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Oilex Ltd September 2020 Quarterly Report

30/10/2020 9:54am

UK Regulatory (RNS & others)


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TIDMOEX

RNS Number : 7676D

Oilex Ltd

30 October 2020

For a printer friendly copy of this announcement, please click on the link below to open a PDF version

http://www.rns-pdf.londonstockexchange.com/rns/7676D_1-2020-10-30.pdf

CAMBAY FIELD, ONSHORE GUJARAT, INDIA

>> The Company's plans to drill two vertical wells are well advanced. Amongst other conditions, these wells are pending finalisation of the settlement with Gujarat State Petroleum Corporation (GSPC) and securing the necessary funding.

>> The Company advises that the sale process being conducted by GSPC for its 55% interest in the Cambay PSC remains ongoing, however, subject to significant delay due to the Covid-19 impact in India.

>> During the quarter, GSPC paid US$0.26m towards outstanding cash calls with a further US$0.13m expected in the December 2020 quarter.

>> Gas production from the Cambay Field is currently shut-in. The Company hopes to reinstate production shortly.

West kampar, indonesia

>> During the quarter, the Company announced substantial progress has been made towards the Company's strategic objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to financing, to recommencing production from the Pendalian Oilfield.

Cooper-Eromanga Basins, Australia

>> On 3 September 2020, the Company reported that the South Australian State Government announced the successful bid for Block CO2019-C (PELA677) (Permit) in the Cooper Eromanga Basin by Cordillo Energy Pty Ltd (Cordillo), a wholly-owned subsidiary of Oilex.

>> On 14 September 2020, the Company announced that it had agreed to amend the Share Purchase Agreement (SPA) with Armour Energy Limited (Armour) (ASX:AJQ), to extend the completion date to 15 October 2020

>>

On 15 October 2020, the Company announced the completion of the sale of all its interests in the Cooper-Eromanga Basins to Armour.

BHANDUT FIELD, ONSHORE GUJARAT, INDIA

>> During the quarter, the sale of the Company's 40% participating interest (PI) in Bhandut PSC (Bhandut) was substantially progressed with completion expected shortly.

>> During the quarter, GSPC paid US$0.05m towards outstanding cash calls with a further US$0.03m expected in the December 2020 quarter.

JPDA

>> During the quarter, the Company, in its capacity as Operator, on behalf of the Joint Venture Participants in Joint Petroleum Development Area (JPDA) 06-103 Production Sharing Contract (PSC) in East Timor announced it had executed a Deed of Settlement and Release (Deed) with the Autoridade Nacional Do Petroleo E Minerais (ANPM) to terminate the ongoing arbitration proceedings arising from the termination of the PSC by the ANPM in 2015 and settle all claims and counterclaims between the parties.

CORPORATE

>> On 31 July 2020, the Company announced an equity capital raising to secure funding of GBP0.25 million (AUD0.5 million)

   >>   Cash resources as at 30 September 2020 were A$0.51 million. 

OVERVIEW

The Company's primary objective is to maximise shareholder value from its principal asset in the Cambay Basin, located onshore Gujarat State in India, whilst also continuing to review other opportunities to create value and diversify risk by adding new assets to the Company's project portfolio which to date focussed on the Cooper-Eromanga Basins in Australia (which is now subject to a conditional disposal) and the United Kingdom Continental Shelf (UKCS).

To that end, Oilex continues to evaluate and implement a range of technical programme options to progress its main objective of accessing the significant gas resource present in siltstones in the EP-IV reservoir at the Company's Cambay PSC. North American unconventional drilling, completion, and stimulation technologies have been applied by the Cambay JV over the last six years with positive but commercially modest results and work is underway to optimise results for future work programmes. The current work programmes are focused on:

-- Implementing the settlement agreement reached with Gujarat State Petroleum Corporation (GSPC) to resolve the dispute over the Cambay PSC, and further develop the asset with a new partner;

-- Preparing detailed work programmes, including new wells for implementation under the approved Field Development Plan (FDP),

   --        Arranging the necessary funding to implement the planned work programme; and 
   --        Progressing the Company's new ventures in the Cooper-Eromanga Basins and the UKCS. 

