29th Jan 2010 07:00
QUARTERLY REPORT TO SHAREHOLDERS 31 DECEMBER 2009
Summary
JPDA 06-103 (Timor Sea)
* Lor©-1 and Lolote-1 wells drilled with no commercial discovery
* Oilex was free carried up to an agreed cap through the two-well campaign
under an earlier farm-out agreement
* Further exploration drilling is planned for 2010 to further evaluate the
Block's potential
WA-388P (North West Shelf, Australia)
* Encouraging initial results from seismic interpretation * Further reprocessing of 3D seismic data in progress * Potential drilling decision in 2010
West Kampar (Indonesia)
* Work program currently on hold. Resolution to the Joint Venture dispute being pursued * Oilex positioned to restart work program promptly
India Operations
* Net oil production of 5,143 barrels for the Quarter * Operations continue to be cash flow positive * Oilex currently re-negotiating Crude Off-take and Sales Agreement
Corporate
* Oilex retained A$19.2 million cash at the end of the Quarter with no corporate debt * A$10.1 million placement completed during the Quarter
* Net operating and investing cash outflows for the six months to December
2009 of $0.1 million * Oilex is seeking to strengthen its asset portfolio and is currently considering a number of potential opportunities.
Overview
During the Quarter, Oilex drilled the first two exploration wells (Lor©-1 andLolotoe-1) in the Timor Sea JPDA 06-103 contract area. Neither well encounteredhydrocarbons in commercial quantities. Oilex was free carried up to an agreedcap through these two wells under a previously announced farm-out agreementwith Japan Energy Corporation.Although the results from these initial wells were disappointing, the JPDA06-103 block remains an attractive offshore oil exploration block with over 20additional prospects identified with the potential to host significant oilreserves. The Block is located near to a number of existing producing fields aswell as Eni's recent Kitan oil discovery. Further exploration drilling isplanned for later in 2010.In Australia, 3D seismic reprocessing and interpretation continued during theQuarter on the WA-388P block, which is located outboard of North West Shelf,Pluto, Wheatstone and Gorgon fields, offshore Western Australia. The initialresults of the seismic interpretation were encouraging and the block couldbecome an emerging exploration asset.
Oilex's investment in West Kampar, Indonesia remains on hold. The Company continues to pursue a resolution to the Joint Venture dispute. Oilex remains well positioned to resume the West Kampar work program including further appraisal of the Pendalian discovery.
During the Quarter, Oilex strengthened its cash position by completing a A$10.1million share placement. At the same time, the Company's Indian operationscontinued to maintain production and generated small positive cash flows. Netcorporate overhead costs continue to be closely monitored. Oilex is seeking tostrengthen its asset portfolio and is currently considering a number ofpotential opportunities.OPERATIONS REVIEWProduction * Total net production from the Cambay, Bhandut and Sabarmati Fields was 5,143 barrels of oil for the Quarter (Oilex share). * Oil production from the Miocene Basal Sand (MBS) in the Cambay Field,
Gujarat (Oilex Operator - 45%) continues to decline from the Cambay-74 and
Cambay-64 wells. * An artificial lift was installed on Cambay-74 in December with the objective of extending the production life of the well.
Exploration and Appraisal
JPDA 06-103, TIMOR SEA (Oilex Operator - 10%)
Figure 1. JPDA 06-103 location with prospects and nearby fields
* The JPDA 06-103 Joint Venture drilled the Lor©-1 and Lolotoe-1 wells. Neither well encountered commercial moveable hydrocarbon zones. * The "Songa Mercur" rig will be demobilised to Singapore after plug and abandonment operations on the Lolotoe-1 well have been completed.
* Under the farm-out agreement entered into between Oilex and Japan Energy E&
P JPDA Pty Ltd, a subsidiary of Japan Energy Corporation, Oilex was carried
for its 10% share of all costs associated with the Lor©-1 and Lolotoe-1
wells (up to an agreed cap). Oilex was also reimbursed for some of its past
expenditures.
* The Lor©-1 and Lolotoe-1 well data is being integrated with existing data
to assess the implications on the regional prospectivity of the southern
part of the JPDA 06-103. * There remain over 20 further prospects in the JPDA 06-103 contract area with the potential to host significant oil reserves. Most of these
prospects are located to the north of the structures drilled by the Lor©-1
and Lolotoe-1 wells and have different geological characteristics to these
prospects - which were the two easternmost prospects identified in the
southern part of the contract area. The contract area is located near to a
number of existing producing oil fields further to the west, as well as Eni's Kitan oil discovery. * The Joint Venture will then decide on locations for further drilling
planned for later in 2010 to evaluate the remaining potential of the Block.
