TIDMOEX
RNS Number : 5624B
Oilex Ltd
31 January 2020
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DECEMBER 2019 quarterly report
CAMBAY FIELD, ONSHORE GUJARAT, INDIA
>> The Company's plans for the 2019-20 work programme and
budget to drill two vertical wells are well advanced. Amongst other
conditions, these wells are pending finalisation of the settlement
with Gujarat State Petroleum Corporation (GSPC) and securing the
necessary funding.
>> Pursuant to the settlement announced in the previous
quarter, GSPC commenced a sale process for its 55% participating
interest (PI) in Cambay.
>> Subsequent to the end of the Quarter, GSPC advised that
it had opened the bids received for its Cambay PI and a preferred
bidder has been identified.
>> The Singapore International Arbitration Commission
(SIAC) refunded S$179,731 (E A$196,000) in arbitration fees paid by
Oilex in relation to the dispute with GSPC over Cambay.
>> During the quarter, GSPC paid INR 10,782,244 (E A$224,000) towards outstanding cash calls.
>> The WP&B 2020-21 was submitted to Director General of Hydrocarbons for approval.
>> Gas production from the Cambay Field is currently
shut-in. The Company hopes to reinstate production shortly.
Cooper-Eromanga Basins, Australia
>> During the quarter the Company announced that the
satisfaction of the condition precedent (including government
approvals) for the completion of the Senex acquisition was extended
by two months to 29 February 2019.
>> Subsequent to the end of the quarter, the Company
announced that it had entered into a binding conditional Heads of
Agreement for the sale of its interests in Cooper-Eromanga Basins
to Doriemus plc.
BHANDUT FIELD, ONSHORE GUJARAT, INDIA
>> The Bhandut Field remains on care and maintenance.
>> The WP&B 2020-21 was submitted to the Director General of Hydrocarbons for approval.
>> During the quarter, GSPC continued with its sale
process for their participating interest in Bhandut. The Company
has a right of first refusal in regard to sale of GSPC's
participating interest.
>> Subsequent to the end of the quarter, the Company
accepted a conditional cash offer for the sale of Bhandut for
US$0.14 million.
>> During the quarter, GSPC paid INR 1,444,962 (E A$30,000) towards outstanding cash calls.
CORPORATE
>> All resolutions were passed on a show of hands at the
Annual General Meeting on 27 November 2019.
>> Cash resources at 31 December 2019 were A$0.4 million.
>> Subsequent to the end of the quarter, the Company
received proceeds of A$330,00 in regard to the conversion of
unlisted options.
>> Subsequent to the end of the quarter the Company
announced the acceptance of a conditional cash offer of US$0.14
million (E A$208,000) for the sale of its 40% participating
interest in Bhandut.
>> The Company is in advanced negotiations to secure a new
unsecured loan facility for GBP350,000 (E A$680,000) which is
expected to be finalised in early February 2020.
OVERVIEW
The Company's primary objective is to maximise shareholder value
from its principal asset in the Cambay Basin, located onshore
Gujarat State in India, whilst also continuing to review other
opportunities to create value and diversify risk by adding new
assets to the Company's project portfolio focussed on the
Cooper-Eromanga Basins in Australia and the United Kingdom
Continental Shelf (UKCS).
To that end, Oilex continues to evaluate and implement a range
of technical programme options to progress its main objective of
accessing the significant gas resource present in siltstones in the
EP-IV reservoir at the Company's Cambay PSC. North American
unconventional drilling, completion and stimulation technologies
have been applied by the Cambay JV over the last six years with
positive but commercially modest results and work is underway to
optimise results for future work programmes. The current work
programmes are focused on:
-- Implementing the settlement agreement reached with GSPC to
resolve the dispute over the Cambay PSC,
and further develop the asset with a new partner potentially;
-- Preparing detailed work programmes, including new wells for
implementation under the approved Field Development Plan (FDP),
-- Arranging the necessary funding to implement the planned work programme; and
-- Progressing the Company's new ventures in the Cooper-Eromanga Basins and the UKCS.
HEALTH, SAFETY, SECURITY AND ENVIRONMENT
No lost time incidents recorded during the quarter.
CAMBAY FIELD, GUJARAT, INDIA
(Oilex: Operator and 45% interest)
Oilex holds a 45% PI in the Cambay Field, with GSPC holding the
remaining 55% PI.
The Company's plans for the 2020-21 work programme and budget
(2021 WP&B) at Cambay are well advanced and include the
drilling of up to two vertical wells, subject to, inter alia,
securing the necessary funding. During the quarter, the 2021
WP&B was submitted to the regulator for approval.
