29th Apr 2010 07:00
QUARTERLY REPORT TO SHAREHOLDERS 31 MARCH 2010
SummaryIndia
* Increased focus on India with Managing Director relocated in country
* Cambay Joint Venture approves further exploration and appraisal drilling
activity * Detailed technical studies progressing to evaluate Cambay tight gas reservoirs * Operations continue to be cash flow positive
WA-388P (North West Shelf, Australia)
* Seismic processing studies substantially completed * Potential drilling decision anticipated by July * Woodside farm in announced on adjacent Cue Energy block (WA-389P)
New Ventures
* Opportunities being pursued. Focus areas are South East Asia and India
JPDA 06-103 (Timor Sea)
* Technical studies continuing to assess Lor©-1 and Lolotoe-1 well results
* Drilling campaign completed within budget
West Kampar (Indonesia)
* Resolution to Joint Venture dispute being pursued
* Awaiting decision from ICC Tribunal on Arbitration to recover monies from
Operator's parent company
Corporate
* Oilex retained A$18.2 million cash at the end of the Quarter with no corporate debt * Management team and costs restructured
Overview
During the Quarter Oilex increased its focus on India. Independent technical studies were initiated to evaluate the Cambay low permeability Eocene reservoirs that tested oil and gas in previously drilled wells. The Cambay Joint Venture has agreed to further drilling to evaluate the gas and oil potential of the Eocene and other reservoirs.
During the Quarter Oilex increased its New Ventures efforts as part of its strategy to strengthen its asset portfolio.
In Australia, 3D seismic processing studies were substantially completed on its WA-388P block, offshore Western Australia. A potential drilling decision is anticipated by July.
Oilex continues to pursue a resolution to the West Kampar PSC Joint Venture dispute. Oilex is awaiting a decision from the ICC Tribunal following the completion of the Arbitration hearing in February 2010 in which Oilex is seeking to recover monies from the Operator's parent company.
Oilex completed drilling the second of the exploration wells in the Timor SeaJPDA 06-103 contract area. Studies are now being carried out to assess theresults from the two wells and the implications for prospectivity and selectionof future drilling targets. There remain several undrilled structures withpotential to host significant oil reserves.The company's cash position remains strong and India production continues togenerate positive cash flows. During the quarter, the Perth based organisationwas restructured with an increased focus on India and South East Asia.
OPERATIONS REVIEW
CAMBAY FIELD, Gujarat, India
(Oilex Operator - 45%)
* Oilex increased its focus and presence in India. Bruce McCarthy, Oilex's
Managing Director, who has over 15 years experience working in India has
relocated in country to manage Oilex's assets and growth in India.
* A USA based consulting firm specialising in tight gas was commissioned to
perform technical studies to evaluate Cambay's low permeability Eocene reservoirs. The consultant is analysing existing Cambay well data by applying tight gas interpretation techniques.
* Reprocessing of Cambay 3D seismic data was initiated. The 3D data covers
the whole Cambay block and the results are expected to provide further
information on the Eocene tight gas reservoirs and the OSII interval in the
eastern part of the Cambay block which has untapped gas potential. * During the Quarter, the Joint Venture agreed to undertake further gas exploration and appraisal drilling in the Cambay field. * Total net production from the Cambay, Bhandut and Sabarmati Fields was 2,707 barrels of oil for the Quarter (Oilex share). * Oil production from the Miocene Basal Sand (MBS) in the Cambay Field continues to decline from the Cambay-74 and Cambay-64 wells. WA-388P, Australia(Oilex Operator - 14%)
* Initial results of seismic interpretation are encouraging with possible
direct hydrocarbon indicators evident.
* Seismic processing studies of 3D seismic data is substantially complete and
final interpretation is ongoing. * Finalising preparation of a portfolio of prospects and leads with a decision by the Joint Venture as to whether to enter the next phase and commit to drilling a well being anticipated by July.
* After Quarter end, Cue Energy announced on 27 April that Woodside Energy
Ltd has farmed into its 100% interest WA-389P permit with Woodside
acquiring a 65% permit interest and operatorship. WA-389P is located
immediately to the east of Oilex's WA-388P block.
New Ventures
* Oilex is seeking to strengthen its asset portfolio and is largely focussing
its new ventures effort in South East Asia and India.
* A number of potential opportunities are currently being evaluated.
