TIDMOEX
RNS Number : 8564G
Oilex Ltd
25 November 2015
ASX Announcement
25 November 2015
ASX: OEX
AIM: OEX
Chairman's Address to Shareholders
Good morning ladies and gentlemen, and welcome to the 2015 Oilex
Annual General Meeting.
We regret to advise that, as previously announced, Mr Sundeep
Bhandari has withdrawn his nomination for re-election as a director
pursuant to Resolution 3 of the Notice of Annual General Meeting.
In addition, there has been a large negative vote recorded against
all of the resolutions covering the remuneration report (Resolution
1), replacement of the Constitution (Resolution 2) and the
re-election of Jeffrey Auld as an Independent Non-Executive
Director (Resolution 4), all of which will be decided by a poll.
Should Resolution 4 not be carried at this meeting, this will
necessitate the appointment of an additional director following
this AGM to ensure the Company complies with Australian
Corporations Law requirements.
The remaining Board members recognise the dissatisfaction
demonstrated by these votes, and we are setting in train the
following measures to address some of those concerns;
-- The Company is reviewing its strategic plan and financing of our core asset at Cambay.
-- Progress negotiation of a commercial resolution of the Cambay
Joint Venture program, cash calls and potential joint venture
restructure.
-- Defending the Zeta litigation with the assistance of external counsel.
-- Review existing board structure and participants, and appoint
suitably qualified and experienced directors.
-- Reviewing Executive management and staffing levels
appropriate to the current amended development timetable, including
review of ongoing operating costs.
The current year has seen a continuation in the softening of the
global resources and energy markets. During this challenging time
the Board and management has continued the transformation of the
Company into an emerging energy supplier in the Cambay Basin
located in Gujarat State, India.
2014/15 has been a landmark year for your company with the
delivery of the proof-of-concept well, Cambay 77-H, and the
reporting of significant independently certified reserves. Oilex is
the first company to successfully apply proven North American
drilling and completion technology to tight oil and gas in India in
the Cambay Basin, India. The success of this step-change technology
has resulted in an upgrade to the reserves and contingent resources
of our Cambay Field.
Alongside this technological success at Cambay, the Company has
made significant progress on the work-over component of the
approved 2015/16 work programme.
The Cambay Field is located adjacent to an existing gas pipeline
grid with surplus capacity in the State of Gujarat and this should
facilitate cost-effective commercialisation of Cambay natural gas.
While global energy markets are experiencing significant price
constraints, being close to existing infrastructure and growing
local energy demand should ensure that domestic prices will be
somewhat resilient to external price pressures.
With delivery of the proof of concept well at Cambay, Oilex is
now progressing the transition from junior explorer to producer.
This transition will not be without its challenges. Having achieved
the technical proof of concept and independently certified
reserves, the focus and priorities of the Board and management are
increasingly concentrated on the commercial, regulatory and funding
challenges that commencing the next phase of production from Cambay
will bring. In addition to addressing the structural joint venture
funding issues that have arisen.
In July 2015, we announced a capital funding programme to raise
A$30 million (before expenses) to fund the approved 2015/16 work
programme in India, estimated minimum work commitments in the
Canning Basin and working capital requirements. This included a
A$9.4 million deferred settlement component with Zeta Resources
Limited, who currently have a 10.3% shareholding in Oilex.
Earlier this month we advised that Zeta had failed to settle the
subscription for the deferred settlement portion of its placement
and convertible note and was pursuing legal action against Oilex.
With the assistance of external legal counsel, we are presently
considering the remedies available to us and we will act in the
best interests of all shareholders to defend any legal action.
This development has obviously had a significant impact on the
company's share price, however in the short term our focus is to
complete the current Cambay work-overs and the Bhandut-3 production
facilities to increase our net revenue stream. Both programmes are
in progress at present and completion of these activities is an
important step in transforming Oilex into a sustainable business
based upon production, cash flow and reserves growth.
In the medium to longer term our focus remains the
commercialisation of significant hydrocarbon reserves located in an
energy market with strong fundamentals. While the schedule for the
approved 2015/16 drilling campaign at Cambay is currently being
reconsidered with our Joint Venture partner, in addition to their
outstanding cash calls, we anticipate that these wells will be
commercially viable and the first steps in the field development
plan, and should ultimately create significant value for all
shareholders and stakeholders through delivering domestically
sourced energy to the India market offsetting imported LNG. The
Board is also actively reviewing alternative funding opportunities
to assist in realising these goals.
Your Board believes that India offers a compelling investment
proposition as the world's fourth largest energy consumer with a
large unsatisfied gas demand. India is forecast to be the world's
fastest growing large economy over the next two years. Strong
growth, combined with a growing middle class forecast to be 475
million people by 2030 is anticipated to result in significant
growth in energy and natural gas consumption.
On behalf of the Board I wish to record our appreciation for the
support and dedication of our Executive Management, staff, Joint
Venture partners, contractors, local communities, shareholders and
stakeholders during the year and look forward to the successful
restructuring of the Board, capital structure and commercialisation
of the Cambay Field.
In addition, I would like to record mine and the Board's
appreciation for the significant contribution made by Mr Sundeep
Bhandari who has decided to retire as a non-executive director from
the close of this Annual General Meeting.
Yours Sincerely,
MDJ Cozijn
Chairman
For further information, please contact:
Investor Enquiries Nominated Adviser Media Enquires
Oilex Ltd Strand Hanson Limited Vigo Communications
Ron Miller Nominated Adviser Public Relations UK
Managing Director Rory Murphy /Ritchie Patrick d'Ancona /
Email: oilex@oilex.com.au Balmer Chris McMahon
Tel: +61 8 9485 3200 Email: oilex@strandhanson.co.uk Email: patrick.dancona@vigocomms.com
Australia Tel: +44 20 7409 3494 chris.mcmahon@vigocomms.com
UK Tel: +44 20 7016 9570
UK
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This information is provided by RNS
The company news service from the London Stock Exchange
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