OEX.L Regulatory News (OEX)

Quarterly Report 30 September 2013

Summary

CAMBAY PSC (45% & OPERATOR), ONSHORE GUJARAT, INDIA

· Oilex Ltd agreed to sell a 10% participating interest in the Cambay Production Sharing Contract ("PSC") incorporating its Tight Hydrocarbon Project ("Cambay Project") in Gujarat, India to Magna Energy Limited ("Magna") for US$4 million.

· Magna also has an option to acquire an additional 5% participating interest for US$2 million.

· All significant tenders for Cambay-77H were issued, bids received and technical/commercial evaluations of critical items started including casing, drilling and completion services and fracture stimulation services were undertaken during the quarter.

· Critical items for Cambay-77H procured subsequent to the end of the quarter following technical and commercial evaluations agreed with GSPC.

SPA- 0055 (100% & OPERATOR) CANNING BASIN, WESTERN AUSTRALIA

· As a result of a number of Australian and international energy companies expressing an interest in the area, the Company initiated an internally managed farmout process for SPA-0055, as announced on 25 July 2013.

· Planning and competitive tendering has commenced for an airborne gravity magnetic survey.

· Objection period for interested Native Title parties to object to the grant of SPA-0055 expired on 22 September 2013. Three objections were received with discussions related to the objections commenced.

STP-ETP-0106, STP-ETP-0107 (100% & OPERATOR) CANNING BASIN, WESTERN AUSTRALIA

· Subsequent to the end of the quarter, the Company announced it was successful in its application for gazettal blocks L12-08 and L12-09. The exploration permits awarded are STP-ETP-0106 for discrete area L12-08 and STP-ETP-0107 for L12-09. Including SPA-0055, the combined acreage is 17,840km2 (~4,400,000 acres).

JPDA 06-103 PSC (10% & OPERATOR), OFFSHORE TIMOR SEA

· Oilex Ltd as Operator, on behalf of the Joint Venture Participants to the JPDA 06-103 PSC, submitted to the Autoridade Nacional do Petróleo ("ANP") a request to terminate the PSC by mutual agreement in accordance with its terms and without penalty or claim due to the ongoing uncertainty in relation to security of tenure.

OVERVIEW

Oilex continues its transition to becoming a leading tight oil and gas producer. The company maintains its focus on assets around the Indian Ocean Rim where a clear first mover advantage exists. The Cambay-77H tendering process for the drilling rig and drilling services commenced and is progressing through the Joint Venture contracting and procurement process as planned.

Operations review

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

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

CAMBAY FIELD, GUJARAT, INDIA

(Oilex: Operator and 45% interest *)

During the reporting period:

· The Cambay Field produced 1,316 barrels of oil (592 barrels net to Oilex).

· Oilex Ltd agreed to sell a 10% participating interest in the Cambay Production Sharing Contract ("PSC") US$4 million (a US$200,000 deposit was paid at the time of signing). Magna also has an option to acquire an additional 5% participating interest for an additional payment of US$2 million.

Under the terms of agreement, the funds received are to be applied towards the proportion of the cost to drill the Cambay-77H horizontal well that relates to Oilex's current 45% participating interest in the PSC. Based on the gross estimated well cost of Cambay-77H of approximately US$13 million, it is anticipated that up to 100% of Oilex's current share of the costs will be covered by the funds from Magna.

Unless otherwise mutually agreed, in the event that certain conditions, including the approval of the Government of India having not been satisfied or, where applicable, waived prior to 1 May 2014, the parties have agreed that any initial payments will to the extent practicable be converted to shares in Oilex. The issue of shares will be limited to 19.9% of the enlarged issued Capital at that time with any balance of the investment not satisfied in shares repayable in cash, as approved by shareholders as the EGM held on the 4 October 2013. As at the date hereof no initial payment or any part thereof has been, or is required to be, converted into shares in Oilex.

Subsequent to the end of the Quarter GSPC has waived its pre-emptive right to the 10% PSC interest to be acquired by Magna.

