TIDMOEX

RNS Number : 6052F

Oilex Ltd

29 July 2016

29 JULY 2016

OILEX LTD - JUNE 2016 qUARTERLY rEPORT

HIGHLIGHTS

CAMBAY FIELD, ONSHORE GUJARAT, INDIA

>> Oilex reaffirms its commitment to unlocking the multi TCF in-place tight gas potential in its onshore Cambay Block.

>> Planning underway to complete a vertical well with the dual objective of developing un-depleted OS-II sand and to obtain core samples from the EP-IV Zone reservoir for drilling and stimulation studies.

>> Gas sales from Cambay-77H continue with an average gas production rate for the quarter of 152,000 scfd, or 26 boepd (Oilex net 68,000 scfd, or 12 boepd) and with an average associated condensate & oil rate of 6 bpd (Oilex net 3 bpd).

>> Reserve volumes have been re-classified to Contingent Resources, reflecting deferral of the development timetable and prevailing oil and gas prices.

>> Negotiations continue with our Joint Venture partner to address payment of outstanding cash calls, contributions to programmed activities and approval of the annual budget resulting in delays to planned activities.

>> During the quarter, the Joint Venture partner released US$575,000 towards part payment of outstanding cash calls.

>> Application seeking permission for Extending Well Testing of Cambay-73 and Cambay-77H for another six months for each well and sale of test gas submitted for regulatory approval.

BHANDUT FIELD, ONSHORE GUJARAT, INDIA

   >>   Production from the Bhandut facility commenced in April. 

>> Test Gas Production at Bhandut-3 well averaged 503,000 scfd, or 87 boepd (Oilex net 201,400 scfd, or 35 boepd) and with an average associated condensate rate of 18 bpd (Oilex net 7 bpd).

>> The Joint Venture and the Government of India approved the Work Programme & Budget for Bhandut Field for the Indian financial year starting 1 April 2016.

>> During the quarter, the Joint Venture partner released US$302,000 towards payment of outstanding cash calls for the Indian FY 2015-16.

>> Application for three-year extension of Petroleum Mining Lease under active consideration of the government.

   >>   Field Development Plan under preparation for commercial gas production from Bhandut-3. 
   >>   CORPORATE 

>> During the quarter Oilex reached a settlement with Zeta Resources Limited that ends the legal proceedings between the parties.

   >>   Mark Bolton was appointed Chief Financial Officer and Company Secretary. 
   >>   Cash balance at 30 June 2016 was $5.2 million. 

operations review

OVERVIEW

India's growing domestic gas supply demand imbalance continues to grow apace with the shortfall being principally filled with a rapid expansion in LNG imports. In 2015, domestic gas production fell by 3.8% and LNG imports increased by 14.8% on backdrop of a 5.2% overall increase in primary energy consumption(1) . Unconventional gas fields, including the substantial gas resources at Cambay, have yet to play an important role in the Indian energy market.

The appointment of new executive management and changes to Oilex's Board in recent months has seen Oilex adopt a revitalised and positive culture to actively enhance value creation for all stakeholders.

In this regard, Oilex has extracted itself from a complex and costly litigation with Zeta Resources Limited (Zeta). Management has now turned its attention to Oilex's principal asset, the 45% interest in Cambay. The project retains its strong fundamentals centred around the proven rich petroleum system of the Cambay Basin and the multiple wells that have intersected and produced hydrocarbons. Multiple targets are present at stacked stratigraphic levels and commercial success requires the further refining of proven technologies focussed around long horizontal well sections, and the application of optimal drilling and completions technology.

Oilex is at an advanced stage in completing a detailed working plan to take the Cambay project forward and the results to date support a vertical well with the dual objective of (i) targeting recovery of core from the Eocene siltstone (EP-IV or Y Zone) and (ii) developing the un-depleted OS-II reservoir zone.

A lower cost vertical well will seek to obtain core samples from the EP-IV Zone reservoir for drilling and stimulation studies. This is essential prior to drilling a horizontal extension for exploitation of the Eocene siltstones. The well will also have the potential to develop gas in the shallower, productive OS-II conventional reservoir zone, or based on analysis of core results, could be used later to test the EP-IV Zone.

Subject to the success of the planned work programme, inclusive of the vertical well, Oilex anticipates lodging its Field Development Plan (FDP) in the first half of 2017 in support of its Cambay PSC extension application.

