Oilex Updates on Austral-Asian E&P Activities

During the Quarter, Oilex drilled the first two exploration wells (Loré-1 and Lolotoe-1) in the Timor Sea JPDA 06-103 contract area. Neither well encountered hydrocarbons in commercial quantities. Oilex was free carried up to an agreed cap through these two wells under a previously announced farm-out agreement with Japan Energy Corporation.

Although the results from these initial wells were disappointing, the JPDA 06-103 block remains an attractive offshore oil exploration block with over 20 additional prospects identified with the potential to host significant oil reserves. The Block is located near to a number of existing producing fields as well as Eni's recent Kitan oil discovery. Further exploration drilling is planned for later in 2010.

In Australia, 3D seismic reprocessing and interpretation continued during the Quarter on the WA-388P block, which is located outboard of North West Shelf, Pluto, Wheatstone and Gorgon fields, offshore Western Australia. The initial results of the seismic interpretation were encouraging and the block could become an emerging exploration asset.

Oilex's investment in West Kampar, Indonesia remains on hold. The Company continues to pursue a resolution to the Joint Venture dispute. Oilex remains well positioned to resume the West Kampar work program including further appraisal of the Pendalian discovery.

During the Quarter, Oilex strengthened its cash position by completing a A$10.1 million share placement. At the same time, the Company's Indian operations continued to maintain production and generated small positive cash flows. Net corporate overhead costs continue to be closely monitored. Oilex is seeking to strengthen its asset portfolio and is currently considering a number of potential opportunities.
 

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