The priority will be to test the drilling and stimulation
recommendations from the Baker Hughes-GE study in the EP-IV zone.
Any early production will utilise the existing processing and
storage facilities which will be upgraded as required to provide a
low-cost path to commercialisation. Given success, a larger
drilling programme will follow, with the aim of aggregating
sufficient production volumes to connect to the high-pressure
pipelines which would offer greater offtake stability and improved
gas prices.
The re-commencement of field operations is, amongst other
matters, dependent on finalisation of the settlement agreed with
GSPC and necessary financing.
Settlement of Joint Venture Dispute
On 9 September 2019, the Company announced that it had reached a
settlement with GSPC to resolve the ongoing Cambay PSC dispute
whereby GSPC undertook to use its best endeavours to complete the
sale of its 55% PI in Cambay. Pursuant to the settlement, the Event
of Default and Event of Withdrawal declared by Oilex with regard to
the Cambay Field Joint Operating Agreement were withdrawn and the
arbitration proceedings, which had been lodged by GSPC with
Singapore International Arbitration Commission, were terminated.
Furthermore, the stay order granted in the High Court of Gujarat
was also removed.
During the December 2019 quarter, GSPC commenced a formal
process for the sale of its 55% PI in the Cambay PSC. The date for
submission of the offers by potential bidders closed on 23 December
2019. Oilex understands that a preferred bidder has been identified
by GSPC, which has now been invited by GSPC to finalise
negotiations before seeking applicable regulatory approvals in
India.
Oilex holds a first right of refusal where GSPC disposes of its
55% interest in the Cambay PSC. The Company notes that the
settlement agreement with GSPC has not waived its rights to the
unpaid cash calls and accordingly, the Company maintains its rights
under the JOA. The Company continues to engage with all parties,
including potential new Cambay joint venture partners, for payment
of the outstanding cash calls.
During the December 2019 quarter, the Company was pleased to
announce Singapore International Arbitration Commission (SIAC) has
refunded S$179,731 (E A$196,000) in arbitration fees paid by Oilex
in relation to the Cambay dispute.
Joint Venture Management
During the December 2019 quarter, Oilex was paid INR10,782,244
(E A$224,000) towards outstanding cash calls from its Joint Venture
partner. Total outstanding cash calls from GSPC - Est. USD$5.6 MM
(inclusive of the Est. USD$3.054 MM pursuant to the Event of
Default (EoD)).
BHANDUT FIELD, GUJARAT, INDIA
(Oilex: Operator and 40% interest)
Oilex holds a 40% equity interest in the Bhandut Field, with
GSPC holding the remaining PI. Previous drilling in the Bhandut
Field intersected a number of hydrocarbon zones, some of which
produced historically and are now shut-in.
The field is currently on care and maintenance and has existing
production facilities. The WP&B 2020-21 has submitted to the
Director General of Hydrocarbons for approval.
During the quarter, GSPC continued its formal process to dispose
of its PI in Bhandut. Oilex has a right of first refusal in the
event that GSPC disposes of its PI.
Subsequent to the end of the quarter, the Company announced that
it had accepted an offer from Kiri and Company Logistics Private
Limited (Kiri) to dispose of its 40% participating interest (PI) in
the Bhandut PSC (Bhandut). Pursuant to the Agreement entered with
Kiri, the Company will receive US$0.14 million in cash proceeds for
the sale of its PI to Kiri.
GSPC had also invited parties to make submissions to acquire its
60% PI in Bhandut with Kiri successfully selected by GSPC as the
preferred bidder. Kiri will acquire Oilex's PI in Bhandut on the
same proportional cost basis as GSPC with a small premium for
Oilex's operatorship in the PSC. Furthermore, Kiri has expressed an
interest in engaging the services of Oilex's office to review field
production, stabilise operations and initiate field re-development
of the Bhandut PSC in accordance with the FDP. Bhandut is presently
shut-in and has been fully provided for in the Oilex financial
statements.
During the quarter, GSPC paid INR 1,444,962 (E USD $20,000) in
cash call payments for Bhandut. At the end of the quarter unpaid
cash calls by GSPC was E USD$0.07 million gross.
Cooper-Eromanga Basins
PEL 112 and PEL 444
During the September 2019 quarter the Company announced that it
had entered into agreements to acquire up to a 100% beneficial
interest in the PEL 112 and 444 licences (the Licences) in the
Cooper-Eromanga Basins in South Australia.
Currently, the Company owns a 79.3333% interest in Licences with
an option to acquire the remaining 20.6667%.