JPDA 06-103, TIMOR SEA(Oilex Operator - 10%)
* The JPDA 06-103 Joint Venture drilled the Lor©-1 and Lolotoe-1 wells, which
were the first 2 wells of the PSC's work program commitment. Neither well
encountered commercial hydrocarbon zones. The wells were completed within
budget and with no HS&E incidents.
* 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 most of its 10% share of costs associated with the Lor©-1 and Lolotoe-1
wells. Oilex was also reimbursed for some of its past expenditures.
* The Lor©-1 and Lolotoe-1 well data are now being integrated with existing
data and studies are underway to understand the absence of oil in the wells, the implications for prospectivity and the selection of future drilling targets.
* There remain several undrilled structures in the JPDA 06-103 contract area
with potential to host significant oil reserves. 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.
West Kampar PSC, Central Sumatra
(Oilex - 45% + 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 -
SPE) to pursue the approved work program, as well as non-compliance with
other obligations.
* Oilex's priorities for this asset remain to:
1. Recover over US$4.6 million owed to Oilex by SPE by enforcement of the
security held (refer below for status of the 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 ICC Arbitration hearing initiated by Oilex against the operator's
parent company guarantor - PT Asiabumi Petroleo, commenced in Singapore on
25 January 2010 and was completed on 19 February 2010. Following closing
submissions filed in March 2010, Oilex is now awaiting the decision from
the ICC Tribunal on Oilex's claim seeking the recovery of over US$4.6
million.
* In the course of the Arbitration proceedings, Oilex was notified of a claim
filed on 25 January 2010 by SPE in an Indonesian court. Oilex has not been
served with the claim. Oilex understands that SPE is seeking damages from
Oilex for alleged defamation arising out of correspondence in November 2008
that provided BPMigas with information relating to SPE's performance as
operator. Oilex rejects the allegations in the claim and, if served, will
vigorously oppose them.
* SPE has informally advised Oilex that it may attempt to drill the
Pendalian-4 well. Such an activity would be a unilateral decision by SPE
and has not been presented to or approved by the Joint Venture.
*Under Oilex's security it is entitled to have assigned an additional 22.5% toits holding through exercise of its rights under a Power of Attorney granted bySPE, following the failure of SPE to repay funds due.
Block 56, Oman
(Oilex Operator - 25%)
* Oilex continued to review the options for Block 56 with the Joint Venture
including relinquishment. * Oilex's attempts to renegotiate commercial terms for Block 56 with the Omani Ministry of Oil and Gas on behalf of the Joint Venture were not successful.
Corporate
* Oilex retained A$18.2 million cash at the end of the Quarter with no
corporate debt
* Net operating and investing cash outflows for the Quarter were $0.7 million
* 5,650,000 unlisted options lapsed during the Quarter * Management team and costs restructured for future focus in India, South East Asia and Australia
Safety, Health and environment
No lost time incidents were recorded in Oilex's operational areas including theJPDA offshore drilling program and India operations during the Quarter.Cumulative total man hours worked in India since the last LTI (April 2008) is768,367.
Oilex regularly updates its website at www.oilex.com.au
For and on behalf of the Board
B. H. McCarthyManaging Director29 April 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 atwww.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 220,074,885 Australian Stock Exchange Code: OEX Unlisted Options 24,325,000 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 HS&E Health, Safety & Environment referring to all of the issues that relate to operational performance in a manner that is safe for personnel and the local environment 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) Permit schedule PERMIT JOINT VENTURE PARTIES EQUITY % OPERATOR BASIN/STATE/COUNTRYCambay Field PSC Cambay / Gujarat / India Oilex Ltd 30.0 Oilex Ltd Oilex NL Holdings (India) 15.0 Limited Gujarat State Petroleum Corp. 55.0 Ltd Bhandut Field PSC Cambay / Gujarat / India Oilex NL Holdings (India) Limited Oilex NL Holdings (India) 40.0 Limited Gujarat State Petroleum Corp. 60.0 Ltd Sabarmati Field PSC Cambay / Gujarat / India Oilex NL Holdings (India) Limited Oilex NL Holdings (India) 40.0 Limited Gujarat State Petroleum Corp. 60.0 Ltd Block 56 EPSA South Oman / Oman Oilex Oman Limited Oilex Oman Limited 25.0 GAIL (India) Limited 25.0 Videocon Oman 56 Limited 25.0 Bharat Petroresources Ltd 12.5 Hindustan Petroleum Corp Ltd 12.5 West Kampar PSC
Central Sumatra / Sumatra/ Indonesia
PT Sumatera Persada Energi Oilex (West Kampar) Limited 67.5 (1) PT Sumatera Persada Energi 32.5 JPDA 06-103 PSC
Flamingo / Joint Petroleum Development Area / Timor-Leste & Australia
Oilex (JPDA 06-103) Ltd Oilex (JPDA 06-103) Ltd 10.0 Japan Energy E&P JPDA Pty Ltd 15.0 GSPC (JPDA) Limited 20.0 (2) Videocon JPDA 06-103 Limited 20.0 (2) Bharat Petroresources JPDA Ltd 20.0 (2) Pan Pacific Petroleum (JPDA 15.0 (2) 06-103) Pty Ltd WA-388-P Carnarvon / WA / Australia Oilex Ltd Oilex Ltd 14.0 Gujarat State Petroleum Corp Ltd 14.0 Videocon Industries Ltd 14.0 Bharat Petroresources Ltd 14.0 Hindustan Petroleum Corp Ltd 14.0 Sasol Petroleum Australia Ltd 30.0
(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.