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

No lost time incidents recorded during the quarter.

CAMBAY FIELD, GUJARAT, INDIA

(Oilex: Operator and 45% interest)

Oilex reaffirms its commitment to unlocking the multi TCF in-place tight gas potential in its onshore Cambay Block, Gujarat State, India. Oilex is at an advanced stage in completing a detailed working plan to take the Cambay project forward and the results to date support a vertical well with the dual objective of developing the undepleted OS-II reservoir sand and also targeting recovery of core from the Eocene siltstone (EP-IV or Y Zone).

The vertical well will seek to obtain core samples from the EP-IV Zone reservoir for drilling and stimulation studies. This is essential prior to drilling a horizontal extension for potential later exploitation of the Eocene siltstones. The well will also have the potential to test the shallower, productive, OS-II conventional reservoir or may be later used to test the EP-IV based on results of the core. The detailed planning for this well is being finalised and is subject to Joint Venture approvals. This approach allows Oilex to take advantage of the lower cost vertical well drilling rates in India at present.

Production from the block for the quarter was approximately 152 mscfd plus 6 bpd liquids (32 boepd; Oilex net 15 boepd) with the bulk of production coming from the Cambay-77H EP-IV reservoir. Cambay-77H was on production test up to 3 June 2016 and, along with Cambay-73, is presently shut-in awaiting Government of India (GoI) approval for the continued production of test gas. Oilex has submitted a proposal to the GoI for extended well testing for six months for each well and the proposal is under active consideration of the GoI.

Cambay gas is sold into the local low pressure gas market.

Resource Update

In April 2015, Oilex tabled the reserve and contingent resource volumes associated with the EP-III/IV (X and Y Zones) resulting from the review undertaken by third party certifier, RISC. Since that time, a number of key factors have changed including:

i) a change in economic assumptions related to lower gas prices being realised because of the world wide fall in oil and gas prices;

   ii)             Oilex's Joint Venture partner's failure to approve ongoing work; and 

iii) the resultant deferral in project timing which pushes the recovery of Reserves to beyond the current term of the PSC. Note that under the PSC extension policy dated 28 March 2016 announced by the GoI, on Oilex's request the PSC can be extended for 10 years or the economic life of the block, whichever is earlier. Oilex shall be exercising its PSC extension right under the policy at an appropriate time.

On this basis, RISC has recommended in June 2016 that the Reserve volumes be re-classified to Contingent Resources. It should be noted that the total estimated volume of hydrocarbons has not been amended. The updated recoverable hydrocarbon volumes are tabulated below:

 
                                                                   Net Condensate 
                                         Net Gas Volume                Volume 
                                              Bcf                   million bbl 
                                      -------------------  ----------------------------- 
                                        1P     2P     3P          1P          2P     3P 
  ----------------------------------  -----  -----  -----  ---------------  -----  ----- 
 At April 
    2015      Reserves      Y Zone      0      93    170          0          3.6    7.8 
            ------------  ---------- 
               At June 
                 2016                   0      0      0           0           0      0 
                                             -----                          ----- 
                                        1C     2C     3C          1C          2C     3C 
  ----------------------------------  -----  -----  -----  ---------------  -----  ----- 
 At April    Contingent      X and 
    2015      Resources     Y Zones    215    324    558          12         23.8   46.8 
            ------------  ---------- 
               At June 
                 2016                  215    417    728          12         27.4   54.6 
------------------------------------  -----  -----  -----  ---------------  -----  ----- 
 Table shows Oilex Net Working Interest 
  (45%) Reserves and Contingent Resources 
 Reserves in Y Zone have been 
  reclassified Contingent Resources 
 Refer to ASX announcement 
  24 June 2016 for further details 
 
 

BHANDUT FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

Production of gas commenced from the Bhandut Field early in the June 2016 quarter. Production from the Bhandut-3 well averaged 503 mscfd with 18 bpd associated liquids (87 boepd; Oilex net 35 boepd) during the quarter. The field is being closely monitored while an extension of the permitted production plan is being approved. While tubing head pressure at the well has been maintained, some formation water has been identified with the gas.

Oilex is Operator and holds 40% equity in the Bhandut Field, with Gujarat State Petroleum Corporation (GSPC) holding the remaining participating interest. Previous drilling in the Bhandut Field intersected a number of hydrocarbon zones, some of which have been produced and are now shut-in. The Bhandut-3 well commenced production from a previously undeveloped sandstone at a depth of 1,010 metres at virgin reservoir pressure.

