Quarterly Report 30 June 2014

Summary

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

  • Cambay 77-H 4 ½ inch casing set and cemented, well secure for fracture stimulation
  • Stage 1 fracture stimulation successfully completed
  • Gas detected at surface shortly after Stage 1 fracture stimulation with overpressure of ~5000 psi measured indicating pressure increase of 670 psi
  • Sale and Purchase Agreement unwind process triggered, Oilex retains 45% direct interest in the Cambay PSC with Magna Energy Ltd (“Magna”) becoming cornerstone investor in Oilex. Unwind process was then followed by on-market purchases by Magna, resulting in Magna holding a 19.1% interest.
Post end of quarter:
  • Remaining fracture stimulation stages 2-4 successfully completed
  • All plugs successfully milled out
  • Strong clean-up hydrocarbon flow encountered following mill-out operations
  • Light oil/condensate flows to surface during flow-back and recovered for sale
  • Higher than expected light/condensate flows particularly encouraging
  • Gas Sales Agreement for Cambay-73 endorsed by the relevant Government of India authorities
  • The Cambay Joint Venture has made an insurance claim associated with the failure of the frac tree components at Cambay-77H.The order of magnitude estimate is approximately USD 1 million subject to finalising the costs and discussions with underwriters.
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June 2014 Quarterly Report