field and has been designed with a 350 metre lateral section that will be fracture stimulated in four stages using the "plug and perf" methodology pioneered in North America. Each stage will have two fracture initiation points such that the lateral section of the well will have a total of eight fractures.

The critical 4½ inch casing is on schedule for delivery during December 2013. It is anticipated that modifications to the Cambay-76H well location will commence prior to the end of 2013, allowing the site to be fully prepared before arrival of Rig 4. The Cambay-76H site will eventually be expanded to accommodate an additional three horizontal production wells as part of the contingent work programme. Evaluation of the other tenders for services and equipment is ongoing and these remain off the critical path to spudding the well.

The Cambay-77H well plan requires an extended production test after completion of the fracture stimulations and arrangements are being made to sell off-spec gas with minimum processing. As previously announced, potential gas buyers have submitted Expressions of Interest for purchasing the off-spec gas and competitive bids have just recently been received with commercial evaluations to commence shortly. Dependent upon the production test results, which may last approximately 6 weeks or more, off-spec gas will continue to be sold in addition to associated condensate.

Managing Director Ron Miller said:

Securing a rig for Cambary-77H has been a priority for management and we are delighted to announce that Essar Oilfield Services will be providing Rig 4. We are also very satisfied with the competitive tendering results which are rationalising the costs for Cambay-77H while not compromising recommendations received from independent engineering review of the Cambay-76H well. Rig 4 is an ideal rig for this well and we look forward to its arrival and commencement of drilling operations. Essar is a multinational corporation with annual revenues of approximately US$39 billion and is an experienced Oil & Gas drilling company based in India, owning 12 onshore drilling rigs and 1 MODU for offshore drilling.

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