Quarterly Report to Shareholders - 31 March 2012

OILEX LTD

QUARTERLY REPORT TO SHAREHOLDERS

31 MARCH 2012

Highlights

Cambay PSC (45% Operator) onshore Gujarat, India

·; Milling operations on the Cambay-76H horizontal well were completed in April with all 8 stages now expected to flow back during well clean up and production testing.

·; An influx of fracture sand caused the milling assembly to packoff and the drill pipe to part downhole in April. Operations to retrieve the drill pipe are in progress and it is anticipated that on completion, production tubing will be run and the well will be flowed to surface for cleanup and production testing.

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

·; The Bazartete Prospect has been confirmed by the JPDA 06-103 Joint Venture as the prospect to be tested by drilling the next exploration well.

·; Planning is underway to drill the Bazartete prospect.

Overview

Activity during the quarter was dominated by operations to control the Cambay-76H well and recovery of equipment that had been stuck downhole. The well has continued to flow gas and condensate to surface intermittently at high pressure and a mud system of a higher density has been installed. The intermittent flows of hydrocarbons and fracture stimulation fluids to surface observed during the quarter may be positive indicators of potentially good future reservoir performance.

The Cambay-76H well clean-up operations and production testing continue to be delayed due to the well control and equipment retrieval operations. However milling operations were completed during the quarter and after current retrieval operations are concluded, it is anticipated that production tubing will be installed and the well will be flowed back prior to performing a production test. The production test data obtained will be used to demonstrate commerciality for a potential future Y zone development.

OPERATIONS REVIEW

CAMBAY FIELD, Gujarat, India

Cambay-76H Well

·; The retrieval operations that had been conducted in December 2011 continued in this quarter. The remainder of the coiled tubing and milling assembly was recovered in early March and milling operations resumed.

·; Retrieval (or fishing) operations were interrupted with high bottom hole pressure conditions and an influx of gas and fracture stimulation fluids requiring close monitoring and well control operations to stabilise the well were carried out frequently during January and February.

·; Gas and condensate, nitrogen (that had been injected in the early stages of attempting to free the milling assembly) and fracture stimulation fluids have been circulated to surface and the hydrocarbons have been flared.

·; Re-interpretation of the post- stimulation fracture pressure data revealed that the reservoir pressure is higher than previously anticipated and explained in part the unusually high pressure that was causing the well to flow at pressures not seen in any other wells known to Oilex in the Cambay Basin. The mud system was changed out to a solution that could be built up to a higher density than previously available and the well was stabilised.

·; With the well under control, operations to retrieve the stuck milling assembly and coiled tubing were successfully concluded in early March. Milling of the seats and balls of the remaining fracture stimulation stages then resumed.

·; Operations were terminated at a depth of 2,581 metres, with 6 stages fully opened to flow when a significant influx of fracture stimulation sand from a localised zone of higher pressure was encountered. The sand packed off the milling assembly and prevented further progress. At the same time the drill pipe parted while pulling out of the well. A further ten instances of deficiencies in the drill pipe integrity were identified after X ray testing and new pipe was procured as a contingency.

·; During April, operations to retrieve the drill pipe and milling assembly were progressing.

·; On completion of the retrieval operations, it is anticipated that production tubing will be run and the well will be flowed back to surface for cleanup prior to testing.

Oilex successfully drilled and completed the 2,740 metre Cambay-76H well in the period from June to July 2011. The well included a 610 metre horizontal section and an eight stage fracture stimulation program, the first well onshore India to apply these technologies for development of tight reservoirs. However clean-up operations in preparation for production testing were suspended when a coiled tubing milling assembly became stuck in the wellbore. Recovery operations have been attenuated by well control and equipment integrity problems.

During the Quarter a previously stimulated well - Cambay 73 (nearby Cambay 76H), was reopened in order to flow it back to surface, clean up the well and to gather additional data to evaluate the potential of the Y zone reservoir.

A further assessment of resources and reserves is anticipated to be undertaken by NSAI once sufficient production data are obtained from the Cambay 76H well.

BHANDUT FIELD, Gujarat, India

·; Workover activity on two wells, Bhandut-3 and Bhandut-4, was partly successful with a thin gas zone in Bhandut-3 flowing gas to surface from a small structure. The zone has been tested and the results are being assessed.

·; Bhandut-4 well was shutin pending further evaluation.

WA-388-P, Australia

·; The Operator (Apache) provided the Joint Venture with the final prospectivity review for the permit following the completion of the Rose 3D seismic reprocessing and the updated calibration utilising the recent La-Rocca-1 well results.

·; The WA-388-P permit term will expire on the 28th August 2012. The Operator has proposed a relinquishment and renewal programme to be submitted to the Designated Authority for consideration.

JPDA 06-103, TIMOR SEA

·; Interpretation of the Bazartete reprocessed seismic data was completed during the quarter. Volumetrics, risking and economics were also completed. The Bazartete prospect has been delineated as a significant structural depth closure. Final mapping of the Bazartete seismic data shows the presence of a broader depth closure than was previously mapped. The proposed Bazartete-1 well has been selected as the third commitment well location in JPDA 06-103.

·; Investigations regarding the availability of a suitable rig for drilling in the contract area and well planning were undertaken during the quarter.

West Kampar PSC, Central Sumatra

·; Negotiations are continuing as Oilex pursues a commercial resolution to the Joint Venture dispute. At the same time, the Company intends to protect its participating interest in the West Kampar PSC and to pursue enforcement of its Arbitration Award as appropriate.

Financial

·; Oilex retained cash at the end of the Quarter of A$7.7 million with no commercial loans.

Health, Safety, Security and Environment

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

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

For further information, please contact:

Information in this report relating to hydrocarbon reserves or resources has been compiled by Mr Ray Barnes B.Sc. (Hons), the Technical Director of Oilex Ltd who has over 38 years' experience in petroleum geology and is a member of the AAPG. Mr Barnes 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."

LIST OF ABBREVIATIONS AND DEFINITIONS USED HEREIN

(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 but has not yet been approved or rejected. If Oilex is paid the funds due then it will not pursue this assignment.

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.

Sign here: Date: 30 April 2012

(Director and Company Secretary)

Print name: Ben Clube