The Licenses are in the South Australia section of the
Cooper-Eromanga Basins. Both blocks are located on extensions of
the Western Flank oil fairway, the most important recent
contributor to oil production in the Cooper Basin. This fairway
hosts over 30% of the Cooper Basin oil reserves and has been a
major industry focus for new drilling and field development over
the last 10 to 15 years. PEL 112 covers 1,086 square kilometres and
PEL 444 covers 1,166 square kilometres. Each PEL is currently in
temporary suspension at the request of the previous License holders
(a provision with the South Australian government where work
obligations may be suspended for a fixed period as the request of
the licence holder). The PEL's carry an obligation to drill one
well each before January 2022 (PEL 112) and January 2023 (PEL 444)
respectively.
Both blocks have modern 3D seismic surveys acquired by Holloman
and its partners; 127 square kilometres in PEL 112 and 80 square
kilometres in PEL 444. Subsequent to the 3D surveys, one
exploration well was drilled in each 3D area; however, neither well
was successful with the structural integrity of the prospects
drilled in question.
Holloman Petroleum Pty Ltd, a wholly owned subsidiary of Oilex,
has been appointed as the current operator of the Licences.
Northern Fairway
On 27 September 2019, the Company announced that it entered into
a legally binding term sheet with Senex Energy Limited (Senex) in
27 PRLs located within the Northern Oil and West Gas Fairway in the
world class Cooper-Eromanga Basins in South Australia (the
"Northern Fairway PRLs"), subject to the satisfaction of conditions
including government approvals by 31 December 2019, subsequently
extended to 29 February 2019.
The Northern Fairway PRLs, cover 2,445 square kilometres
(604,000 acres) and include permits covered by the 792 square
kilometre Cordillo 3D seismic survey acquired by Senex in 2012.
Senex is the operator of each of the Northern PRLs and has agreed
to transfer 100% of its interest in the permits subject to
satisfaction of conditions (including government approvals). The
PRLs are part of the 15-year tenure retention agreement between the
South Australian Government and Senex announced in August 2013.
The PRLs include a 100% interest in the Paning Tight Gas
Discovery made by the Paning-2 exploration well. The Paning Tight
Discovery was made in February 2013 intersecting 117 metres of net
gas pay comprised of 47 metres of net pay in Permian tight sands
and 70 metres of net gas pay in the deep coals in the Patchawarra
Trough. The Paning-2 exploration well was spudded in December 2012
with a side-track reaching a total depth of 3,144 metres and was
drilled following up on the Paning-1 exploration well drilled by
Delhi Petroleum in 1980 which encountered significant gas in the
Permian section. Paning-2 was the first exploration well drilled by
Senex designed specifically to test the potential of the Permian
tight sands sequence that exists across the entire Patchawarra
Trough.
Heads of Agreement with Doriemus Plc
On 29 January 2020, the Company announced that it had signed a
binding conditional Heads of Agreement (HOA) with Doriemus Plc
(Doriemus), an ASX-listed company, for the proposed sale of all of
its interests in the Cooper-Eromanga Basins to Doriemus.
Subject to the terms of the HOA, it is intended that Doriemus
will acquire 100% of the issued capital of CoEra Limited (CoEra), a
wholly owned subsidiary of Oilex (Proposed Transaction). At
completion, CoEra will own all of Oilex's direct and indirect
interests in the Cooper-Eromanga Basins including:
-- 79.33% direct interest in two Petroleum Exploration Licences
(PEL 112 and PEL 444) (with an option, as previously announced, to
acquire the remaining 20.66%); and
-- the right to acquire 27 Petroleum Retention Licences from
Senex Limited (Northern Fairway PRLs).
As consideration for the Proposed Transaction, Doriemus will
issue 28,301,887 CHESS Depositary Interests (CDIs) (representing
28,301,887 shares in Doriemus) to Oilex (or its nominee(s)) upon
completion of the Proposed Transaction. The Company will nominate
2,830,188 CDI's of the abovementioned consideration to Orthogonal
Enterprises Pty Ltd (Orthogonal) for past and future services
rendered in building the Cooper-Eromanga portfolio.
The Doriemus' closing share price of A$0.03 on 28 January 2019
values the net consideration payable to Oilex at A$764,000.
Alternatively, based on Doriemus HY2019 financial statements, the
Net Asset Value is over A$0.09 per Doriemus share valuing the net
consideration payable at A$2.4 million. In addition, Doriemus will
also irrevocably and finally assume the obligations of Oilex under
the Senex Agreement to acquire the Northern Fairway PRLs, namely
the assumption of existing abandonment liabilities, estimated at
$1.1 million, payment of future PRL annual fees and work programme
obligations including exploration well commitments in PEL 112 and
PEL 444.
