Quarterly Report 31 December 2013

Summary

CAMBAY PSC (45% & OPERATOR), ONSHORE GUJARAT, INDIA

· Cambay-77H well critical casing delivered to Cambay site late December 2013.

· Cambay Joint Venture contracted Essar Oilfield Services Limited's LR-4 Rig to drill Cambay-77H.

· Essar LR-4 Rig arrived in India subsequent to the end of the quarter, has cleared customs and is currently being assembled at Cambay site.

· Drilling services finalized with estimated spud date window for Cambay-77H between 22 February and 9 March 2014.

· Oilex receives balance of US$3.8m from Magna Energy Limited for 10% participating interest in Cambay PSC.

· Magna exercises option for additional 5% participating interest in Cambay PSC.

SPA-0055 (100% & OPERATOR) CANNING BASIN, WESTERN AUSTRALIA

· Oilex issues invitations to Tender for the Airborne Gravity and Magnetic surveys.

· Ongoing discussions with Native Title Claimants.

STP-ETP-0106, STP-ETP-0107 (100% & OPERATOR), CANNING BASIN, WESTERN AUSTRALIA

· Successful in its application for gazettal blocks L12-08 and L12-09. The exploration permitsawarded are STP-ETP-0106 for discrete area L12-08 and STP-ETP-0107 for discrete area L12 -09. Including SPA-0055, the combined area totals 17,840km2 (~4,400,000 acres).

JPDA 06-103 PSC (10% & OPERATOR), OFFSHORE TIMOR SEA

· PSC suspended until 15 April 2014 for ANP to complete assessment of the application by the Joint Venture parties to terminate the PSC without penalty because of title issues related to sovereign claims of Timor Leste against Australia.

CORPORATE

· $1.5 million received from second tranche of $3.4 million (gross) placement completed during September 2013.

· £7.5 million equity financing facility secured with Darwin Strategic Limited.

OVERVIEW

The primary focus of Oilex has been around preparation for drilling the Cambay-77H well, including tendering activities for the drilling rig and related services. A contract was awarded to Essar Oilfield Services for the Essar Land Rig 4 ("LR-4") and critical premium casing tubulars were procured and delivered to the Oilex facilities near the Cambay-77H well site. Other contracting and procurement activities continued in support of spudding the well during Q1 2014.

Operations review

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

No Lost Time Incidents were recorded for Oilex personnel or contractors during the quarter.

CAMBAY FIELD, GUJARAT, INDIA

(Oilex: Operator and 45% interest *)

During the reporting period:

· The Cambay Field produced 798 barrels of oil (359 barrels net to Oilex).

· Cambay Joint Venture contracted for the use of Essar Land Rig 4 ("LR-4") to drill Cambay-77H through Essar Oilfield Services and critical casing was delivered to site as planned.

· The Cambay-77H well will evaluate the production potential of the extensive Eocene "tight" Y zone reservoir that extends across the 161km2 Cambay PSC contract area. The well includes a 350 metre lateral section with 8 fracture stimulations to test the deliverability of the Y zone.

· Oilex received US$3.8 million (a US$200,000 deposit was paid at the time of signing) following the sale of a 10% participating interest in the Cambay PSC to Magna Energy Limited ("Magna"). Under the terms of agreement, the funds received are to 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 PSC.

· Unless otherwise mutually agreed, in the event that certain conditions, including the approval of the Government of India ("GOI") having not been satisfied or, where applicable, waived prior to 1 May 2014, the parties have agreed that any initial payments may to the extent practicable be converted to shares in Oilex. 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 EGM held on the 4 October 2013. As at the date hereof no initial payment or any part thereof has been, or is required to be, converted into shares in Oilex.

· Magna exercised its option for an additional 5% participating interest in the Cambay PSC. The 5% participating interest is subject to joint venture pre-emption rights and receipt of GOI approval. Oilex is currently in discussions with Magna over payment of the US$2 million acquisition cost and GOI approval timing.

· Gas Sales Agreement Tenders for Cambay-73 future production were received and evaluated. The evaluation results were presented to the Government for endorsement.

Subsequent to the reporting period:

· The Essar LR-4 Rig to be used to drill Cambay-77H, arrived in India, cleared customs and is currently being assembled at site.

· Drilling services for Cambay-77H were finalised and contractors mobilising to site.

· Anticipated spud date for Cambay-77H between 22 February and 9 March 2014.

· Fracture stimulation and Production testing services for Cambay-77H currently being finalised.

* Following, Magna's election to exercise its option for an additional 5% participating interest, and on receipt of GOI approval and joint venture pre-emption waiver, Oilex's participating interest in the Cambay PSC will be 30%.