Gas produced from Bhandut-3 is initially processed at the on-site production facilities and then delivered to a third party operated gas processing plant where it is further treated to the required pipeline specification. It is subsequently compressed for entry into the high pressure gas network for delivery to an end user.

Currently the JV has approval to sell test gas from this project until 5 October 2016 pending completion and approval of a FDP. During this period, Oilex shall be submitting an FDP on single well basis and seek GoI permission for commercial gas sale. In case the FDP is approved earlier than 5 October 2016, Oilex will switch over to early commercial gas production.

Currently the Bhandut Petroleum Mining Lease (PML) is valid until 22 September 2016. An extension application for three years starting from 23 September 2016 has been submitted to the GoI.

Figure 1: Bhandut Processing Facilities (see Oilex website)

Joint Venture Management

Oilex continues to engage with its JV partner, GSPC to resolve the unpaid cash calls and to obtain a commitment from GSPC to participate in future activities or to find an alternative solution. At the end of the quarter, the total unpaid cash calls were approximately US$6.5 million. During the quarter Oilex received payments from GSPC totalling approximately US$575,000 for Cambay and approximately US$302,000 for Bhandut. Oilex continues to manage payment of JV creditors under a staged plan.

Negotiations on a budget acceptable to the JV partner for the Cambay Block have been ongoing. Oilex previously submitted a reduced budget for the Cambay Project for the Indian financial year starting 1 April 2016. This work programme concentrated primarily on maintenance of the asset however it has not been approved by the Joint Venture at this time. Oilex will shortly submit a revised work programme to the Joint Venture for approval, inclusive of the planned new vertical well. In the absence of a timely and mutually acceptable approval by the JV, Oilex may elect to sole risk the programme pursuant to the Joint Operating Agreement (JOA).

The Cambay PSC primary term expires in September 2019, and the JV has the possibility of applying for an extension of up to 10 years, such that the PSC could be extended to 2029 or economic life of the block, whichever is earlier, subject to submission of a field development plan. Subject to the success of the planned work programme, inclusive of the vertical well, Oilex anticipates lodging its FDP in the first half of 2017 in support of its PSC extension application.

The JV partner has approved the Work Programme & Budget (WP&B) for the Bhandut Field for the Indian financial year starting 1 April 2016. The JV partner has also approved the Revised Budget for the Indian financial year ended on 31 March 2016.

WALLAL GRABEN, WESTERN AUSTRALIA (CANNING BASIN)

(Oilex: Operator and 100% interest)

The Wallal Graben asset is located adjacent to the Pilbara, a global resource centre for iron ore and LNG in Western Australia.

The Wallal Graben blocks are frontier exploration blocks that represent a potential low cost entry to an underexplored area. Oilex continues to investigate low cost exploration de-risking tools and approaches that address the geological uncertainties in this basin and that potentially provides an alternative lower cost work programme.

Final award of the blocks requires signing of Heritage Agreements with the Nyangumarta and Njamal People and is linked to a request to the Department of Mines and Petroleum (DMP) that all three blocks be awarded simultaneously. Consultations on the Heritage Agreements are nearly complete following which the DMP will make an offer to grant a Petroleum Exploration Permit for each of the three blocks to Oilex for acceptance.

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

Oilex as operator, and on behalf of the JPDA 06-103 Joint Venture participants, continues to seek a resolution to the dispute with Autoridade Nacional do Petroleo (ANP) in relation to matters associated with the termination of JPDA 06-103 PSC. In July 2015, the ANP rejected the Joint Venture request to terminate the PSC by mutual agreement in good standing and without penalty and sought to impose a penalty of approximately US$17 million upon the Joint Venture. The Joint Venture carried out significantly more exploration than required during the PSC term and believes the excess was not properly credited in accordance with the PSC. The Joint Venture continues its discussions with ANP.

The Joint Venture remains hopeful an amicable settlement will be reached with the ANP. In the event the parties are unable to reach an amicable settlement, any party may refer the matter to arbitration. If this occurs, the obligations and liabilities of the Joint Venture participants under the PSC are joint and several, with parent company guarantees provided by all JV participants. Oilex has a 10% participating interest in the Joint Venture.