· 13 tender packages (2 were consolidated) related to drilling and completion services were issued with bids received in August and September. Technical bids relating to critical items, drilling and completion and fracture stimulation services have been opened. Subsequent to completion of the commercial bid evaluations and acceptance of the recommendations by the Joint Venture, a firm drilling schedule for Cambay-77H will be compiled.

· Subsequent to the reporting period the critical casing for Cambay-77H was procured with delivery expected in December 2013.

· Following a meeting with the Government during the quarter the Gas Sales Agreement ("GSA") for Cambay-73 future production will require a competitive tendering process to be undertaken to demonstrate an arm's length price structure before endorsement of the GSA is granted. The GSA tenders were issued subsequent to the end of the period. The Joint Venture is ready to commence preparatory work and restart production upon endorsement of the GSA by the Government.

*See note to Asset Schedule

BHANDUT FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

During the reporting period:

· The Company received a final report relating to an isochronal gas production test at Bhandut-3 undertaken earlier in the year as part of the approved work programme and budget.

· Bhandut-3 flowed at a maximum rate of 6.5MMscfd (184,370m3/d) through a 10mm choke with a flowing tubing head pressure of 1,190 psia. The test also confirmed the reservoir sand has a permeability of 124mD, making it a conventional reservoir. The isochronal test was conducted to obtain more precise reservoir performance data as part of attempting to realise value from Bhandut.

· The Contract Area (~6km2) is covered by a 3D seismic survey acquired by Oilex in 2007 and the reservoir section at the well is 3.5m thick with modern well logs. This reservoir section thickness is below seismic resolution and is not present in other nearby Bhandut wells. As such, the lateral extent of the gas sand and in-place gas volumes cannot be accurately estimated from static data at present. Dynamic production test flow and pressure data suggests the best estimate Contingent Resource (100% basis) may be ~250MMscf (~7,000,000m3).

· Oilex is the operator of the Bhandut JV and its attributable 40% interest in the estimated Contingent Resource is ~100MMscf. This volume, together with appropriate low and high estimates, can only be confirmed through further production, which requires appropriate gas sales arrangements are entered into by the Bhandut JV.

· Potential buyers remain interested and are considering the use of compressed natural gas (CNG) bullet trucks for transportation of natural gas from the well head in the field to end users. This provides flexibility to adjust the offtake rate between 0.5-1.0MMscfd to suit the deliverability of Bhandut-3 gas sand over time. Discussions continue towards reaching a similar off-spec GSA as has been signed for Cambay-73 production. Given the uncertainties, Oilex currently ascribes a commercialisation risk factor of 75% to the Contingent Resource estimate.

· At a meeting with the Government during the quarter, Oilex was informed that the same competitive tendering process required at Cambay is also required for Bhandut to demonstrate an arm's length price structure and therefore subsequent to the reporting period Oilex invited tenders to purchase the gas.

SABARMATI FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

· The Sabarmati Field produced 923 barrels of oil (369 barrels net to Oilex) during the reporting period.

SPA-0055 Wallal Graben, CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Farm out process continued during the quarter.

· Objection period for interested Native Title parties to object to the grant of SPA-0055 expired on 22 September 2013. 3 objections were received with discussions related to removal of the objections commenced.

· Planning and competitive tendering for an airborne gravity and magnetic survey has commenced for SPA-0055 and the invitation to tender for the survey were issued subsequent to the reporting period.

STP-ETP-0106, STP-ETP-0107 CANNING BASIN, WESTERN AUSTRALIA

(Oilex: Operator and 100% interest)

· Subsequent to the end of the Quarter, the Company announced that it had been successful in its application for contiguous gazettal blocks L12-08 and L12-09. The exploration permits awarded are STP-ETP-0106 for discrete area L12-08 and STP-ETP-0107 for discrete area L12-09.