(2) Pan Pacific Petroleum (JPDA 06-103) on 19th February 2010 acquired a 15% participating interest via a farmin arrangement with Videocon JPDA 06-103 Limited, Bharat PetroResources JPDA Ltd and GSPC (JPDA) Ltd.
Listing Rule 5.3Appendix 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 MARCH 2010
1 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date
$A'000 (9 months) $A'000 1.1 Receipts from product sales and 305 1,091 related debtors 1.2 Payments for (a) exploration and (712) (30) evaluation (b) development - (255) (c) production (115) (428) (d) administration (net) (274) (1,268) 1.3 Dividends received - - 1.4 Interest and other items of a similar 69 113 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 (727) (777)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) -
- prospects - - (b) equity investments (10)
(129)
(c) other fixed assets 1.9 Proceeds from sale of: (a) prospects -
-
(b) equity investments -
-
(c) other fixed assets -
29
1.10 Loans to other entities -
-
1.11 Loans repaid by other entities -
29
1.12 Other (provide details if material) -
-
Net investing cash flows (10)
(71)
1.13 Total operating and investing cash (737)
(848)
flows (carried forward) 1.13 Total operating and investing cash (737) (848) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, - 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
Net increase (decrease) in cash held (737)
8,582
1.20 Cash at beginning of quarter/year to 19,154 10,506 date 1.21 Exchange rate adjustments to item 1.20 (195) (866) 1.22 Cash at end of quarter 18,222 18,222Payments to directors of the entity and associates of the Current quarter directors $A'000
Payments to related entities of the entity and associates of
the related entities
1.23 Aggregate amount of payments to the parties included
306 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
2 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 3 Financing facilities available Amount available Amount used Add notes as necessary for an $A'000 $A'000 understanding of the position. 3.1 Loan facilities - - 3.2 Credit standby arrangements - - 4 Estimated cash outflows for next quarter $A'000 4.1 Exploration and evaluation 900 4.2 Development - Total 9005 Reconciliation of cash
Reconciliation of cash at the end of the Current quarter Previous quarter quarter (as shown in the consolidated
statement of cash flows) to the related $A'000 $A'000 items in the accounts is as follows. 5.1 Cash on hand and at bank 10,986 11,944 5.2 Deposits at call 7,236 7,210 5.3 Bank overdraft - - 5.4 Other (provide details) - - Total: cash at end of quarter 18,222
19,154
(item 1.22) 6 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 mining Refer to Permit tenements Schedule in Quarterly relinquished, Report reduced or lapsed 6.2 Interests in mining Refer to Permit tenements acquired Schedule in Quarterly or increased Report 7 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 up per security 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 - - (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 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 Total 24,325,000
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 Issue price Amount paid quoted 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 Tranche 2 expire 1/07/ 120,000 2012 Tranche 3 expire 1/07/ 120,000 2012 2008 Performance Rights 84,000 Tranche 1 expire 1/07/ 2013 Tranche 2 expire 1/07/ 36,000 2013 Tranche 3 expire 1/07/ 36,000 2013 Exercise Expiry Date Price 7.8 Issued during - - quarter 7.9 Exercised during quarter 7.10 Expired during Exercise Expiry Date quarter 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 Total 5,650,000 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 April 2010
(Director)
Print name: Ben Clube
vendorRelated Shares:
OEX.L