The CDIs to be issued as consideration for the Proposed
Transaction are subject to voluntary escrow conditions and will
only be able to be disposed of by Oilex and Orthogonal in certain
limited circumstances for a 2-year period following their
issue.
The Proposed Transaction is subject to the satisfaction of
various conditions precedent including, in particular, Doriemus
obtaining shareholder approvals for the issue of various
securities, the completion of a minimum $3.5 million capital
raising by Doriemus, completion of due diligence by each party on
the other party, and the execution of definitive transaction
documentation between Doriemus and Oilex in respect of the Proposed
Transaction. The HOA sets out that these conditions precedent need
to be satisfied by 30 June 2020 or discussions will be
discontinued. Accordingly, whilst both the Board of Directors of
Oilex and Doriemus are confident that the conditions precedent will
be satisfied, there can be no guarantee that they will be, and
therefore there is no guarantee that the Proposed Transaction will
complete.
The ASX has confirmed that Listing Rule 11.1.3 does not apply to
Doriemus in regard to the proposed acquisition and associated
transactions by Doriemus.
CoEra and its subsidiaries were acquired by Oilex after 30 June
2019, and accordingly there was no revenue or earnings attributable
to Oilex for the year ended 30 June 2019. As at 31 December 2019,
the Cooper-Eromanga Basins assets being disposed of by Oilex had an
unaudited carrying value of A$331,000.
Assuming completion of the Proposed Transaction, Oilex will no
longer have any oil and gas asset interests in Australia, and
instead with be focused on further developing its asset base in
India and the UK Continental Shelf (UKCS).
Proposed Doriemus Capital Raising
As part of the Proposed Transaction, Doriemus intends to
undertake a capital raising at a price expected to be $0.035 per
CDI to raise a minimum of $3.5 million and a current proposed
maximum of $5 million (Capital Raising).
It is proposed, subject to agreeing legalities and structuring
mechanics, to include a priority offer to eligible existing
Doriemus and Oilex shareholders (being those Doriemus CDI holders
or Oilex shareholders (whether through Common Shares or depository
interests) with a registered address in the United Kingdom,
Singapore, Australia and New Zealand on the record date, which date
is yet to be determined) for up to $1.5 million ("Priority Offer").
At this stage, the Priority Offer is expected to be made under a
disclosure document prepared by Doriemus in accordance with Chapter
6D of the Corporations Act 2001 (Cth).
It is proposed that participants in the Capital Raising will
also receive one (1) free option for every three (3) CDIs / shares
subscribed for in the Capital Raising. It is further proposed that
the options will be exercisable at A$0.08 on or before four years
from the date of completion of the Proposed Transaction (Attaching
Options). It is currently intended that the Attaching Options will
be listed on the ASX by Doriemus, subject to meeting certain ASX
listing requirements.
United Kingdom Continental Shelf
Knox-Lowry-Whitbeck
During the previous quarter, the Company announced that it had
entered into an exclusivity agreement with Koru Energy (KLW) Ltd
("Koru"), a subsidiary of Koru Energy Limited, for a potential
acquisition of up to a 50% relevant interest in the Knox and Lowry,
and Whitbeck gas discoveries (the "KLW Gas Discoveries") in the
East Irish Sea (EIS), offshore the United Kingdom ("Exclusivity
Agreement").
Oilex entered into the Exclusivity Agreement which was
subsequently extended until 31 October 2019 with Koru to secure a
right to negotiate with Koru to acquire a 50% interest in the KLW
Licences. The Company has elected to allow the Exclusivity
Agreement to lapse while it engages with several parties in the
basin with a view to expanding the potential portfolio of assets in
the EIS, inclusive of KLW should it continue to be available.
Peel-Doyle (P2447) and Castletown (P2076)
On 23 December 2019, the Company announce that it has entered
into a binding term sheet with Burgate Exploration and Production
Ltd ("Burgate"), to acquire a 100% participating interest in the
Doyle-Peel licence (P2447) in the (EIS), offshore the United
Kingdom ("Term Sheet"). In addition, the Company has entered into
an exclusivity agreement with Burgate, Comtrack (UK) Ltd, and
Simwell Resources Ltd (collectively "BCS") for the potential
acquisition of a 100% participating interest in the Castletown
licence (P2076).
Project Overview
The EIS licences are in a proven gas fairway in the centre of
the East Irish Sea Basin in shallow water near existing
infrastructure reducing the complexity, risk and cost of
development. The EIS is a prolific basin which has produced around
8 TCF of gas to date with considerable existing gas production,
gathering, processing and transportation infrastructure. The depth
to the target reservoirs is less than 2,000 metres thus providing
modest drilling costs.