WEST KAMPAR PSC, CENTRAL SUMATRA, INDONESIA

(Oilex: 45% interest and further 22.5% secured(3) )

A Court approved Scheme of Arrangement has been implemented over the Operator, however, Oilex continues to pursue enforcement of the Arbitration Award and a commercial settlement.

A technical review was commenced during the June quarter.

CORPORATE

At the end of the quarter Oilex retained cash resources of $5.2 million.

Oilex continues to engage with its JV partner, GSPC, to resolve outstanding cash calls and gain approval of the work programme and budget for the Indian financial year beginning 1 April 2016. The resolution of these matters is essential for Oilex to extract maximum value from the Cambay Field. Various approaches to progress work at Cambay are being considered.

Whilst the working plans for the field are being finalised and approved, Oilex as operator, continues to bear all of the ongoing costs of the Joint Venture.

Zeta Litigation

During the quarter Oilex reached an agreement with Zeta that ends the legal proceedings between the parties. The terms of the settlement are that each party will no longer pursue its claim against the other, with the legal proceedings dismissed on a no admission of liability basis. Oilex has also agreed to make a payment to Zeta on account of costs of the litigation of $490,000.

In reaching this settlement with Zeta, Oilex has taken into account the significant costs and inherent uncertainty of litigation, and the substantial time commitments and distraction that the litigation presents for the Board and management.

Executive Appointments

Oilex has appointed Mr Mark Bolton as Chief Financial Officer and Company Secretary, with effect from 10 June 2016.

Mark has worked as CFO and Company Secretary for a number of resource companies since 2003. Prior to that he worked with Ernst & Young stepping down as Executive Director in Corporate Finance. Mark has a Bachelor of Business Degree in Accounting and Finance. His strengths are in the commercial management and financing of resource projects internationally. Coupled with this, he has extensive experience in capital and equity markets in a number of jurisdictions including ASX and AIM.

 
  Capital Structure as 
   at 30 June 2016 
  Ordinary Shares     1,180,426,999 
  Unlisted Options       20,250,000 
 

Qualified Petroleum Reserves and Resources Evaluator Statement

Pursuant to the requirements of Chapter 5 of the ASX Listing Rules, the information in this report relating to petroleum reserves and resources is based on and fairly represents information and supporting documentation prepared by or under the supervision of Mr. Peter Bekkers, Chief Geoscientist employed by Oilex Ltd. Mr. Bekkers has over 20 years' experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr. Bekkers meets the requirements of a qualified petroleum reserve and resource evaluator under Chapter 5 of the ASX Listing Rules and consents to the inclusion of this information in this report in the form and context in which it appears. Mr. Bekkers also meets the requirements of a qualified person under the AIM Note for Mining, Oil and Gas Companies and consents to the inclusion of this information in this report in the form and context in which it appears.

 
 CORPORATE DETAILS 
  Board of Directors 
 Max Cozijn                                         Non-Executive Chairman 
 Brad Lingo                                         Independent Non-Executive 
                                                    Director 
 Joe Salomon                                        Managing Director 
 Company Secretary 
 Mark Bolton                                        CFO & Company Secretary 
 Stock Exchange 
  Listing 
 Australian Securities                              Code: OEX 
  Exchange 
 AIM London Stock                                   Code: OEX 
  Exchange 
 Share Registry 
 Australia                                            United Kingdom 
 Link Market Services Limited                         Computershare Investor 
  Central Park                                         Services PLC 
  Level 4                                              The Pavilions 
  152 St. Georges Terrace                              Bridgwater Road 
  Perth, WA 6000 Australia                             Bristol BS13 8AE United 
  Telephone: 1300 554 474                              Kingdom 
  Website:                                             Telephone: +44 (0) 870 
  http://investorcentre.linkmarketservices.com.au      703 6149 
                                                       Facsimile: +44 (0) 870 
                                                       703 6116 
                                                       Website: 
                                                       www.computershare.com 
 
 