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

No lost time incidents were recorded during the quarter.

CAMBAY FIELD, GUJARAT, INDIA

(Oilex: Operator and 45% interest)

Oilex holds a 45% PI in the Cambay Field, with GSPC holding the remaining 55% PI.

The Company's plans at Cambay are well advanced and include the drilling of up to two vertical wells, subject to, inter alia, securing the necessary funding.

The priority will be to test the drilling and stimulation recommendations from the Baker Hughes-GE study in the EP-IV zone. Any early production will utilise the existing processing and storage facilities, which will be upgraded as required to provide a low-cost path to commercialisation. Given success, a larger drilling programme will follow, with the aim of aggregating sufficient production volumes to connect to the high-pressure pipelines which would offer greater offtake stability and improved gas prices.

The re-commencement of field operations is, amongst other matters, dependent on finalisation of the settlement agreed with GSPC and necessary financing. Furthermore, u pon the removal of the applicable Covid-19 restrictions in India, the Company will review the planned work programme and update the market at that time.

Sale Process for Cambay PSC

On 9 September 2019, the Company announced that it had reached a settlement with GSPC which, upon completion, will resolve the ongoing Cambay PSC dispute. Pursuant to the settlement, Oilex and GSPC have agreed that GSPC's 55% PI in Cambay PSC would be subject to a sale process.

During the quarter, the Company advised that the sale process being conducted by GSPC for its 55% interest in the Cambay PSC continues. The Company highlights that the sale process of GSPC's PI is internal and confidential to GSPC. The sale has been and continues to be, subject to significant delays reflecting the impact of Covid-19 on all parties, and India generally. Regular dialogue continues with both GSPC and the requisite representatives of the Government of India (GoI) to bring these efforts to a positive conclusion.

The Company also notes that the settlement agreement with GSPC has not waived the unpaid cash calls and, accordingly, the Company maintains its rights under the JOA.

Environmental Clearance

The Company is presently in the final stages of obtaining a new environmental clearance from the Ministry of Environment and Forest and Cabinet Committee to supercede the previous clearances already obtained under the previous regulatory requirements. The clearances are necessary to recommence production at Cambay and in support of the planned drilling programme at Cambay. Presently, an Environmental Impact Assessment has been prepared by the Company's independent consultants and is pending submission to the applicable authorities and following public hearings. The public hearings are delayed due to the continued 'lockdown' on account of Covid-19.

Following receipt of the necessary environmental clearances, production from well C-73 and C-77H are on standby for re-commencement.

Joint Venture Management

During the quarter, Oilex received US$0.26m towards outstanding cash calls from its Joint Venture partner. Total outstanding cash calls from GSPC - Est. USD$5.5 million (inclusive of the Est. USD$3.054 million pursuant to the Event of Default (EoD) issued in 2018).

During the quarter, Oilex received US$0.26 million from GSPC towards outstanding cash calls with a further estimated US$0.13 million anticipated to be received in the December 2020 quarter.

BHANDUT FIELD, GUJARAT, INDIA

(Oilex: Operator and 40% interest)

Oilex holds a 40% equity interest in the Bhandut Field, with GSPC holding the remaining PI. Previous drilling in the Bhandut Field intersected a number of hydrocarbon zones, some of which produced historically and are now shut-in.

The field is currently on care and maintenance and has existing production facilities. The WP&B 2020-21 has been submitted to the Director General of Hydrocarbons for approval.

On 28 January 2020, Oilex announced that it had accepted an offer from Kiri to acquire the Company's PI in Bhandut. Pursuant to the Agreement entered with Kiri, the Company will receive US$0.29 million in cash proceeds for the sale of its PI and transfer of operatorship rights to Kiri. Furthermore, Kiri has expressed an interest in engaging the services of Oilex's office to review field production, stabilize operations, and initiate field re-development of the Bhandut PSC in accordance with the FDP. Bhandut is presently shut-in and has been fully provided for in the Oilex financial statements as at 30 June 2019.

The sale of the Bhandut PSC is nearing completion with only transfer by the GoI now required. The Company continues to assist the new buyer, Kiri and Company Logistics Private Limited, in finalising the transaction and with its future activities in the PSC under a contract arrangement.