WA-388P, Australia (Oilex Operator - 14%)
* Initial results of seismic interpretation are encouraging with possible
direct hydrocarbon indicators evident.
* Re-processing and interpretation of 3D seismic data continued during the
Quarter. * Preparation of a portfolio of prospects and leads is currently underway with a potential drilling decision in 2010.
West Kampar PSC, Central Sumatra (Oilex - 45% + A Further 22.5% Secured)
* Oilex's investment in this Production Sharing Contract (PSC) is currently
on hold due to the failure of the Operator (PT Sumatera Persada Energi) to
pursue the work program, as well as non-compliance with other operating
obligations.
* Oilex's priorities for this asset remain to:
1. Recover over US$4.1 million owed to Oilex by SPE by enforcement of the
security held (including international arbitration against the operator's
parent company guarantor, PT Asiabumi Petroleo).
2. Ensure the transfer of Operatorship to Oilex or an acceptable third party.
3. Resume the seismic and drilling work program.
4. Obtain approval of BPMigas, the Indonesian regulator, for development of
the Pendalian oil field.
* The arbitration hearing against the operator's parent company guarantor -
PT Asiabumi Petroleo, commenced in Singapore on 25 January 2010 and is
scheduled to be continued on 18 and 19 February 2010.
CAMBAY FIELD, Gujarat, India (Oilex Operator - 45%)
* Oilex has started a farm out process and will consider farm out options for
its existing India assets.
* Exploration and appraisal potential remains untested in the following
areas:
1. OS II Gas - The OS II interval in the eastern part of the block has
untapped gas potential and could underpin a Cambay gas project. The
presence of gas has also been proven in the Miocene, Oligocene and Eocene
by many old wells and Oilex wells drilled last year.
2. Eocene Gas / Condensate - substantial in-place wet gas resources remain in
the Eocene. Technical potential exists to enhance recoveries to commercial
rates if horizontal wells are utilized together with fracture stimulation.
Oilex is considering options to introduce parties with tight gas
experience.
3. Basal EPIV / Deccan - The fractured Deccan basement and Basal EP IV plays
in the western flank remain untested following the decision to terminate
the drilling of Cambay-74 at the shallower MBS zone and to complete the
well as an oil producer.
Block 56, Oman, (Oilex Operator - 25%)
* On behalf of the Joint Venture, Oilex continued to review the options for
Block 56, including potential farm-out.
Corporate
* At the end of the December quarter Oilex had cash at bank of A$19.2 million
and no corporate debt.
* During the Quarter, Oilex completed a placement to raise A$10.1 million to
fund exploration and appraisal activities on its oil and gas assets.
Safety, Health and environment
No lost time incidents were recorded in Oilex's operational areas during the Quarter.
Oilex regularly updates its website at www.oilex.com.au (please note the full report can also be viewed on the Company's website).
For and on behalf of the Board
B. H. McCarthyManaging Director29 January 2010The information in this report has been compiled by the Managing Director ofOilex Ltd, Bruce McCarthy B.Sc. (Hons) PhD (Geology) who has over 30 yearsexperience in petroleum geology. The estimates of hydrocarbons in place werereviewed by Ray Barnes B.Sc. (Hons), the Technical Director of Oilex Ltd whohas over 37 years experience in petroleum geology and is a member of the AAPG.Mr Barnes reviewed this announcement and consents to the inclusion of theestimated hydrocarbons in place in the form and context in which they appear.The resource estimates contained in this report are in accordance with thestandard definitions set out by the Society of Petroleum Engineers, PetroleumResources Management System, 2007. Further information is available at www.spe.org.
