Quarterly Report to Shareholders 31 December 2012

QUARTERLY REPORT TO SHAREHOLDERS

31 DECEMBER 2012

Summary

Cambay PSC (45% & Operator) onshore Gujarat, India

·; Insights from the independent review of Cambay-76H have been incorporated into a work programme and development planning activities while work continues on the approval processes.

·; Potential gas buyers for Cambay-73 gas identified and approached as part of the preparation for restarting production.

JPDA 06-103 PSC (10% & Operator) offshore Timor Sea

·; The Bazartete Prospect, previously agreed by the Joint Venture to be the third commitment well, is assessed by Oilex to have mean prospective oil resources of approximately 70 million barrels (unrisked, 100% basis) with a 23% chance of success.

·; The Joint Venture has received a 1-year conditional extension of the Initial Period from the regulatory authority.

New Opportunities

The Company continues to review and evaluate suitable tight hydrocarbon projects that are consistent with its strategy and focus on delivering energy to India.

CORPORATE

·; Changes to the Board and executive management previously foreshadowed were implemented as below:

o Dr. Bruce McCarthy stepped down as Managing Director to become a Non-Executive Director

o Ron Miller was appointed Acting Managing Director based in Perth, Australia

o Robert Ierace was appointed as Chief Financial Officer and Company Secretary, commencing 30 January 2013

o Ray Barnes retired from the Board as Technical Director and continues as a consultant

·; Cash position of A$7 million as at 31 December 2012.

Overview

Oilex continues its transition to an early mover unconventional energy producer, focused on projects with significant tight reservoir potential. A number of changes to the board and executive management were implemented during the quarter. The Company continues to pursue further cost reduction measures which do not impair its technical and commercial capabilities.

During the reporting period, recommendations and insights from an independent US expert who reviewed the Cambay-76H well operations were incorporated into a detailed work programme and development plan for the Cambay PSC which has been submitted to the relevant authorities.

Oilex and its Joint Venture Partners have received a conditional extension to the Initial Period for JPDA 06-103 which enables the continued efforts to secure a suitable rig to drill the Bazartete oil prospect as the third commitment well.

OPERATIONS REVIEW

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

CAMBAY FIELD, Gujarat, India

·; The Cambay Field produced 704 barrels of oil (317 barrels net to Oilex) during the reporting period.

·; A comprehensive forward plan for development of the Cambay Field, including a five-year outlook, was completed. This incorporated the recommendations of the independent review of Cambay-76H well operations.

·; During the reporting period, the Company has completed the detailed Work Programme and Budget for Operating Committee and regulatory approvals. Subsequent to the reporting period the Operating Committee approved the Work Programme and Budget which have been submitted to the Management Committee for review and approval.

·; Oilex continues to work closely with its Joint Venture Partner, Gujarat State Petroleum Corp. Ltd (GSPC), to secure approval for the forward work programme and budget.

·; During the reporting period the Company contributed to residual costs of Cambay-76H and ongoing JointVenture activities as it works with GSPC to ensure the Joint Venture is adequately funded.

·; The Company continued working with the Directorate General of Hydrocarbons to secure approval of its application to resume production from Cambay-73. This includes a plan to sell small volumes of gas into a local market in an effort to minimise flaring.

·; Potential gas buyers have been identified and discussions continue on a sales agreement and temporary transport plans for gas produced from Cambay-73.

·; The Cambay-73 well is a conventional vertical well drilled and completed in 2008 with smaller-scale fracture stimulation and 10 metres of active perforations in the Y Zone. It is approximately 1000 metres from Cambay-76H with no discernible flow barriers or substantial changes in geological character between the wells. The well was shut-in on 28 June 2012 with cumulative gas production of 53 MMscf (24 MMscf net to Oilex) and condensate production of 1,483 barrels (667 barrels net to Oilex). Prior to it being shut-in the well was flowing at a rate in excess of 300 Mscfd with associated condensate.

JPDA 06-103, TIMOR SEA

·; During the reporting period the Joint Venture continued engineering reviews and negotiations to identify and secure a suitable rig for drilling the Bazartete Prospect as the third commitment well.

·; Subsequent to the end of the reporting period and pursuant to the Joint Venture's request, a conditional extension to the Initial Period of 1 year was received from JPDA regulatory authority and was accepted by the Joint Venture. A condition of the extension is the requirement to secure a suitable rig by 15 June 2013 for drilling of the proposed Bazartete Prospect.

·; The Bazartete Prospect has been assessed by Oilex to have the potential to contain approximately 70 million barrels of mean prospective oil resources (unrisked, 100% basis) with a 23% chance of success. The range of prospective resource estimates is shown in Table 1.

Table 1 Bazartete Prospect - Prospective resource estimates

BHANDUT FIELD, Gujarat, India

·; Oilex is continuing to investigate commercial options continue for the sale of small volumes of gas from the Bhandut Field to local interested parties. The Company is also investigating other options to realise value from this asset.

SABARMATI FIELD, GUJARAT, INDIA

·; The Sabarmati Field produced 910 barrels of oil (364 barrels net to Oilex) during the reporting period.

West Kampar PSC, Central Sumatra

·; Negotiations are continuing as Oilex pursues a commercial resolution to the Joint Venture dispute. The Company is reviewing legal advice received from its Indonesian lawyers on enforcing its Arbitration Award in Jakarta.

* See note to Asset Schedule

WA-388-P, Australia

·; Work is proceeding to close the joint venture for the WA-388-P offshore exploration permit subsequent to expiry on 27 August 2012, as deemed by the National Offshore Petroleum Titles Administrator (NOPTA).

New Opportunities

Oilex continues to review and evaluate suitable tight hydrocarbon projects that are consistent with its strategy of supplying hydrocarbon energy to the domestic Indian market. The Company's focus is on opportunities in which the successful application of new technology implemented in Cambay could provide near-term production and cashflow. In addition, the Company is reviewing tight reservoir opportunities that may allow it to develop international hydrocarbon resources for importation into India by leveraging its commercial relationships.

CORPORATE

·; Oilex retained a cash position at the end of the quarter of A$7 million.

·; Oilex continues to focus on cost reduction initiatives which do not impair its technical and commercialcapabilities.

·; The Company has contracted a recruitment specialist to assist with the identification and evaluation of external and internal candidates for the position of Managing Director. This process is ongoing with a number of potentially suitable candidates being identified. The Board has given Mr. Ron Miller its full support to move forward in pursuit of the Company's goals and objectives as Acting Managing Director. Mr. Miller will receive A$10,000 per month as additional remuneration to 31 March 2013, and is to be granted 2 million unlisted options exercisable at 15 cents with a 3 year term, subject to shareholder approval.

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

(1) 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 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:

Competent Person's Statement

Information in this report relating to hydrocarbon reserves or resources has been reviewed and checked by Mr Peter Bekkers B.Sc. (Hons), the Chief Geoscientist of Oilex Ltd who has over 15 years of experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr Bekkers consents to the inclusion of the information in this report relating to hydrocarbon reserves and resources in the form and context in which it appears. Resource estimates contained in this report are in accordance with the standard definitions set out by the Society of Petroleum Engineers, Petroleum Resources Management System, 2007.

This document may include forward-looking statements. Forward-looking statements include, but are not necessarily limited to, statements concerning Oilex Ltd's planned exploration program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate" "expect", "intend", "may", "potential", "should" and similar expressions are forward-looking statements. Although Oilex Ltd believes that its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements.

Rule 5.3

Appendix 5B

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

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.

Date: 29 January 2013

Acting Managing Director

Ron Miller