During the quarter, GSPC paid US$0.05 million towards outstanding cash calls from its Joint Venture partner with a further estimated US$0.31 million anticipated to be received in the December 2020 quarter.

Cooper-Eromanga Basins

Sale of Cooper Eromanga Basin Assets

On 15 October 2020, Oilex announced the completion of the sale of all of its interests in the Cooper-Eromanga Basins to Armour Energy Limited (Armour) (ASX:AJQ). Pursuant to the Share Purchase Agreement (SPA), Armour has now acquired 100% of the issued capital of CoEra Limited (CoEra), a wholly-owned Company subsidiary which holds all of Oilex's interests in the Cooper-Eromanga Basins.

The Company's interests in the Cooper-Eromanga Basin comprise:

-- 79.33% direct interest in two Petroleum Exploration Licences (PEL 112 and PEL 444) with an option to acquire the remaining 20.67%;

-- right to acquire 27 Petroleum Retention Licences from Senex Limited (Northern Fairway PRLs); and

   --       successful bid Block CO2019-C (PELA 677). 

As consideration for the acquisition of Oilex's interests in Cooper-Eromanga Basins, Armour issued 22.05 million Armour shares to Oilex, being Oilex's share of the Tranche 1 consideration. Armour has also reimbursed Oilex in cash for past costs of A$125,000.

Furthermore, if after 60 days from completion the closing Volume Weighted Price Average of Armour shares trading on the ASX falls below $0.037 then Armour shall be required to issue such additional shares in itself (Adjustment Shares) to Oilex, or its nominee to ensure Oilex receives a consideration value of A$906,500, subject to the maximum in Adjustment Shares of ten (10) million Armour shares. Oilex is entitled to receive 90% of this Tranche 2 consideration.

The shares issued as consideration by Armour are subject to a 12-month voluntary escrow from the date of

completion.    In addition, Armour has reimbursed Oilex, in cash, for past costs of A$125,000. 

United Kingdom Continental Shelf

East Irish Sea

On 23 December 2019, the Company announced that it had entered into a binding term sheet to acquire a 100% participating interest in the Doyle-Peel licence (P2446) in the East Irish Sea (EIS), offshore the United Kingdom.

The Company advised on 15 March 2020 that it agreed to the following amendments to the agreement with Burgate Exploration and Production Ltd ("Burgate") regarding the acquisition of the Doyle-Peel licence (P2446):

-- the completion of the acquisition of the P2446 licence, subject to the applicable conditions precedent, extended from 30 June 2020 to 31 December 2020; and

-- the issue of the share consideration for the acquisition of Doyle-Peel is subject to shareholder approval under Listing Rule 7.1.

Doyle-Peel Project Overview

The EIS licences are in a proven gas fairway in the centre of the East Irish Sea Basin in shallow water near existing infrastructure reducing the complexity, risk, and cost of development. The EIS is a prolific basin that has produced around 8 TCF of gas to date with considerable existing gas production, gathering, processing, and transportation infrastructure. The depth to the target reservoirs is less than 2,000 metres thus providing modest drilling costs.

The licenses lie on the west-dipping graben edge of the Tynwald Fault Zone on the structural trend with the Rhyl and North Morecambe producing gas fields. Historical production from the primary Triassic Ormskirk reservoirs on this trend shows excellent deliverability characteristics.

The Ormskirk sandstones were deposited in a continental fluvial regime which became drier and more aeolian (with a higher proportion of dune sands) towards the top. The regional seal is provided by the evaporites and mudstones of the Mercia Mudstone group which attains a thickness in excess of 1,000 metres across the basin resulting in low seal risk. Gas charge comes from the Carboniferous Coal Measures which underlie much of the basin. A secondary reservoir-seal pair is provided by the Permian Collyhurst sandstone and overlying evaporites.

The Doyle prospect consists of a tilted fault block closed on the up-dip east side by the north-south trending boundary fault of the Tynwald Fault Zone. This fault down throws to the east and the footwall of Ormskirk sandstone juxtaposes Mercia Mudstone salts and shales forming a very effective cross fault seal. There is a clearly defined east-west fault bounding the southern extent. The fault block is distinguished by the strong reflection response shown on the amplitude display.

