OEX.L Regulatory News (OEX)

05 November 2014

Cambay-77H - Production test has commenced

· Instrumentation has been successfully deployed downhole

· The production test flow period commenced on 4 November 2014

Oilex Ltd (ASX: OEX, AIM: OEX) is pleased to announce the commencement of the Cambay-77H production test on Tuesday 04 November 2014. Instrumentation has been successfully deployed down hole and will record pressure data for the duration of the test. Upon completion, the instrumentation will be recovered and the data downloaded for analysis.

The test is focused on acquiring long term performance data which is essential for assessment of reservoir properties and will supplement surface data collected during flowback. A 5 day shut-in period preceded the test to allow the well to stabilise after ~ 85 days of flowback production.

The formal test has two (2) distinct sections:

· 300 hour (12.5 days) flow period, where the well will flow on a constant choke size after achieving stable flow soon after opening.

· 300 hour shut-in period, where data will continue to be recorded and monitored. This period may be extended depending upon the well response.

Oilex intends to announce the start of the shut-in period and the successful recovery of the instrumentation and data. An announcement regarding initial test results will be made after a preliminary analysis has been completed.

The production test is the final major field activity for Cambay-77H and when concluded, all the proof of concept objectives will have been successfully completed. Oilex will then focus on putting Cambay-77H into production as soon as possible, as well as incorporating the proof of concept outcomes into the planning for the next drilling campaign

As announced on 31 October 2014, significant outcomes from Cambay-77H have already been achieved and those below should enhance commercialisation of the Cambay Field.

· Oil and gas recovery started on the first day of flowback and gas sales during flowback operations in future wells is possible as the gas market is readily available. This leads to early cash flow and faster payback of well costs.

· The hydrocarbon liquid to gas ratio (LGR) during flowback has been ~100 bbls of liquids per MMscfd of gas. This ratio is 250% higher than expected which if sustained, leads to a much higher unit revenue stream in barrels of oil equivalent (Boe).

 Managing Director of Oilex, Ron Miller, said;

"Cambay-77H is the first horizontal well with multi-stage fracture treatments to successfully be production tested in India. Cambay-77H has also demonstrated that the Cambay Field is amenable to this technology which has now been successfully implemented in India. The flowback and production test results are critical and Oilex is confident that insights from this well, when incorporated into future designs, will lead to optimised production wells. The hydrocarbon liquid content is also very welcome given its positive influence on revenue. We look forward to announcing the flowback operations and production test results subsequent to completing analysis of the test data."

For and on behalf of Oilex Ltd

 Ron Miller

Managing Director

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