The licenses lie on the west dipping graben edge of the Tynwald
Fault Zone on the structural trend with the Rhyl and North
Morecambe producing gas fields. Historical production from the
primary Triassic Ormskirk reservoirs on this trend show excellent
deliverability characteristics.
The Ormskirk sandstones were deposited in a continental fluvial
regime which became drier and more aeolian (with a higher
proportion of dune sands) towards the top. The regional seal is
provided by the evaporites and mudstones of the Mercia Mudstone
group which attains a thickness in excess of 1,000 metres across
the basin resulting in low seal risk. Gas charge comes from the
Carboniferous Coal Measures which underlie much of the basin. A
secondary reservoir-seal pair is provided by the Permian Collyhurst
sandstone and overlying evaporites.
Doyle-Peel Prospects
The Doyle prospect consists of a tilted fault block closed on
the up dip east side by the north-south trending boundary fault of
the Tynwald Fault Zone. This fault down throws to the east and the
footwall of Ormskirk sandstone juxtaposes Mercia Mudstone salts and
shales forming a very effective cross fault seal. There is a
clearly defined east-west fault bounding the southern extent. The
fault block is distinguished by the strong reflection response
shown on the amplitude display.
The Peel prospect is a fault block occupying a structurally
similar setting to Doyle and the producing Rhyl gas field. It is
fault bounded to the east by the Tynwald Fault Zone, with effective
cross fault and top seal provided by the Mercia Mudstone. To the
south and southwest dykes have been emplaced which would provide
near vertical seals. The amplitude of the Ormskirk reflector is
similar in reflection strength to the Rhyl productive area
providing the possibility that this indicates a gas charge.
Blocks 113/22a (Doyle) and 113/27e (Doyle and Peel) have been
merged into a single licence being P2446 ("P2446 Licence"). Block
113/22a was awarded in the UK Offshore 31st licensing round whereas
block 113/27e was awarded in the 30th round.
Pursuant to the award of the P2446 licence, the committed work
programme comprises a firm commitment by October 2021 to obtain and
reprocess 50 square kilometres 3D seismic data, obtain 2,500 kms
Aeromagnetic data and complete a Rock Physics study. Following
which the Licence has a three-year drill or drop election.
Castletown Structure
The Castletown structure is also situated within the Tynwald
Fault zone, just east of the Peel prospect. Well 113/27-2 was
drilled in 1988 and discovered the Castletown gas accumulation in
both Omskirk and St Bees Triassic sandstones and the Permian
Collyhurst Sandstone. The Omskirk and St Bees provide the producing
reservoirs in the adjacent Morecambe complex. The more recent depth
migrated 3D seismic data indicates that the well was drilled
significantly down flank of the crest and through a major fault and
that a large gas accumulation may be proven up-dip.
The Castletown discovery is in Block 113/27d under Licence
P2076. An additional fault closed prospect (Prospect A) is present
in the Licence to the southwest of the Castletown structure. The
prospect has similarities to the producing Rhyl gas field.
Transaction Overview
Burgate holds a 100% participating interest in Peel-Doyle, in
the United Kingdom Seaward Production Licence (P2446, Blocks
113/22a and 113/27e).
Oilex has entered into a binding Term Sheet with Burgate to
acquire a 100% participating interest in the P2446 Licence for
consideration of:
a) payment of GBP60,000;
b) issue of 42,500,000 fully paid ordinary shares in Oilex Ltd
with a deemed value of GBP85,000; and
c) overriding royalty to be paid on the following basis:
i. 0.5% of actual gross revenue from commercial production up to
the point when gross capital expenditures related to the
development of the licence have been fully recovered from net cash
flows ("Payback"); and
ii. following Payback, the royalty to be paid shall be 2.25% of actual gross revenues.
The completion of the acquisition of the Licence is subject to
the following conditions precedent by 30 June 2020:
a) the UK Oil and Gas Authority ("OGA") approving the assignment
and transfer of the Licence from Burgate to Oilex;
b) the execution of applicable documents necessary to transfer the Licence to Oilex; and
c) execution of a royalty agreement in a form acceptable to the parties.
The shares to be issued as consideration for the acquisition of
Doyle-Peel are under Listing Rule 7.1.
Oilex has also entered into an Exclusivity Agreement with BCS to
secure an exclusive right to negotiate with BCS in respect of the
proposed acquisition of Castletown. In this regard, Oilex has paid
GBP68,000 to BCS in January 2020 regarding the applicable licence
fees payable to the OGA for the 2020 year.