PERMIT SCHEDULE

 
                        PERMIT SCHEDULE - 30 JUNE 2016 
---------------------------------------------------------------------------- 
  ASSET            LOCATION            ENTITY          EQUITY    OPERATOR 
                                                          % 
---------------  ------------------  --------------  --------  ------------- 
  Cambay Field     Gujarat,            Oilex Ltd        30.0     Oilex Ltd 
   PSC              India 
---------------  ------------------                            ------------- 
    Oilex NL 
     Holdings 
     (India) 
     Limited                                            15.0 
  -------------------------------------------------  --------  ------------- 
  Bhandut          Gujarat,            Oilex NL         40.0     Oilex NL 
   Field PSC        India               Holdings                  Holdings 
                                        (India)                   (India) 
                                        Limited                   Limited 
---------------  ------------------  --------------  --------  ------------- 
  Sabarmati        Gujarat,            Oilex NL         40.0     Oilex NL 
   Field PSC        India               Holdings                  Holdings 
   (2)                                  (India)                   (India) 
                                        Limited                   Limited 
---------------  ------------------  --------------  --------  ------------- 
  West Kampar      Sumatra,            Oilex (West      67.5     PT Sumatera 
   PSC              Indonesia           Kampar)          (3)      Persada 
                                        Limited                   Energi 
---------------  ------------------  --------------  --------  ------------- 
  JPDA 06-103      Joint Petroleum     Oilex (JPDA      10.0     Oilex (JPDA 
   PSC              Development         06-103)                   06-103) 
                    Area                Ltd                       Ltd 
                    Timor-Leste 
                    & Australia 
---------------  ------------------  --------------  --------  ------------- 
  STP-EPA-0131     Western             Admiral         100.0     Admiral 
                    Australia           Oil Pty                   Oil Pty 
                                        Ltd (4)                   Ltd (4) 
---------------  ------------------  --------------  --------  ------------- 
  STP-EPA-0106     Western             Admiral         100.0     Admiral 
                    Australia           Oil and          (5)      Oil and 
                                        Gas (106)                 Gas (106) 
                                        Pty Ltd                   Pty Ltd 
                                        (4)                       (4) 
---------------  ------------------  --------------  --------  ------------- 
  STP-EPA-0107     Western             Admiral         100.0     Admiral 
                    Australia           Oil and          (5)      Oil and 
                                        Gas (107)                 Gas (107) 
                                        Pty Ltd                   Pty Ltd 
                                        (4)                       (4) 
---------------  ------------------  --------------  --------  ------------- 
 

(1) BP Statistical Review of World Energy June 2015 and 2016

(2) Sabarmati Field relinquishment proposal has been submitted to the Government of India and accepted. Awaiting formal approval for the cancellation of the Sabarmati Field PSC.

(3) 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 PT Sumatera Persada Energi (SPE) following the failure of SPE to repay funds due. The assignment has been provided to BPMigas (now SKKMigas) but has not yet been approved or rejected. If Oilex is paid the funds due it will not be entitled to also pursue this assignment.

(4) Ultimate parent entity is Oilex Ltd.

(5) Current status is a Preferred Applicant

LIST OF ABBREVIATIONS AND DEFINITIONS

 
                Barrel/bbl   Standard unit of measurement for all 
                              oil and condensate production. One barrel 
                              is equal to 159 litres or 35 imperial 
                              gallons. 
--------------------------  ------------------------------------------------ 
 MMBO                        Million standard barrels of oil or condensate 
--------------------------  ------------------------------------------------ 
 SCFD                        Standard cubic feet (of gas) per day 
--------------------------  ------------------------------------------------ 
 MSCFD                       Thousand standard cubic feet (of gas) 
                              per day 
--------------------------  ------------------------------------------------ 
 MMSCFD                      Million standard cubic feet (of gas) 
                              per day 
--------------------------  ------------------------------------------------ 
 BBO                         Billion standard barrels of oil or condensate 
--------------------------  ------------------------------------------------ 
 BCF                         Billion Cubic Feet of gas at standard 
                              temperature and pressure conditions 
--------------------------  ------------------------------------------------ 
 TCF                         Trillion Cubic Feet of gas at standard 
                              temperature and pressure conditions 
--------------------------  ------------------------------------------------ 
 Discovered                  Is that quantity of petroleum that is 
  in place                    estimated, as of a given date, to be 
  volume                      contained in known accumulations prior 
                              to production 
--------------------------  ------------------------------------------------ 
 Undiscovered                Is that quantity of petroleum estimated, 
  in place                    as of a given date, to be contained 
  volume                      within accumulations yet to be discovered 
--------------------------  ------------------------------------------------ 
 PSC                         Production Sharing Contract 
--------------------------  ------------------------------------------------ 
 Prospective                 Those quantities of petroleum which 
  Resources                   are estimated, as of a given date, to 
                              be potentially recoverable from undiscovered 
                              accumulations. 
--------------------------  ------------------------------------------------ 
 Contingent                  Those quantities of petroleum estimated, 
  Resources                   as of a given date, to be potentially 
                              recoverable from known accumulations 
                              by application of development projects, 
                              but which are not currently considered 
                              to be commercially recoverable due to 
                              one or more contingencies. 
 