· The total area for these permits covers 6,444km2 (~1,600,000 acres) and encompasses the remainder of the Wallal Graben in the onshore Canning Basin, Western Australia.

· Oilex now controls acreage encompassing the entire Wallal Graben, a deep undrilled half graben in one of Australia's premier emerging onshore unconventional basins.

· Airborne gravity and magnetic survey to be undertaken for SPA-0055 may be extended to include STP-ETP-0106 and STP-ETP-0107. These areas have been included in the invitation to tender as mentioned above.

JPDA 06-103, TIMOR SEA

(Oilex: Operator and 10% interest)

During the reporting period:

· Oilex Ltd as Operator on behalf of the Joint Venture Participants to the Joint Petroleum Development Area ("JPDA") 06-103 Production Sharing Contract ("PSC"), submitted to the Autoridade Nacional do Petróleo ("ANP") a request to terminate the PSC by mutual agreement in accordance with its terms and without penalty or claim. The request to terminate arose due to the uncertainty surrounding tenure following the initiation of formal arbitration proceedings by the Timor Leste Government against the Government of Australia to have the Certain Maritime Arrangements in the Timor Sea declared void.

WEST KAMPAR PSC, CENTRAL SUMATRA, INDONESIA

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

· Oilex continues to pursue a commercial resolution to the Joint Venture dispute in parallel with considering options to enforce its Arbitration Award in Jakarta.

 *See note to Asset Schedule

NEW OPPORTUNITIES

During the reporting period:

· The Company continued to review and evaluate suitable tight hydrocarbon projects that are consistent with its Indian Ocean Rim strategy.

CORPORATE

· During the quarter Oilex successfully raised $3.4 million through the placement of 68 million new shares to domestic and international Sophisticated and Professional Investors ("Placement").

· The Placement was priced at $0.05 per share plus a one for two attaching listed option (ASX:OEXO) with a strike price of $0.15 expiring on 7 September 2015.

· The Placement was conducted in two tranches with the first tranche utilising the Company's available 15% capacity under ASX Listing Rule 7.1 raising $1.9m before expenses during the quarter from the issue of 38 million shares.

· The second tranche of 30 million shares raising a further $1.4m before expenses is currently being finalised following shareholder approval at an Extraordinary General Meeting ("EGM") held on the 28 October 2013. At this EGM shareholders also approved the issue of attaching Placement options for the two tranches as well as ratifying the tranche 1 shares issued.

· Proceeds raised from the Placement will be used for costs associated with the Cambay Tight Hydrocarbon Project as well as funding a low level work programme in the Canning Basin and for working capital purposes.

· Administration cash outflows during the quarter were higher than the previous quarter reflecting the payment of one off annual fees such as audit and annual listing costs, as well legal fees associated with the Magna transaction. Overall administration costs remain below expenditure for the previous year

· At the end of the quarter the Company retained cash resources of A$3.3 million (excluding tranche 2 Placement proceeds of $1.4m to be received following the EGM held on the 28 October 2013, and balance of first payment from Magna of US$3.8M which is awaiting the Government of India tax authority processing).

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

(1) Oilex Ltd has agreed to sell a 10% participating interest in the Cambay Production Sharing Contract ("PSC") incorporating its Tight Hydrocarbon Project ("Cambay Project") in Gujarat, India to Magna Energy ("Magna") for a total payment of US$4 million. Magna also has an option to acquire an additional 5% participating interest for a total payment of US$2 million. The sale of the participating interest will be subject to Government approval.

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

LIST OF ABBREVIATIONS AND DEFINITIONS

For further information, please contact:

Competent Person's Statement

Information in this report relating to hydrocarbon reserves or resources has been reviewed and checked by Mr Peter Bekkers B.Sc. (Hons), the Chief Geoscientist of Oilex Ltd who has over 15 years of experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr Bekkers 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 programme 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.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01, 1/6/10, 17/12/10, 01/05/13.

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.

Date: 30 October 2013

CFO & Company Secretary

Print name: Robert Ierace