The Peel prospect is a fault block occupying a structurally similar setting to Doyle and the producing Rhyl gas field. It is fault-bounded to the east by the Tynwald Fault Zone, with effective cross fault and top seal provided by the Mercia Mudstone. To the south and southwest, dykes have been emplaced which would provide near-vertical seals. The amplitude of the Ormskirk reflector is similar in reflection strength to the Rhyl productive area providing the possibility that this indicates a gas charge.

Blocks 113/22a (Doyle) and 113/27e (Doyle and Peel) have been merged into a single licence being P2446. Block 113/22a was awarded in the UK Offshore 31st licensing round whereas block 113/27e was awarded in the 30th round.

Pursuant to the award of the P2446 licence, the committed work programme comprises a firm commitment by October 2021 to obtain and reprocess 50 square kilometres of 3D seismic data, obtain 2,500 kms Aeromagnetic data and complete a Rock Physics study. Following which the Licence has a three-year drill or drop election.

Transaction Overview

Burgate holds a 100% participating interest in Peel-Doyle, in the United Kingdom Seaward Production Licence (P2446, Blocks 113/22a and 113/27e).

Oilex has entered into the Term Sheet to acquire a 100% participating interest in the P2446 licence for consideration of:

   a)         payment of GBP60,000; 

b) issue of 42,500,000 fully paid ordinary shares in Oilex Ltd with a deemed value of GBP85,000; and

   c)         overriding royalty to be paid on the following basis: 

i. 0.5% of actual gross revenue from commercial production up to the point when gross capital expenditures related to the development of the licence have been fully recovered from net cash flows ("Payback"); and

   ii.         following Payback, the royalty to be paid shall be 2.25% of actual gross revenues. 

The completion of the acquisition of the P2446 licence is subject to the following conditions precedent by 31 December 2020:

a) the UK Oil and Gas Authority ("OGA") approving the assignment and transfer of the P2446 licence from Burgate to Oilex;

   b)        the execution of applicable documents necessary to transfer the P2446 licence to Oilex; 
   c)         execution of a royalty agreement in a form acceptable to the parties; and 

d) the issue of the share consideration for the acquisition of Doyle-Peel receiving shareholder approval under Listing Rule 7.1.

JPDA 06-103, TIMOR SEA

(Oilex: PSC Terminated 15 July 2015 - Operator and 10% interest)

In October 2018, the Company announced the Autoridade Nacional Do Petroleo E Minerais (ANPM) had commenced arbitration proceedings against Oilex and its joint venture partners, in regard to the JPDA PSC where Oilex and its joint venture partners in the PSC were subject to a penalty claim of US$17 million (plus interest). Oilex is the Operator of the PSC on behalf of the joint venture.

The arbitration hearing, which was scheduled to commence on 10 February 2020, was subsequently suspended while the parties continue their commercial settlement negotiations. During the quarter the Company, on behalf of the Joint Venture Participants in Joint Petroleum Development Area (JPDA) 06-103 Production Sharing Contract (PSC) in East Timor was pleased to announce it had executed a Deed of Settlement and Release (Deed) with the Autoridade Nacional Do Petroleo E Minerais (ANPM) to terminate the ongoing arbitration proceedings arising from the termination of the PSC by the ANPM in 2015 and settle all claims and counterclaims between the parties. The execution of the Deed sees an amicable conclusion to the arbitration proceedings.

Under the terms of the Deed, Oilex has committed to a settlement of US$800,000 payable in the 2021 and 2022 financial years. The settlement was fully provided in the Company's annual financial statements to 30 June 2019. In addition, the Company has entered into an unsecured loan facility agreement with two of its joint venture partners which further provides the Company with the option, at its sole discretion, to extend the settlement payments

WEST KAMPAR PSC, CENTRAL SUMATRA, INDONESIA

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

During the quarter the Company announced substantial progress has been made towards the Company's strategic objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to financing, to recommencing production from the Pendalian Oilfield.

