Oilex Sells Queensland Assets to Bow Energy

Oilex NL has signed Share Sale & Purchase Agreements for the sale to Bow Energy Ltd of its onshore Queensland oil and gas permit interests in the Bowen-Surat and Cooper-Eromanga Basins.

As consideration for the sale of the assets, Oilex will be issued with 15 million fully paid ordinary shares and 15 million options to purchase Bow shares at 50 cents per share on or before 5 years from the issue date. When the transaction is completed, Oilex will be the largest shareholder in Bow. The sale is subject to shareholder approval and completion of the due diligence process. The effective date of sale is August 24, 2006 with settlement to be effected by October 31, 2006. The shares will be subject to voluntary escrow for a period of 2 years from the date of issue.

Bow has an excellent exploration, engineering and management team as well as a Queensland oil exploration and production focus. Bow also has an expanding and comprehensive Queensland geological database. By concluding this agreement with Bow, Oilex shareholders will benefit from Bow's expertise and share in any price appreciation of Bow's shares in the event of successful drilling by Bow on the permit areas that are being sold by Oilex and on Bow's existing exploration permits. Bow has advised that it plans to participate in several high oil potential wells on their permits during the next 12 months.

The divestment of the Queensland permit interests is consistent with the strategy outlined previously by Oilex; that is to acquire material exploration and production assets in Australia and to develop a strong position in oil and gas exploration and production in the prospective hydrocarbon basins of India and the countries of the Indian Ocean rim. In particular, this arrangement with Bow enables Oilex to concentrate its resources on the development opportunities at Cambay, Bhandut and Sabarmati fields in Gujarat, India and the exploration programs in the Otway Basin, Block 56 in Oman, Permit W05-11 offshore Western Australia and Block 103 in the Joint Petroleum Development Area between Timor-Leste and Australia.

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