Sedco Nixes Rig Contract for Oilex's JPDA Wells in the Timor Sea

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Drilling contractor Sedco Forex International Inc (Sedco) has notified Oilex's wholly owned subsidiary Oilex (JPDA 06-103) Limited that it has elected to terminate the agreements between them for the drilling of exploration wells using the Transocean Legend semisubmersible drilling rig in contract area JPDA 06-103 in the Joint Petroleum Development Area (JPDA) between Australia and Timor Leste.

Oilex and the JPDA 06-103 Joint Venture parties have no further financial obligations to Sedco arising out of the termination.

Oilex is well positioned to conclude its farm-out negotiations to assist in funding the drilling of the required wells under the PSC, subject to the availability of a suitable replacement drilling rig.

Oilex is actively seeking an alternate rig and is working with the regulatory authorities in Dili, Timor Leste to obtain an extension of time to the exploration period under the Production Sharing Contract to drill the required wells.

The termination of the drilling contract with the Oilex Joint Venture by Sedco follows Sedco's earlier termination of the drilling agreement with Nexus Energy WA Proprietary Limited. Nexus, Sedco and Oilex had entered into a Cooperation Agreement in September 2008 which provided for Nexus and Oilex to use the Transocean Legend on back-to-back drilling programs. Under the Cooperation Agreement Sedco had the right to terminate the Oilex drilling agreements if the Nexus drilling agreement had been terminated.

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