Following various meetings and correspondence with the Government of Indonesia (GoI) and with the support of our local Indonesian partner, the GoI has advised that our Proposed Direct Bid, through the Joint Study of the West Kampar Region, is declared administratively complete and have recorded it as a proposal for a Direct Offer through a Joint Study as stipulated in ESDM Regulation No. 35 of 2008.

This confirmation from the GoI, which is exclusive to Oilex, provides a pathway to progress the proposed development of West Kampar and provides certain preferential rights in the award of the West Kampar PSC by the GoI. Oilex's interest in the study and ultimate potential award of the PSC will be on a 50-50 joint basis with its local Indonesian partner, PT Ephindo.

Technical work carried out by Oilex and its advisors estimate that the field can be quickly brought back online at 350 to 400 bopd and that significant additional production potential may be possible from infill drilling and also water injection support. The return to production will require careful execution in the field given that it has been shut in since 2016. The oil occurs in five good quality, stacked reservoirs with some stratigraphic complexity, and the application of 3D seismic data which has been acquired but not interpreted should provide a significant improvement in the understanding of the reservoir distribution and future development planning. Access to the data is to be negotiated with the seismic company that acquired it. The oil is of good quality with no or little gas. It is believed that previous production costs can be reduced. A number of exploration opportunities are present both close to the Pendalian field and in the more distant parts of the block, these require further review evaluation.

CORPORATE

Equity Capital Raising

On 10 August 2020, the Company announced it had issued 312,500,000 ordinary shares pursuant to the placement first announced on 31 July 2020. The share issue at GBP0.08 pence per share (0.144 AUD cents per share) was pursuant to an equity capital raising to secure funding of GBP0.25 million (AUD0.5 million (Subscription Shares).

As announced on 31 July 2020, the Company advised that it had issued 15,000,000 unlisted options exercisable at GBP0.08 pence on or before 12 August 2022. The options were issued to advisors pursuant to the equity capital raising.

Cash Balance

At the end of the quarter, Oilex retained cash resources of $0.51 million.

Capital Structure

The shares and options on issue as at 30 September 2020 were as follows:

 
 Ordinary Shares                      4,119,629,999 
 
 Unlisted Options (Exercise Price, 
  Expiry): 
  GBP 0.0036, 24/12/2020                  6,666,667 
  GBP 0.0019, 20/10/2021                 14,802,631 
  GBP 0.0011, 30/06/2021                204,545,455 
  GBP 0.0008, 12/08/2022                 15,000,000 
                                     -------------- 
                                        241,014,753 
                                     -------------- 
 

The above table does not include 113,636,364 options to be issued, subject to shareholder approval, pursuant to the extension of the Series C loan.

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 Joe Salomon, Managing Director employed by Oilex Ltd. Mr Salomon has over 32 years' experience in petroleum geology and is a member of the Society of Petroleum Engineers and AAPG. Mr Salomon 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 Salomon 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.

 
 Board of Directors 
 Paul Haywood                                       Non-Executive Director 
 Joe Salomon                                        Interim Executive Chairman 
                                                    & Managing Director 
 Peter Schwarz                                      Non-Executive Director 
 Mark Bolton                                        Executive Director 
 Company Secretary 
 Mark Bolton                                        Company Secretary 
 Stock Exchange Listing 
 Australian Securities                              Code: OEX 
  Exchange 
 AIM London Stock Exchange                          Code: OEX 
 AIM Nominated Adviser                              AIM Broker 
 Strand Hanson Limited                              Novum Securities Limited 
 Share Registry - Australia 
 Link Market Services Limited 
  Level 12 
  250 St. Georges Terrace 
  Perth WA 6000 Australia 
  Telephone: 1300 554 474 
  Website: 
  http://investorcentre.linkmarketservices.com.au 
 Share Registry - United Kingdom 
 Computershare Investor Services 
  PLC 
  The Pavilions 
  Bridgwater Road 
  Bristol BS13 8AE United Kingdom 
  Telephone: +44 (0) 870 703 6149 
  Website: 
  www.computershare.com 
 
 
 