                              Contingent Resources may include, for 
                              example, projects for which there are 
                              currently no viable markets, or where 
                              commercial recovery is dependent on 
                              technology under development, or where 
                              evaluation of the accumulation is insufficient 
                              to clearly assess commerciality. Contingent 
                              Resources are further categorized in 
                              accordance with the level of certainty 
                              associated with the estimates and may 
                              be sub-classified based on project maturity 
                              and/or characterised by their economic 
                              status. 
--------------------------  ------------------------------------------------ 
 Reserves                    Reserves are those quantities of petroleum 
                              anticipated to be commercially recoverable 
                              by application of development projects 
                              to known accumulations from a given 
                              date forward under defined conditions. 
 
                              Proved Reserves are those quantities 
                              of petroleum, which by analysis of geoscience 
                              and engineering data, can be estimated 
                              with reasonable certainty to be commercially 
                              recoverable, from a given date forward, 
                              from known reservoirs and under defined 
                              economic conditions, operating methods 
                              and government regulations. 
 
                              Probable Reserves are those additional 
                              Reserves which analysis of geoscience 
                              and engineering data indicate are less 
                              likely to be recovered than Proved Reserves 
                              but more certain to be recovered than 
                              Possible Reserves. 
 
                              Possible Reserves are those additional 
                              reserves which analysis of geoscience 
                              and engineering data indicate are less 
                              likely to be recoverable than Probable 
                              Reserves. 
 
                              Reserves are designated as 1P (Proved), 
                              2P (Proved plus Probable) and 3P (Proved 
                              plus Probable plus Possible). 
 
                              Probabilistic methods 
 
                              P90 refers to the quantity for which 
                              it is estimated there is at least a 
                              90% probability the actual quantity 
                              recovered will equal or exceed. P50 
                              refers to the quantity for which it 
                              is estimated there is at least a 50% 
                              probability the actual quantity recovered 
                              will equal or exceed. P10 refers to 
                              the quantity for which it is estimated 
                              there is at least a 10% probability 
                              the actual quantity recovered will equal 
                              or exceed. 
--------------------------  ------------------------------------------------ 
 

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/07/96. Origin: Appendix 8. Amended 1/07/97, 1/07/98, 30/09/01, 1/06/10, 17/12/10, 01/05/13.

Name of entity

OILEX LTD

 
ABN                  Quarter ended (current 
                      quarter) 
   50 078 652 632         30 June 2016 
-----------------    ---------------------- 
 
 
 1             Consolidated statement of cash flows 
------------  ---------------------------------------------------------------------------------------------------------------------------- 
                                                                                         Current                          Year to 
                                                                                         quarter                            date 
                                                                                          $A'000                        (12 months) 
                                                                                                                           $A'000 
                                                                          ------------------------------------  -------------------------- 
 Cash flows related to operating 
  activities 
                       Receipts from product 
 1.1                    sales and related debtors                                                          186                         439 
                       Payments for (a) exploration 
 1.2                    and evaluation                                                                   (642)                     (5,724) 
                                              (b) development                                            (783)                     (1,921) 
                                              (c) production                                             (266)                       (984) 
                                              (d) administration (net)                                 (1,142)                     (4,726) 
                                              (d) litigation settlement                                  (490)                       (490) 
 1.3                   Dividends received                                                                    -                           - 
                       Interest and other items 
 1.4                    of a similar nature received                                                         8                          63 
 1.5                   Interest and other costs 
                        of finance paid                                                                      -                           - 
 1.6                   Income taxes paid                                                                     -                           - 
 1.7                   Other - R&D Grant                                                                     -                         325 
--------------------  --------------------------------------------------  ------------------------------------  -------------------------- 
                   Net operating cash flows                                                            (3,129)                    (13,018) 
----------------  ------------------------------------------------------  ------------------------------------  -------------------------- 
 
