TIDMOEX

RNS Number : 7880X

Oilex Ltd

29 November 2017

ASX Announcement

29 November 2017

ASX: OEX

AIM: OEX

Chairman's Address to Shareholders

Dear Shareholder

The 2017 financial year has delivered a number of important steps to regain momentum behind the Cambay Project, the Company's key asset. The Company remains committed to unlocking the multi-TCF in-place tight gas potential in the tight EP-IV siltstones at the onshore Cambay Project.

Energy demand in India continues to underpin a strong investment case for the Joint Venture partners at Cambay. The Indian government strongly supports the oil and gas sector with new initiatives to promote exploration and development and particularly to reduce the reliance on imported energy products. The improved operating environment in India is further strengthened by the recent strong rally in Asian LNG prices.

At Cambay, the Company has achieved several key milestones in recent months:

-- In August, Schlumberger, Baker Hughes GE and ODSI completed a technical evaluation of the optimal well and stimulation design required to achieve potential commercial flow rates in the EP-IV reservoir. Notably the results from their analysis has confirmed the potential for substantially increased flow rates with the application of the appropriate stimulation technology suite.

-- In September, a Field Development Plan covering both the high potential EP-IV reservoir and the modest potential OS-II reservoir was completed. It was submitted to the government as a requirement for the application to secure a 10 year extension to the PSC beyond 2019. A decision on the application for the extension is expected prior to mid-year 2018.

-- In November, the Company released its work programme target for 2018 comprising up to 9 workovers, and 3 vertical wells with the possible commencement of a horizontal well. Of this, the EP-IV program carries up to 2 workovers, 2 vertical wells and the horizontal well.

-- The 2018 work program provides for a cost effective approach and is designed to test commercial potential of the EP-IV. Upon success, it would likely lead into a multi-well horizontal development program at Cambay.

The Company continues to carefully manage its cash resources. Our Indian joint venture partner has commenced payment of current year cash calls and has also paid part of the legacy cash calls. Resolution of these legacy cash calls will continue to be a priority in 2018. At the moment, outstanding cash calls total US$5.6 million.

Strategically, the Company continues to actively review new opportunities to create value by diversifying the project portfolio.

On behalf of the Board, I wish to thank our staff, Joint Venture partners, contractors, local communities, shareholders and stakeholders for their ongoing support as the Company moves closer to unlocking substantial unconventional hydrocarbon resources within the Cambay Project.

Best Regards,

Brad Lingo

Chairman

For further information, please contact:

 
 Investor              AIM Broker                 AIM Nominated           Media Enquires         Media Enquiries 
  Enquiries            Cornhill                   Adviser                 (UK)                   (Aus) 
  Oilex                Capital                    Strand Hanson           Vigo Communications    Citadel-MAGNUS 
  Ltd                  Limited                    Limited                 Public Relations       Michael 
  Joe Salomon          Broker                     Nominated               Patrick                Weir 
  Managing             Daniel Gee                 Adviser                 d'Ancona/Chris         Email: 
  Director             Email:                     Rory Murphy/Ritchie     McMahon                mweir@citadelmagnus.c 
  Email:               danielg@cornhillcapital.   Balmer                  Email:                 om 
  oilex@oilex.com.au   com                        Email:                  patrick.dancona@vigo   Tel: +618 
  Tel: +61                                        oilex@strandhanson.co   comms.com              6160 4900 
  8 9485               Tel: +44                   .uk                     chris.mcmahon@vigoco   Australia 
  3200                 20 3700                    Tel: +44                mms.com 
  Australia            2500                       20 7409                 Tel: +44 20 
                       UK                         3494                    7830 9700 
                                                  UK

This information is provided by RNS

The company news service from the London Stock Exchange

END

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