BHANDUT FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· Gas Sales Agreement Tenders for Bhandut-3 future production were received and evaluated. The evaluation results were presented to the Government for endorsement.

SABARMATI FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· The Sabarmati Field produced 925 barrels of oil (370 barrels net to Oilex) during the reporting period.

SPA-0055 Wallal Graben, CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Invitations to tender for the Airborne Gravity and Magnetic Survey were issued during the quarter.

· Discussions related to the removal of objections over SPA-0055 continue with Native Title parties.

· Potential farm out process continued during the quarter.

STP-ETP-0106, STP-ETP-0107 CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Oilex announced that it had been successful in its application for contiguous gazettal blocks L12-08 and L12-09. The exploration permits awarded are STP-ETP-0106 for discrete area L12-08 and STP- ETP-0107 for discrete area L12-09.

· The total area for these permits covers 6,444km2 (~1,600,000 acres) and encompasses the remainder of the Wallal Graben in the onshore Canning Basin, Western Australia.

· Oilex now controls acreage covering the entire Wallal Graben, a deep undrilled half graben in one of Australia's premier emerging onshore unconventional basins covering a total area of 17,840 km2 (24,400,000 acres).

· Oilex continues to engage with various Traditional Owner Groups regarding the license areas

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

· Subsequent to the end of the quarter the Autoridade Nacional do Petróleo ("ANP") with prior consent of the Joint Commission for the Joint Petroleum Development Area under the Timor Sea Treaty suspended the expiry date of the PSC from 15 January 2014 to 15 April 2014 for the purpose of completing their assessment and continue discussions with the Joint Venture regarding the status of the PSC. Timor Leste and Australia are engaged in litigation regarding the legal status of the treaty under which the PSC was awarded.

WEST KAMPAR PSC, CENTRAL SUMATRA, INDONESIA

(Oilex: 45% interest and further 22.5% secured*)

· Oilex continues to pursue a commercial resolution to the Joint Venture dispute in parallel with considering options to enforce its Arbitration Award in Jakarta. Subsequent to the end of the quarter Oilex received a good faith payment of US$100,000 as part of these ongoing negotiations.

NEW OPPORTUNITIES

· The Company continued to review and evaluate suitable tight hydrocarbon projects that are consistent with its Indian Ocean Rim strategy and onshore focus. A number of opportunities have been identified and will be pursued at the appropriate time relative to the Company's priority focus on Cambay-77H well.

CORPORATE

· During the quarter Oilex received $1.5 million (before costs) following shareholder approval at an Extraordinary General Meeting ("EGM") for tranche two of a placement to domestic and international Sophisticated and Professional Investors ("Placement"). The Placement was priced at $0.05 per share plus a one for two attaching listed option (ASX:OEXO) with a strike price of $0.15 expiring on 7 September 2015.

· Shareholders also ratified the issue of 38 million tranche 1 shares at the EGM.

· Proceeds raised from the Placement will be used for:

o costs associated with the Cambay Tight Hydrocarbon Project,

o initial funding of activities in the Canning Basin Assets and;

o working capital purposes including New Ventures opportunity screening.

· Oilex secured a £7.5 million, three year Equity Financing Facility with Darwin Strategic Limited. Use of the facility is at Oilex's sole discretion.

· At the end of the quarter the Company retained cash resources of A$7.2 million.

· Mr Sundeep Bhandari (a non-executive director) 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 COO during the quarter. India Hydrocarbons Ltd ("IHL"), for which Mr Sundeep Bhandari is a principal consultant, will be paid an additional US$15,000 per month plus taxes on an interim basis and 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.

The Company's website www.oilex.com.au is regularly updated with current information.

(1) Oilex Ltd has agreed to sell a 15% participating interest in the Cambay Production Sharing Contract ("PSC") incorporating its Tight Hydrocarbon Project ("Cambay Project") in Gujarat, India to Magna Energy Limited("Magna") for a total payment of US$6 million. The 15% participating interest is subject to Government of India approval.

(2) Oilex (West Kampar) Limited is entitled to have assigned an additional 22.5% to its holding through the exercise of its rights under a Power of Attorney granted by SPE following the failure of SPE to repay funds due. The assignment has been provided to BPMigas (now SKK Migas) but has not yet been approved or rejected. If Oilex is paid the funds due then it will not pursue this assignment.

LIST OF ABBREVIATIONS AND DEFINITIONS

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. The contingent resource estimates in this Presentation have been derived using a probabilistic method.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01, 1/6/10, 17/12/10, 01/05/13.

Name of entity

 Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX.

2 This statement does give a true and fair view of the matters disclosed.

Robert Ierace

CFO & Company Secretary

31 January 2014