India Okays Oilex's Interests in PSCs

Oilex Ltd said that it has received the approval of the Government of India for the assignment of 40% participating interests in the Bhandut and Sabarmati fields production sharing contracts (PSCs) and additional 15% net participating interest in the Cambay Field PSC. The interests were acquired from Niko Resources Ltd under an agreement that was made in February 2006.

Bhandut Field

Oilex is Operator of Bhandut Field with 40% participating interest. The field is located near to the Lakshmi, Gauri and Hazira Fields that are producing gas and oil from reservoir intervals similar to those intersected in the Bhandut wells. The Bhandut Field has produced about 700,000 barrels of oil since 1993. In 2002, Bhandut Field was producing oil at rates of about 400 barrels per day ('bopd') before suffering likely formation damage incurred during workover activities at which time the average daily rate declined to the current rate of about 20 bopd per well from 2 wells.

Oilex contends that there is an excellent chance of improving the production rate with the application of modern technology based on new, high resolution seismic data and a contract has been awarded to Geofizyka Toru, the same contractor that acquired the Cambay 3D survey, for the acquisition of 18.4 sq kms of 3D seismic data over the Bhandut block area. Acquisition is expected to be completed by the end of February 2007. These data will be used to refine Oilex's redevelopment plan for the field. Currently two wells are planned to be drilled after the monsoon season early in fourth quarter 2007.

Sabarmati Field

Oilex is Operator of Sabarmati Field with 40% participating interest. This field is located on the outskirts of Ahmedabad, the largest city in Gujarat and covers an area of 6 km2. The Sabarmati discovery well that was drilled in 1984 by ONGC was located without the benefit of seismic data, on the southern end of a prominent anticlinal trend of producing fields to the immediate north of the block. With the exception of part of a single vintage seismic line, there are no seismic data on the block. Oil has been produced intermittently, at low rates from an Eocene interval in Sabarmati-1, the only well on the block.

Oilex is investigating the possibility of acquiring a seismic survey over the block in first half 2007. This survey, together with studies of the potential increase in production capacity of the Sabarmati-1 well, will provide the basis for further drilling, if justified, later this year.

Cambay Field

Oilex is Operator of Cambay Field with 45% participating interest. The 3D seismic survey acquired by Geofizyka Toru late last year over the entire contract area (160 km2) has been processed and the interpretation of 10 horizons is near to conclusion. An update on the forward work program at Cambay will be provided later this month.

Participants in the Cambay PSC are:

                           Previous    Current   
                           Interest    Interest                          
Oilex Ltd (Operator)       30.00% 1    45%
Gujarat State 
Petroleum Corp. Ltd (GSPC) 46.67% 2    55%
Niko Resources Ltd         23.33%      0%                   

 1. Oilex acquired an additional 23.33% equity interest in the PSC from Niko,
 2. GSPC acquired an additional 8.33% equity interest in the PSC from Oilex.

Participants in the Bhandut PSC are:

                        Previous    Current   
                        Interest    Interest                          
Oilex Ltd (Operator)    0%          40%
GSPC        	        60%         60%

Participants in the Sabarmati PSC are:

                        Previous    Current 
                        Interest    Interest                          
Oilex Ltd (Operator)    0%          40%
GSPC        	        60%         60%

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