Oilex Updates on Operations at Cambay, Bhandut Fields in India

Tendering for the fracture stimulation, flowback and testing services has commenced. These field activities will only commence upon completion of the special tight reservoir core analysis that will be undertaken in North America during 1H 2016 following core recovery from Cambay-78H and 80H wells.

Gas marketing activities continue and focussed on:

• Expanding the low pressure market adjacent to the field. Response has been positive for switching from biomass energy to clean natural gas
• Assessing the high pressure market for accepting lower rates (~5 million standard cubic feet per day or MMscfd) associated with Cambay-78H and Cambay-80H
• Market discovered prices for gas remain reasonably firm compared to the Policy Formula Price despite distressed LNG (liquefied natural gas) cargos in the spot market

Bhandut Field

Field construction continues at Bhandut -- located near to the Lakshmi, Gauri and Hazira fields -- and is 40 percent complete and expected to be completed during November. Gas transportation is the responsibility of the buyer(s), which is currently targeted to be in place prior to end December. Bhandut-3 should be ready to commence production prior to the end of December subject to availability of the interconnecting gas transportation infrastructure. An independent reserve assessment has commenced to support Oilex’s recently upgraded internal estimate and an announcement of the results will be made when they are final. Bandhut-3 is expected to commence plateau production at 100-130 boepd.

Managing Director of Oilex, Ron Miller, said:

"The commencement of field activities to boost production through the workover campaign is another milestone towards our goal of being operationally cash flow positive in India (exclusive of workover and drilling capex) before the end of this calendar year. In addition, the approvals tendering and cost recovery process is nearing completion for the 2015/16 drilling campaign. We are looking forward to Bhandut recommencing production and the final independent reserves report being completed. The gas market in India remains robust driven by market fundamentals and it is important to capture the commercial benefit of lower contractor service prices currently prevalent in the market."