   Cash flows related to investing 
   activities 
                       Payment for purchases 
                        of: 
                        (a) prospects                                                                        -                           - 
                        (b) equity investments                                                               -                           - 
 1.8                    (c) other fixed assets                                                             (8)                        (46) 
                       Proceeds from sale of: 
                        (a) prospects (refer 
                        2.2 below)                                                                           -                           - 
                        (b) equity investments                                                               -                           - 
 1.9                    (c) other fixed assets                                                               -                         (3) 
                       Loans from/(to) other                                                                 -                           - 
 1.10                   entities 
                       Loans repaid by other                                                                 -                           - 
 1.11                   entities 
 1.12                  Other                                                                                 -                           - 
--------------------  --------------------------------------------------  ------------------------------------  -------------------------- 
                       Net investing cash flows                                                            (8)                        (43) 
--------------------  --------------------------------------------------  ------------------------------------  -------------------------- 
                       Total operating and investing 
 1.13                   cash flows (carried forward)                                                   (3,137)                    (13,061) 
--------------------  --------------------------------------------------  ------------------------------------  -------------------------- 
                                                                                           Current                           Year to 
                                                                                           quarter                             date 
                                                                                            $A'000                         (12 months) 
                                                                                                                              $A'000 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
                     Total operating and investing 
   1.13               cash flows (brought forward)                                                       (3,137)                      (13,061) 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
 
     Cash flows related to financing 
     activities 
                     Proceeds from issues of 
   1.14               shares, options, etc (net)                                                               -                        17,270 
                     Proceeds from sale of                                                                     -                             - 
   1.15               forfeited shares 
                     Proceeds from borrowings                                                                  -                             - 
   1.16               (net) 
   1.17              Repayment of borrowings                                                                   -                             - 
   1.18              Dividends paid                                                                            -                             - 
   1.19              Other                                                                                     -                             - 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
                     Net financing cash flows                                                                  -                        17,270 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
                     Net (decrease) / increase 
                      in cash held                                                                       (3,137)                         4,209 
                     Cash at beginning of quarter/year 
   1.20               to date                                                                              8,136                         1,187 
                     Exchange rate adjustments 
   1.21               to item 1.20                                                                           159                         (238) 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
   1.22              Cash at end of quarter                                                                5,158                         5,158 
  ----------------  ------------------------------------------------------  ------------------------------------  ---------------------------- 
 
   Payments to directors of the entity and                                                                                    Current 
    associates of the directors                                                                                               quarter 
    Payments to related entities of the entity                                                                                 $A'000 
    and associates of the related entities 
  ----------------------------------------------------------------------------------------------------------------  -------------------------- 
                     Aggregate amount of payments to the 
   1.23               parties included in item 1.2                                                                                         140 
  ----------------  ----------------------------------------------------------------------------------------------  -------------------------- 
                     Aggregate amount of loans to the 
   1.24               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                                           Amount available                       Amount used 
                    available                                                           $A'000                              $A'000 
                    Add notes as necessary 
                    for an understanding 
                    of the position. 
  --------------  ---------------------------------------------------- 
   3.1             Loan facilities                                                        -                                   - 
                                                                        ------------------------------------  -------------------------------- 
   3.2             Credit standby arrangements                                            -                                   - 
  --------------  ----------------------------------------------------  ------------------------------------  -------------------------------- 
 
 4               Estimated cash outflows for next                                                                    $A'000 
                 quarter 
                                                                                                            --------------- 
 4.1             Exploration and evaluation                                                                           1,340 
                                                                                                            --------------- 
 4.2             Development                                                                                              - 
                                                                                                            --------------- 
 4.3             Production                                                                                             230 
                                                                                                            --------------- 
 4.4             Administration                                                                                       1,110 
                                                                                                            --------------- 
                 Total                                                                                                2,680 
--------------  ------------------------------------------------------------------------------------------  --------------- 
 5                 Reconciliation of cash 
----------------  ------------------------------------------------------------------------------------------------------------------------ 
 Reconciliation of cash 
  at the end of the quarter 
  (as shown in the consolidated 
  statement of cash flows) 
  to the related items in                                                          Current quarter                  Previous quarter 
  the accounts is as follows.                                                           $A'000                            $A'000 
----------------------------------------------------------------------  ------------------------------------  ---------------------------- 
                   Cash on hand and at 
 5.1                bank                                                                               5,158                         7,620 
 5.2               Deposits at call                                                                        -                           516 
 5.3               Bank overdraft                                                                          -                             - 
 5.4               Other (provide details)                                                                 -                             - 
                                                                        ------------------------------------  ---------------------------- 
                   Total: cash at end 
                    of quarter (item 1.22)                                                             5,158                         8,136 
----------------  ----------------------------------------------------  ------------------------------------  ---------------------------- 
 