Oilex's nominated advisor in relation to the AIM market is RFC Corporate Finance Ltd, contact: Stuart Laing, [email protected]
CORPORATE DETAILS Board of Directors Share Registry Max D.J. Cozijn Non-Executive Security Transfer Registrars Pty Ltd Chairman 770 Canning Highway Bruce McCarthy Managing Director Applecross WA 6153, Australia Ray Barnes Technical Director Telephone: +61 8 9315 2333 Ben Clube Finance Director Facsimile: +61 8 9315 2233 Laxmi Bhandari Non-Executive Director Email: [email protected] Ron MIller Non-Executive Director Capital Structure Stock Exchange Listing Ordinary Shares 222,074,885 Australian Stock Exchange Code: OEX Unlisted Options 29,975,000 AIM Market of London Stock Exchange Code: OEX Unlisted Performance Rights 555,000
LIST OF ABBREVIATIONS AND DEFINITIONS USED HEREIN
Associated Gas Natural gas found in contact with or dissolved in crude oil in the reservoir. It can be further categorized as Gas-Cap Gas or Solution Gas. BOPD Barrels of oil per day MCF/DAY thousand standard cubic feet (of gas) per day MMCF/DAY million standard cubic feet (of gas) per day MMSTBO million stock tank barrels of oil (recoverable) MMSTBOIP million stock tank barrels of oil in place Prospective Those quantities of petroleum which are estimated, as of a Resources given date, to be potentially recoverable from undiscovered accumulations SCF/BBL standard cubic feet (of gas) per barrel (of oil) Bhandut Field PSCCambay / Gujarat / IndiaOilex NL Holdings(India) LimitedSabarmati Field PSCCambay / Gujarat / IndiaOilex NL Holdings(India) LimitedBlock 56 EPSASouth Oman / OmanOilex Oman LimitedWest KamparPSCCentral Sumatra / Sumatra/ IndonesiaPT Sumatera Persada EnergiJPDA 06-103PSCFlamingo / Joint Petroleum Development Area / Timor-Leste & AustraliaOilex(JPDA 06-103) LtdWA-388-P Carnarvon / WA / Australiapermit schedule
PERMIT BASIN / STATE / JOINT VENTURE PARTIES EQUITY % OPERATOR COUNTRY Cambay Cambay / Oilex Ltd 30.0
Field PSC Gujarat / India
Oilex NL Holdings (India) 15.0 Limited Oilex Ltd Gujarat State Petroleum 55.0 Corp. Ltd Bhandut Cambay/ Oilex NL Holdings (India) 40.0 Oilex NL Holdings Field PSC Gujarat/India Limited (India) Limited Gujarat State Petroleum 60.0 Corp. Ltd Sabarmati Cambay/ Oilex NL Holdings (India) 40.0 Oilex NL Holdings Field PSC Gujarat / India Limited (India) Limited Gujarat State Petroleum 60.0 Corp. Ltd
Block 56 South Oman / Oilex Oman Limited 25.0
EPSA Oman GAIL (India) Limited 25.0 Oilex Oman Limited Videocon Oman 56 Limited 25.0 Bharat Petroresources Ltd 12.5 Hindustan Petroleum Corp 12.5 Ltd
West Central Sumatra / Kampar Sumatra/Indonesia Oilex (West Kampar) Limited 67.5 (1) PT Sumatera Persada Energi
PSC PT Sumatera Persada Energi 32.5 JPDA 06- Flamingo / Joint Oilex (JPDA 06-103) Ltd 10.0 103 PSC Petroleum Development Area Japan Energy E&P JPDA Pty 15.0 Timor-Leste & Ltd Oilex (JPDA 06-103) Ltd Australia GSPC (JPDA) Limited 25.0(2) Videocon JPDA 06-103 25.0(2) Limited Bharat Petroresources JPDA 25.0(2) Ltd WA-388-P Carnarvon/WA/ Oilex Ltd 14.0 Australia Gujarat State 14.0 Petroleum Corp Ltd Oilex Ltd Videocon 14.0 Industries Ltd Bharat 14.0 Petroresources Ltd Hindustan 14.0 Petroleum Corp Ltd Sasol 30.0 Petroleum Australia Ltd
1. Oilex is entitled to the assignment of the additional 22.5% to its 45%
holding, through exercise of its rights under a Power of Attorney granted
by SPE following the failure by SPE to repay funds due to Oilex. That
assignment is before BPMigas
2. Pan Pacific Petroleum (JPDA 06-103) has signed conditional farmin deals
with Videocon JPDA 06-103 Limited, Bharat PetroResources JPDA Ltd and GSPC
(JPDA) Ltd to acquire a 15% participating interest in JPDA 06-103.