BCS has granted Oilex exclusivity until 31 March 2020, during
which time it is intended that the terms of the definitive
documentation, relevant approvals and funding for the Proposed
Transaction will be finalised.
JPDA 06-103, TIMOR SEA
(Oilex: PSC Terminated 15 July 2015 - Operator and 10%
interest)
In October 2018, the Company announced the Autoridade Nacional
Do Petroleo E Minerais (ANPM) had commenced arbitration proceedings
against Oilex and its joint venture partners (Respondents), in
regard to the JPDA production sharing contract (PSC).
During the Quarter the Company announced it had submitted the
Respondents First Memorial to the International Chamber of Commerce
(ICC) in Singapore. In this regard, following a substantive legal
and independent expert review, the joint venture has lodged a
counterclaim against the ANPM for the amount US$23.3 million (plus
interest) as damages arising from the wrongful termination of the
PSC. Oilex holds a 10% participating interest in the JPDA joint
venture.
Subsequent to the end of the quarter, the arbitration panel
dismissed ANPM's application to increase their claim against the
joint venture from A$17.0 million to US$22.6 million (plus
interest). The arbitration hearing is scheduled to commence on 10
February 2020, unless suspended prior to commencement.
The obligations and liabilities of the Joint Venture
participants under the PSC are joint and several and all
participants have provided parent company guarantees. The equity
interest of the Joint Venture participants are:
Oilex (JPDA 06-103) Ltd (Operator) 10%
Pan Pacific Petroleum (JPDA 06-103) Pty Ltd 15%
Japan Energy E&P JPDA Pty Ltd 15%
GSPC (JPDA) Limited # 20%
Videocon JPDA 06-103 Limited *# 20%
Bharat PetroResources JPDA Ltd # 20%
Total 100%
* The Company understands that the parent company Videocon
Industries Ltd is subject to corporate insolvency proceedings and
continues to trade under the supervision of an insolvency
professional.
# A notice of default has been issued against both Videocon JPDA
06-103 Limited, GSPC (JPDA) Limited and Bharat PetroResources JPDA
Ltd for their failure to pay the joint venture cash calls.
WEST KAMPAR PSC, CENTRAL SUMATRA, INDONESIA
(Oilex: 45% interest and further 22.5% secured )
During the June 2019 quarter, the Company was advised by the
Indonesian Government regulator, SKK Migas, that the West Kampar
PSC had been terminated following SPE's failure to meet its
obligations under the PSC.
The Company continues to engage with the Indonesia regulators
with a view to returning its interest in West Kampar.
CORPORATE
Issue of Securities (October 2019 Equity Capital Raising)
On 30 September 2019 and 30 October 2019, the Company announced
a GBP750,000 equity capital raising at GBP0.0019. The proceeds for
the capital raising was for debt reduction, acquisitions and
working capital.
Issue of Securities (Cooper- Eromanga Basins Acquisitions)
On 14 October 2019, the Company announced that it had issued
29,457,413 fully paid ordinary shares as part consideration for the
acquisition of the PEL 112 and 444 in the Cooper- Eromanga
Basins.
Series A Loan (A$330,000)
During the quarter the Series A loan repayment date was extended
from 1 October to 15 October and subsequently fully repaid.
Series B Loan (A$250,000)
On 1 October 2019, the Company announced that it had entered
into an amendment agreement with Republic Investment Management Pte
Ltd to vary the terms of its Series B Loans (A$250,000). Pursuant
to the amendment agreement, the loan repayment date was extended
from 1 October 2019 to 1 April 2020. Furthermore, the Company
agreed to issue the 60,664,887 options exercisable at A$0.004121 on
or before 1 April 2020 Options. The issue of the Options was
approved by shareholders at the annual general meeting on 27
November 2019 with the options subsequently issued on 29 November
2019.
Proposed Series C Loan Facility
The Company is in advanced negotiations to secure a new
unsecured loan facility for GBP350,000 with sophisticated existing
shareholders in the Company. The proposed terms of the loan
facility, which are subject to formal documentation, are expected
to be finalised in early February 2020 as follows:
Term: 1 August 2020
Interest Rate: 5%
Repayments 100% payable at maturity
Options Issued: 166,666,667 options over ordinary shares
Option Exercise Price: GBP0.0021 per option
Option Expiry Date: On 1 August 2020
For the provision of the loan facility, the Company expects to
issue 166,666,667 options exercisable at GBP0.0021 on or before 1
August 2020. The issue of the new options will be under ASX Listing
Rule 7.1.
Results of Annual General Meeting
On 27 November 2019, the Company announced that all resolutions
put to Shareholders at the Annual General Meeting on 27 November
2019 were passed by a show of hands.