                              PERMIT SCHEDULE - 30 SEPTEMBER 2020 
  ASSET             LOCATION             ENTITY                 EQUITY     OPERATOR 
                                                                   % 
                  -------------------  ---------------------  ---------  -------------------- 
  Cambay Field      Gujarat, India       Oilex Ltd               30.0      Oilex Ltd 
   PSC (1) 
                  -------------------                                    -------------------- 
    Oilex N.L. 
     Holdings (India) 
     Limited                                                     15.0 
  ----------------------------------------------------------  ---------  -------------------- 
  Bhandut Field     Gujarat, India       Oilex N.L.              40.0      Oilex N.L. 
   PSC                                    Holdings (India)                  Holdings (India) 
                                          Limited                           Limited 
                  -------------------  ---------------------  ---------  -------------------- 
  JPDA 06-103       Joint Petroleum      Oilex (JPDA             10.0      Oilex (JPDA 
   PSC (2)           Development          06-103) Ltd                       06-103) Ltd 
                     Area 
                     Timor Leste 
                     and Australia 
                  -------------------  ---------------------  ---------  -------------------- 
  PEL 112           South Australia,     Holloman Petroleum     79.6667    Holloman Petroleum 
                     Australia            Pty Ltd                           Pty Ltd 
                  -------------------  ---------------------  ---------  -------------------- 
  PEL 444           South Australia,     Holloman Petroleum     79.6667    Holloman Petroleum 
                     Australia            Pty Ltd                           Pty Ltd 
                  -------------------  ---------------------  ---------  -------------------- 
 

(1) During the September 2019 quarter, the Company reached a settlement with GSPC which, upon completion, will resolve the ongoing Cambay Production Sharing Contract (PSC) dispute. Pursuant to the settlement, GSPC has commenced a sale process of its interest in Cambay. The Company has declined its right of first refusal in regard to sale of GSPC's participating interest. Submission of bids for GSPC's PI closed on 23 December 2019.

(2) PSC terminated 15 July 2015.

 
 Barrel/bbl     Standard unit of measurement for all oil and condensate 
                 production. One barrel is equal to 159 litres or 35 
                 imperial gallons. 
-------------  --------------------------------------------------------------- 
 BOEPD          Barrels of oil equivalent per day 
-------------  --------------------------------------------------------------- 
 BOPD           Barrels of oil per day 
-------------  --------------------------------------------------------------- 
 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 estimated, as 
  in place       of a given date, to be contained in known accumulations 
  volume         prior to production 
-------------  --------------------------------------------------------------- 
 Undiscovered   Is that quantity of petroleum estimated, as of a given 
  in place       date, to be contained within accumulations yet to be 
  volume         discovered 
-------------  --------------------------------------------------------------- 
 PSC            Production Sharing Contract 
-------------  --------------------------------------------------------------- 
 Prospective    Those quantities of petroleum which are estimated, 
  Resources      as of a given date, to be potentially recoverable from 
                 undiscovered accumulations. 
-------------  --------------------------------------------------------------- 
 Contingent     Those quantities of petroleum estimated, as of a given 
  Resources      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. 
-------------  --------------------------------------------------------------- 
 

Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

 
 Name of entity 
----------------------------------------------------- 
 OILEX LTD 
 ABN                Quarter ended ("current quarter") 
---------------    ---------------------------------- 
 50 078 652 632     30 SEPTEMBER 2020 
                   ---------------------------------- 
 
 
 Consolidated statement of cash              Current quarter   Year to date 
  flows                                                         (12 months) 
                                                  $A'000           $A'000 
 1.     (a) Cash flows from operating 
         activities 
 1.1    Receipts from customers                            -              - 
 1.2    Payments for 
        (a) exploration & evaluation 
         (if expensed)                                  (94)           (94) 
        (b) development                                    -              - 
        (c) production                                  (56)           (56) 
        (d) staff costs                                (119)          (119) 
        (e) administration and corporate 
         costs                                         (210)          (210) 
 1.3    Dividends received (see note                       -              - 
         3) 
 1.4    Interest received                                  -              - 
        Interest and other costs of 
 1.5     finance paid                                   (25)           (25) 
 1.6    Income taxes paid                                  -              - 
 1.7    Government grants and tax                          -              - 
         incentives 
        Other (provide details if 
         material) - recovery of prior 
 1.8     period operating costs                          523            523 
                                            ----------------  ------------- 
        Net cash from / (used in) 
 1.9     operating activities                             86             86 
-----  -----------------------------------  ----------------  ------------- 
 
