Oilex Reports on Quarterly Operations in Oman, India

Oilex continued to focus during the June 2009 Quarter on restructuring its assets and operations to reduce costs, maintain production revenues and assess opportunities that may provide early production with positive cash flows. The Company has initiated a detailed technical and commercial review of its appraisal and development operations both in Oman and in India following the result from the Cambay-75 appraisal well that was drilled during the Quarter. The Indian operations accounted for net oil production of 15,229 barrels for the Quarter and are cash flow positive.

The company continues to work towards concluding agreements in the offshore drilling project in block JPDA 06-103 in the Joint Petroleum Development Area (JPDA) of the Timor Sea and the West Kampar PSC in Indonesia. A prime focus for the Company is to complete the proposed farm-out of part of its 25% interest in the JPDA block to reduce its financial exposure. This is a highly attractive offshore oil exploration opportunity with the potential to host significant oil resources near to existing producing fields and ENI's Kitan-1 oil discovery.

Oilex is continuing to take all possible measures to resolve the Joint Venture issues in the West Kampar PSC, where the Pendalian Field development and exploration program have been temporarily suspended.

OPERATIONS REVIEW

Production

• Total net production from Cambay, Bhandut and Sabarmati Fields was15,229 barrels of oil for the quarter.
• Oil production from the Miocene Basal Sand (MBS) in the Cambay Field, Gujarat (Oilex Operator -- 45%) continues. Cambay-74 and Cambay-64 produced at an average daily rate of approximately 320 BOPD and 1,150 MCFD associated gas.
• Pumps to provide artificial lift in wells Cambay-74 and Cambay-64 are expected to be installed in July to extend the production life of these wells.
• The Cambay-19Z well is also in production from the deeper Eocene oil zone.
• The Cambay Field is also producing intermittently from wells Cambay-72, Cambay-63, Cambay-20 and Cambay-8, while Cambay-73 has been shut in.
• Constraints on the Cambay oil offtake infrastructure have been resolved by adding storage capacity at the field and at the point of sale.
• The India operations have been restructured pending a detailed review of appraisal and development options.

Exploration and Appraisal Drilling

JPDA 06-103, Offshore Joint petroleum development area (Oilex Operator -- 25%)

• Mapping of prospects In JPDA 06-103 contract area was completed during the Quarter and the prospect portfolio was prioritised on the basis of potential resource volume and technical risk. The Joint Venture selected the Loré and Lolotoe prospects, both in water depths of less than 400 metres, as the first two prospects for drilling.
• Prospective oil resources (See definitions p. 5 herein) estimated on 100% basis are given in the table (below) for Loré prospect with a range of 20 - 515 MMSTBO prospective resource (mean 195 MMSTBO) and Lolotoe prospect with a range of 14 - 220 MMSTBO prospective resource (mean 90 MMSTBO). The combined oil prospective resource for the two prospects is 285 MMSTBO.
• The contract entered into by the JV in 2008 for the Transocean Legend semisubmersible drilling rig was terminated unilaterally by the drilling contractor, Transocean following the termination of the drilling program with the same rig initially planned to be undertaken by Nexus prior to the drilling program in JPDA 06-103.
• Every effort is being made by Oilex and the JV to prepare for a major drilling campaign during Q3/Q4 2009 subject to finalising new drilling rig and service contracts. Rig availability has been extensively researched and viable options are being pursued with immediacy. The deep water capability of the Transocean Legend is not required for drilling the Loré and Lolotoe prospects and consequently a wider range of rigs suitable for the initial two well program is available compared to 2008.
• Approvals were sought on various matters from the regulatory authority (ANP) in Dili, Timor Leste, and were either received during the June quarter or expected to be received in the September quarter. An application has been made to the ANP for an extension to the PSC to enable the wells to be drilled under a revised schedule given the circumstances of the cancellation by Transocean of the rig contract.
• While farm-out negotiations for part of Oilex's 25% interest in this block are progressing well, the termination of the Transocean rig contract has delayed completion of the farmout as interested parties have requested information on the replacement rig options and formal agreement to the extension of the initial contract term by ANP. Excellent support has been received from ANP in this regard.