Issue of Securities (Option Conversion)
Subsequent to the quarter, the Company advised that it has
issued 124,060,150 shares at A$0.00266 (total A$330,000) pursuant
to the exercise and underwriting of 124,060,150 options that were
to expire on 31 December 2019.
The issue of the 31 December 2019 options was approved by
shareholders on 19 September 2019.
Cash Balance
At the end of the quarter Oilex retained cash resources of $0.4
million. Subsequent to the end of the quarter the Company announced
that:
-- advised that it had received proceeds of A$330,000 pursuant
to the exercise and underwriting of options as announced on 31
December 2019;
-- it had accepted a conditional offer of US$0.14 million for
the sale of its 40% participating interest in Bhandut; and
-- the Company is in advanced negotiations to secure a new
unsecured loan facility for GBP350,000 and which
is expected to be finalised in early February 2020.
Proposed Board Changes
Subject to completion of the Proposed Transaction with Doriemus,
Doriemus proposes to appoint Oilex's Chairman, Mr Brad Lingo, as
the new Managing Director of Doriemus. In this event, Mr Lingo
would also step down as the Chairman of Oilex following the
appointment of a new Oilex Chairman. It is also proposed that
Oilex's Managing Director, Joe Salomon, will be appointed as a
Director of Doriemus. The independent directors of Oilex are
currently conducting a formal process to appoint a new Oilex
Chairman.
Capital Structure
The shares and options on issue as at 31 December 2019 were as
follows:
Ordinary Shares 3,426,318,888
Unlisted Options (Exercise Price,
Expiry):
GBP0.0019, 1/04/2020) 60,664,887
GBP0.00225, 22/05/2020) 2,222,222
(GBP0.0036, 24/12/2020) 6,666,667
(GBP0.0019, 20/10/2021) 14,802,631
--------------
84,356,407
Qualified Petroleum Reserves and Resources Evaluator
Statement
Pursuant to the requirements of Chapter 5 of the ASX Listing
Rules, the information in this report relating to petroleum
reserves and resources is based on and fairly represents
information and supporting documentation prepared by or under the
supervision of Mr Joe Salomon, Managing Director employed by Oilex
Ltd. Mr Salomon has over 32 years' experience in petroleum geology
and is a member of the Society of Petroleum Engineers and AAPG. Mr
Salomon meets the requirements of a qualified petroleum reserve and
resource evaluator under Chapter 5 of the ASX Listing Rules and
consents to the inclusion of this information in this report in the
form and context in which it appears. Mr Salomon also meets the
requirements of a qualified person under the AIM Note for Mining,
Oil and Gas Companies and consents to the inclusion of this
information in this report in the form and context in which it
appears.
Board of Directors
Brad Lingo Non-Executive Chairman
Paul Haywood Non-Executive Director
Joe Salomon Managing Director
Peter Schwarz Non-Executive Director
Company Secretary
Mark Bolton CFO & Company Secretary
Stock Exchange Listing
Australian Securities Code: OEX
Exchange
AIM London Stock Exchange Code: OEX
AIM Nominated Adviser AIM Broker
Strand Hanson Limited Novum Securities Limited
Share Registry
Australia
Link Market Services Limited
Level 12
250 St. Georges Terrace
Perth WA 6000 Australia
Telephone: 1300 554 474
Website:
http://investorcentre.linkmarketservices.com.au
United Kingdom
Computershare Investor Services
PLC
The Pavilions
Bridgwater Road
Bristol BS13 8AE United Kingdom
Telephone: +44 (0) 870 703 6149
Website:
www.computershare.com
PERMIT SCHEDULE - 31 DECEMBER 2019
ASSET LOCATION ENTITY EQUITY OPERATOR
%
------------------- --------------------- --------- --------------------
Cambay Field Gujarat, India Oilex Ltd 30.0 Oilex Ltd
PSC (1)
------------------- --------------------
Oilex N.L.
Holdings (India)
Limited 15.0
---------------------------------------------------------- --------- --------------------
Bhandut Field Gujarat, India Oilex N.L. 40.0 Oilex N.L.