 2.     Cash flows from investing 
         activities 
 2.1    Payments to acquire: 
        (a) entities                                       -              - 
        (b) tenements                                      -              - 
        (c) property, plant and equipment                  -              - 
        (d) exploration & evaluation                       -              - 
         (if capitalised) 
        (e) investments                                    -              - 
        (f) other non-current assets                       -              - 
 2.2    Proceeds from the disposal 
         of: 
        (a) entities                                       -              - 
        (b) tenements                                      -              - 
        (c) property, plant and equipment                  -              - 
        (d) investments                                    -              - 
        (e) other non-current assets                       -              - 
 2.3    Cash flows from loans to other                     -              - 
         entities 
 2.4    Dividends received (see note                       -              - 
         3) 
 2.5    Other (provide details if                          -              - 
         material) 
                                            ----------------  ------------- 
 2.6    Net cash from / (used in)                          -              - 
         investing activities 
-----  -----------------------------------  ----------------  ------------- 
 
 3.     Cash flows from financing 
         activities 
        Proceeds from issues of equity 
         securities (excluding convertible 
 3.1     debt securities)                                546            546 
 3.2    Proceeds from issue of convertible                 -              - 
         debt securities 
 3.3    Proceeds from exercise of                          -              - 
         options 
        Transaction costs related 
         to issues of equity securities 
 3.4     or convertible debt securities                 (38)           (38) 
 3.5    Proceeds from borrowings                           -              - 
 3.6    Repayment of borrowings                        (250)          (250) 
 3.7    Transaction costs related                          -              - 
         to loans and borrowings 
 3.8    Dividends paid                                     -              - 
 3.9    Other (provide details if                          -              - 
         material) 
                                            ----------------  ------------- 
        Net cash from / (used in) 
 3.10    financing activities                            258            258 
-----  -----------------------------------  ----------------  ------------- 
 
 4.     Net increase / (decrease) 
         in cash and cash equivalents 
         for the period 
        Cash and cash equivalents 
 4.1     at beginning of period                          160            160 
        Net cash from / (used in) 
         operating activities (item 
 4.2     1.9 above)                                       86             86 
 4.3    Net cash from / (used in)                          -              - 
         investing activities (item 
         2.6 above) 
        Net cash from / (used in) 
         financing activities (item 
 4.4     3.10 above)                                     258            258 
        Effect of movement in exchange 
 4.5     rates on cash held                                6              6 
                                            ----------------  ------------- 
        Cash and cash equivalents 
 4.6     at end of period                                510            510 
-----  -----------------------------------  ----------------  ------------- 
 
 
 5.    Reconciliation of cash and           Current quarter   Previous quarter 
        cash equivalents                         $A'000            $A'000 
        at the end of the quarter 
        (as shown in the consolidated 
        statement of cash flows) to 
        the related items in the accounts 
 5.1   Bank balances                                    160                133 
 5.2   Call deposits                                      -                  - 
 5.3   Bank overdrafts                                    -                  - 
 5.4   Other (provide details)                            -                  - 
                                           ----------------  ----------------- 
       Cash and cash equivalents 
        at end of quarter (should 
 5.5    equal item 4.6 above)                           160                133 
----  -----------------------------------  ----------------  ----------------- 
 
 
 6.      Payments to related parties of the entity       Current quarter 
          and their associates                                $A'000 
         Aggregate amount of payments to related 
          parties and their associates included in 
 6.1      item 1                                                       65 
                                                        ----------------- 
 6.2     Aggregate amount of payments to related                        - 
          parties and their associates included in 
          item 2 
                                                        ----------------- 
 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly 
  activity report must include a description of, and an explanation 
  for, such payments 
------------------------------------------------------------------------- 
 

Director's fees, consulting fees and superannuation.