Listing 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 LTD ABN Quarter ended ("current quarter") 50 078 652 632 31 DECEMBER 2009
Consolidated statement of cash flows
Cash flows related to operating activities Current quarter Year to date
$A'000 (6 months) $A'000 1.1 Receipts from product sales and related 323 786 debtors 1.2 Payments for (a) exploration and (1,162) 781
evaluation (b) development (81) (353) (c) production (135) (313) (d) administration (net) (489) (994)
1.3 Dividends received - - 1.4 Interest and other items of a similar 30 44 nature received 1.5 Interest and other costs of finance - - paid 1.6 Income taxes paid - - 1.7 Other (provide details if material) - - Net Operating Cash Flows (1,514) (49) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - -
(b) equity investments - - (c) other fixed assets (50) (119)
1.9 Proceeds from sale of: (a) prospects - -
(b) equity investments - - (c) other fixed assets 1 29 1.10 Loans to other entities - -
1.11 Loans repaid by other entities 1 29 1.12 Other (provide details if material) - - Net investing cash flows (48) (61)
1.13 Total operating and investing cash (1,562) (110)
flows (carried forward) 1.13 Total operating and investing (1,562) (110)
cash flows (brought forward) Cash flows related to financing activities
1.14 Proceeds from issues of shares, 9,430 9,430 options, etc 1.15 Proceeds from sale of forfeited - - shares 1.16 Proceeds from borrowings (net) - - 1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (provide details if - -
material) Net financing cash flows 9,430 9,430 Net increase (decrease) in cash 7,868 9,320 held
1.20 Cash at beginning of quarter/year 11,413 10,506 to date 1.21 Exchange rate adjustments to item (127) (672) 1.20 1.22 Cash at end of quarter 19,154 19,154
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the relatedentities Current quarter $A'000 1.23 Aggregate amount of payments to the parties 299 included 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 activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 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 N/A
Financing facilities available
Add 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 1,000 4.2 Development 100 Total 1,100Reconciliation of cash
Reconciliation of cash at the end of Current quarter Previous quarter the quarter (as shown in the
consolidated statement of cash flows) $A'000 $A'000 to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 11,944 11,204 5.2 Deposits at call 7,210 209 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter 19,154 11,413 (item 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 Refer to Permit mining tenements Schedule in relinquished, Quarterly Report reduced or lapsed 6.2 Interests in Refer to Permit mining tenements Schedule in acquired or Quarterly Report increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total Number Issue price Amount paid number quoted per security up per security 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 securities 220,074,885 220,074,885 Various - 7.4 Changes during quarter 44,000,000 44,000,000 $0.23 - (a) Increases through - - issues (options exercised) (b) Decreases through returns of capital, buy-backs 7.5 +Convertible debt - - - - securities (description) 7.6 Changes during quarter - - - - (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options Exercise Expiry date price 450,000 - $1.40 31/01/2010 400,000 - $2.00 31/01/2010 4,500,000 - $0.50 31/03/2010 300,000 - $1.75 31/03/2010 350,000 - $1.60 30/04/2010 350,000 - $2.10 30/04/2010 775,000 - $0.90 31/07/2010 500,000 - $2.00 31/10/2010 400,000 - $2.50 31/01/2011 2,500,000 - $2.00 31/03/2011 300,000 - $2.25 31/03/2011 350,000 - $2.70 30/04/2011 900,000 - $1.75 30/06/2011 900,000 - $2.25 30/06/2011 2,000,000 - $0.30 30/06/2011 3,900,000 - $2.00 1/07/2011 3,900,000 - $2.50 1/07/2011 500,000 - $1.57 30/09/2011 300,000 - $2.75 31/03/2012 900,000 - $2.75 30/06/2012 3,250,000 - $0.30 01/07/2014 2,250,000 - $0.30 01/07/2014
Issued and quoted securities at end of current quarter (cont'd)
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price Amount paid per security up per security 2006 Performance Rights 40,000 Tranche 1 expire 1/07/2011 2007 Performance Rights 120,000 Tranche 1 expire 1/07/2012 120,000 Tranche 2 expire 1/07/2012 120,000 Tranche 3 expire 1/07/2012 2008 Performance Rights 84,000 Tranche 1 expire 1/07/2013 35,000 Tranche 2 expire 1/07/2013 36,000 Tranche 3 expire 1/07/2013 7.8 Issued during 2,250,000 - Exercise Expiry Date quarter Price $0.30 1/07/2014 7.9 Exercised during quarter Exercise Expiry Date Price 7.10 Expired during 500,000 - $1.50 31/10/2009 quarter 500,000 - $1.75 31/10/2009 4,2450,000 - $0.80 14/12/2009 500,000 - $1.00 31/12/2009 3,000,000 - $1.50 31/12/2009 7.11 Debentures Nil Nil (totals only) 7.12 Unsecured notes Nil Nil (totals only) 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.
Sign here: Date: 29 January 2010
(Director)Print name: Ben Clube == == == == ==
vendorRelated Shares:
OEX.L