 6                 Changes in interests in mining tenements 
                    and petroleum tenements 
---------------- 
                                                                            Nature of              Interest                Interest 
                                                     Tenement                interest             at beginning               at end 
                                                     reference              (note (2))             of quarter              of quarter 
----------------  --------------------------  ----------------------  --------------------  ----------------------  ---------------------- 
 6.1               Interests 
                   in mining 
                   tenements 
                   and petroleum                                            Refer to 
                   tenements                                                 Permit 
                   relinquished,                                            Schedule 
                   reduced or                                             in Quarterly 
                   lapsed                                                    Report 
----------------  --------------------------  ----------------------  --------------------  ----------------------  ---------------------- 
 6.2               Interests 
                   in mining 
                   tenements                                                Refer to 
                   and petroleum                                             Permit 
                   tenements                                                Schedule 
                   acquired                                               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. 
----------------  ------------------------------------------------------------------------------------------------------------------------ 
                                                                                                     Issue                 Amount 
                                                         Total                 Number                price                 paid up 
                                                         number                 quoted            per security           per 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                  1,180,426,999         1,180,426,999             Various                         - 
                                                ----------------------  --------------------  ------------------  ------------------------ 
 7.4               Changes during 
                    quarter 
                   (a) Increases 
                    through rights 
                    issue or placement                               -                     -                   -                         - 
                   (b) Increases 
                    through employee 
                    performance 
                    rights issues                                    -                     -                   -                         - 
                   (c) Increases 
                    through issues 
                    (options exercised)                              -                     -                   -                         - 
                   (d) Decreases                                     -                     -                   -                         - 
                    through returns 
                    of capital, 
                    buy-backs 
----------------  ----------------------------  ----------------------  --------------------  ------------------  ------------------------ 
                                                                                                                            Amount 
                                                                                                       Issue                  paid 
                                                         Total                  Number                 price                 up per 
                                                         number                  quoted             per security            security 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
 7.5               +Convertible 
                    debt securities 
                    (description)                                    -                       -                   -                       - 
                                                ----------------------  ----------------------  ------------------  ---------------------- 
 7.6               Changes during 
                    quarter 
                    (a) Increases 
                    through issues                                   -                       -                   -                       - 
                   (b) Decreases 
                    through securities 
                    matured, converted                               -                       -                   -                       - 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
                                                                                                     Exercise               Expiry 
 7.7               Options                                                                             price                  date 
                                                ----------------------  ----------------------  ------------------  ---------------------- 
                   (description 
                    and conversion 
                    factor) 
 
 
                                                             2,000,000                       -               $0.15              04/11/2016 
                                                             2,000,000                       -               $0.15              11/11/2016 
                                                             3,000,000                       -               $0.15              05/12/2016 
                                                               500,000                       -               $0.25              27/06/2017 
                                                               875,000                       -               $0.25              05/08/2017 
                                                             1,500,000                       -               $0.25              25/08/2017 
                                                             2,000,000                       -               $0.25              11/11/2017 
                                                             5,000,000                       -               $0.10              22/12/2017 
                                                               500,000                       -               $0.25              16/02/2018 
                                                               875,000                       -               $0.35              05/08/2018 
                                                               500,000                       -               $0.35              16/02/2019 
                                                             1,500,000                       -               $0.35              25/08/2019 
                                                ----------------------  ---------------------- 
                   Total                                    20,250,000                       - 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
 7.8               Issued during                                     -                       -                   -                       - 
                    quarter 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
 7.9               Exercised during                                  -                       -                   -                       - 
                    quarter 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
                   Expired during 
 7.10               quarter                                    500,000                       -               $0.15              27/06/2016 
                                                               200,000                       -               $0.25              05/08/2017 
                                                               200,000                       -               $0.35              05/08/2018 
----------------  ----------------------------  ----------------------  ----------------------  ------------------  ---------------------- 
 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. 

Mark Bolton

CFO & Company Secretary

Date: 29 July 2016

This information is provided by RNS

The company news service from the London Stock Exchange

END

DRLPGUMUMUPQUWB

(END) Dow Jones Newswires

July 29, 2016 02:00 ET (06:00 GMT)

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