 
 7.    Financing facilities                 Total facility      Amount drawn 
        Note: the term "facility'          amount at quarter    at quarter end 
        includes all forms of financing           end               $A'000 
        arrangements available to               $A'000 
        the entity. 
        Add notes as necessary for 
        an understanding of the sources 
        of finance available to the 
        entity. 
 7.1   Loan facilities                                   632               560 
                                         -------------------  ---------------- 
 7.2   Credit standby arrangements                         -                 - 
                                         -------------------  ---------------- 
 7.3   Other (please specify)                              -                 - 
                                         -------------------  ---------------- 
 7.4   Total financing facilities                        632                 - 
                                         -------------------  ---------------- 
 
       Unused financing facilities available at 
 7.5    quarter end                                                         72 
                                                              ---------------- 
 7.6   Include in the box below a description of each facility 
        above, including the lender, interest rate, maturity date 
        and whether it is secured or unsecured. If any additional 
        financing facilities have been entered into or are proposed 
        to be entered into after quarter end, include a note providing 
        details of those facilities as well. 
----  ------------------------------------------------------------------------ 
      Loan facility details: 
        *    Series C facility GBPGBP125,000: Lender- Republic 
             Investment Management Pte Ltd, fully drawn 15 April, 
             interest rate 5%, unsecured, repayment date extended 
             to 31 October 2020. 
 
 
        *    Series D facility GBPGBP225,000: Lender- Lombard Bank 
             Malta plc, amount drawn at quarter end GBPGBP185,000, 
             interest rate 5%, unsecured, repayment date 31 March 
             2021. 
 
 
 8.    Estimated cash available for future operating               $A'000 
        activities 
       Net cash from / (used in) operating activities 
 8.1    (Item 1.9)                                                     86 
 8.2   Capitalised exploration & evaluation (Item                       - 
        2.1(d)) 
 8.3   Total relevant outgoings (Item 8.1 + Item                       86 
        8.2) 
 8.4   Cash and cash equivalents at quarter-end                       510 
        (Item 4.6) 
 8.5   Unused finance facilities available at quarter-end              72 
        (Item 7.5) 
 8.6   Total available funding (Item 8.4 + Item                       582 
        8.5) 
       Estimated quarters of funding available 
 8.7    (Item 8.6 divided by Item 8.3)                               6.76 
----  ---------------------------------------------------------- 
 8.8   If Item 8.7 is less than 2 quarters, please provide answers 
        to the following questions: 
       1. Does the entity expect that it will continue to have 
        the current level of net operating cash flows for the 
        time being and, if not, why not? 
      ------------------------------------------------------------------- 
       Answer: Following the onset of Covid-19, the Company has 
        substantially restructured its operating overheads. These 
        cost-saving measures are anticipated to remain in place 
        for a minimum of the next two quarters. 
      ------------------------------------------------------------------- 
       2. Has the entity taken any steps, or does it propose 
        to take any steps, to raise further cash to fund its operations 
        and, if so, what are those steps and how likely does it 
        believe that they will be successful? 
      ------------------------------------------------------------------- 
       Answer: The company anticipates receiving cash proceeds 
        of US$0.29 million in regard to the sale of Bhandut shortly 
        and further proceeds from cash calls. Further equity capital 
        raisings will be considered in the December 2020 or March 
        2021 quarter, if required. 
      ------------------------------------------------------------------- 
       3. Does the entity expect to be able to continue its operations 
        and to meet its business objectives and, if so, on what 
        basis? 
      ------------------------------------------------------------------- 
       Answer: Yes. The Company has limited operating expenditure 
        planned for the next two quarters as summarised below: 
 
        India - The Company is in the final stages of implementing 
        its Cambay settlement agreement with GSPC with field activities 
        suspended pending completion of this settlement. 
        UKCS - The Company is awaiting government approval for 
        the transfer of the Doyle-Peel licences by the OGA with 
        no activities planned pending the transfer. 
        Cooper - The Company has completed the disposal of its 
        interests in the Cooper Basin assets with no material 
        expenditure projected in the future. 
      ------------------------------------------------------------------- 
 

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

   2        This statement gives a true and fair view of the matters disclosed. 
   Date:                30 October 2020 

Authorised by: Mark Bolton - Executive Director

(Name of body or officer authorising release - see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

Rule 5.5

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END

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October 30, 2020 05:54 ET (09:54 GMT)

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