Pendalian Field Appraisal

West kampar Psc, central sumatra (Oilex -- 45% to 67.5%)

Oilex's priorities for this asset remain to:

• Recover approximately US $4.1 million owed to it by the Operator of the PSC, PT Sumatera Persada Energi (SPE), (secured by a charge over 22.5% of the interest held by SPE).
• Ensure transfer of Operatorship to Oilex or an acceptable third party.
• Resume the seismic and drilling work program.
• Acquire the approval of BPMigas, the Indonesian regulatory authority for the Pendalian oil field development project.

SPE and Oilex met in May 2009 to discuss a commercial solution to the issues which involved a sale of SPE's interest to a third party whereby SPE repays its debt to Oilex and Oilex or the third party becomes the operator of the PSC. A number of third parties have expressed an interest and negotiations are proceeding with some of these parties.

Oilex is vigorously pursuing its rights under various legal agreements to recover the funds owed by SPE to Oilex.

All operational activity on the PSC is currently suspended by the Operator pending resolution of commercial and financial disputes within the JV.

Timing as to when these disputed matters will be resolved remains uncertain.

India Exploration and Appraisal

Cambay Field, Gujarat, India (Oilex Operator -- 45%)

• During the Quarter the Cambay-75A appraisal well was drilled to a depth of 1580m. The well was drilled in a separate structural compartment to the west of Cambay-74 production well with the primary target in the MBS reservoir unit. The well was plugged and suspended after encountering good quality reservoir with oil shows and non-commercial gas.
• Cambay Miocene MBS oil -- The results of the Cambay-75 well will be incorporated into the MBS geological model to determine if further potential well locations are technically and commercially attractive.
• Cambay OS II Gas -- gas has been proven at the level of Miocene, Oligocene and Eocene in many of the old wells and in the wells drilled last year at Cambay. The field has previously produced gas from the Oligocene and Miocene. A further desktop evaluation of the commercial and technical aspects of the block's gas potential will be completed. The shallower OS II horizons remain under consideration as part of a potentially viable, small gas project in the eastern part of the block.
• Cambay Eocene Gas / Condensate -- Substantial in-place gas resources remain at Cambay and an evaluation is ongoing to assess the technical potential to enhance recoveries to commercial rates if horizontal wells are utilized together with fracture stimulation. Technical execution risks are considered high and Oilex is considering options to introduce parties with tight gas experience into the opportunity.
• Cambay Basal EPIV / Deccan -- The fractured Deccan basement play remains untested at Cambay following the decision to terminate the drilling of Cambay-74 and to complete the well as an oil producer from the MBS oil zone. The main targets in that well were the deeper Basal EP IV and Deccan Basement which appear from seismic data to be better developed on the western flank of the Western High Block compared to the crestal area where Cambay-19Z and Cambay-73 were drilled.

Other Exploration and Appraisal

WA-388-P Carnarvon basin, offshore Western Australia (Oilex Operator -- 14%)

• Processing of the Rose 3D seismic survey is near completion and final SEG Y seismic data are expected to be available for interpretation during July 2009. Extra effort applied to seismic processing has resulted in significantly better data definition compared to that previously achieved in this area. The JV agreed to apply for a variation to the secondary period work program during early in the June quarter to account for the delay in receiving the seismic data and therefore take a decision on entering into the secondary term and commit to drilling of one well. The application to vary the secondary program was formally lodged with Western Australian Department of Mines and Petroleum on April 15, 2009. The Department approved the variation as requested on June 2, 2009.

Oman, Block 56, South Oman (Oilex Operator -- 25%)

• On behalf of the Joint Venture, Oilex is reviewing the options and priorities for the remainder of the commitment work program, including a possible farm-out.