PSC Holdings (India) Holdings (India)
Limited Limited
------------------- --------------------- --------- --------------------
JPDA 06-103 Joint Petroleum Oilex (JPDA 10.0 Oilex (JPDA
PSC (2) Development 06-103) Ltd 06-103) Ltd
Area
Timor Leste
and Australia
------------------- --------------------- --------- --------------------
PEL 112 South Australia, Holloman Petroleum 79.6667 Holloman Petroleum
Australia Pty Ltd Pty Ltd
------------------- --------------------- --------- --------------------
PEL 444 South Australia, Holloman Petroleum 79.6667 Holloman Petroleum
Australia Pty Ltd Pty Ltd
------------------- --------------------- --------- --------------------
(1) During the September 2019 quarter, the Company reached a
settlement with GSPC which, upon completion, will resolve the
ongoing Cambay Production Sharing Contract (PSC) dispute. Pursuant
to the settlement, GSPC has commenced a sale process of its
interest in Cambay. The Company has a right of first refusal in
regard to sale of GSPC's participating interest. Submission of bids
for GSPC's PI closed on 23 November 2019.
(2) PSC terminated 15 July 2015.
Barrel/bbl Standard unit of measurement for all oil and condensate
production. One barrel is equal to 159 litres or 35
imperial gallons.
------------- ---------------------------------------------------------------
BOEPD Barrels of oil equivalent per day
------------- ---------------------------------------------------------------
BOPD Barrels of oil per day
------------- ---------------------------------------------------------------
MMBO Million standard barrels of oil or condensate
------------- ---------------------------------------------------------------
SCFD Standard cubic feet (of gas) per day
------------- ---------------------------------------------------------------
MSCFD Thousand standard cubic feet (of gas) per day
------------- ---------------------------------------------------------------
MMSCFD Million standard cubic feet (of gas) per day
------------- ---------------------------------------------------------------
BBO Billion standard barrels of oil or condensate
------------- ---------------------------------------------------------------
BCF Billion Cubic Feet of gas at standard temperature and
pressure conditions
------------- ---------------------------------------------------------------
TCF Trillion Cubic Feet of gas at standard temperature
and pressure conditions
------------- ---------------------------------------------------------------
Discovered Is that quantity of petroleum that is estimated, as
in place of a given date, to be contained in known accumulations
volume prior to production
------------- ---------------------------------------------------------------
Undiscovered Is that quantity of petroleum estimated, as of a given
in place date, to be contained within accumulations yet to be
volume discovered
------------- ---------------------------------------------------------------
PSC Production Sharing Contract
------------- ---------------------------------------------------------------
Prospective Those quantities of petroleum which are estimated,
Resources as of a given date, to be potentially recoverable from
undiscovered accumulations.
------------- ---------------------------------------------------------------
Contingent Those quantities of petroleum estimated, as of a given
Resources date, to be potentially recoverable from known accumulations
by application of development projects, but which are
not currently considered to be commercially recoverable
due to one or more contingencies.
Contingent Resources may include, for example, projects
for which there are currently no viable markets, or
where commercial recovery is dependent on technology
under development, or where evaluation of the accumulation
is insufficient to clearly assess commerciality. Contingent
Resources are further categorized in accordance with
the level of certainty associated with the estimates
and may be sub-classified based on project maturity
and/or characterised by their economic status.
------------- ---------------------------------------------------------------
Reserves Reserves are those quantities of petroleum anticipated
to be commercially recoverable by application of development
projects to known accumulations from a given date forward
under defined conditions.
Proved Reserves are those quantities of petroleum,
which by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be commercially
recoverable, from a given date forward, from known
reservoirs and under defined economic conditions, operating
methods and government regulations.
Probable Reserves are those additional Reserves which
analysis of geoscience and engineering data indicate
are less likely to be recovered than Proved Reserves
but more certain to be recovered than Possible Reserves.
Possible Reserves are those additional reserves which
analysis of geoscience and engineering data indicate
are less likely to be recoverable than Probable Reserves.
Reserves are designated as 1P (Proved), 2P (Proved
plus Probable) and 3P (Proved plus Probable plus Possible).
Probabilistic methods
P90 refers to the quantity for which it is estimated
there is at least a 90% probability the actual quantity
recovered will equal or exceed. P50 refers to the quantity
for which it is estimated there is at least a 50% probability
the actual quantity recovered will equal or exceed.
P10 refers to the quantity for which it is estimated
there is at least a 10% probability the actual quantity
recovered will equal or exceed.
------------- ---------------------------------------------------------------
Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
---------------------------------------------------
OILEX LTD
ABN Quarter ended (current quarter)
--------------- --------------------------------
50 078 652 632 31 DECEMBER 2019
--------------------------------
Consolidated statement of cash Current quarter Year to date
flows $A'000 (3months) $A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (325) (434)
(b) development - -
(c) production (42) (107)
(d) staff costs (227) (415)
(e) administration and corporate
costs (163) (378)
Dividends received (see note
1.3 3) 1 1
1.4 Interest received (21) (21)
1.5 Interest and other costs of
finance paid - -
1.6 Income taxes paid - -
1.7 Research and development refunds - -
1.8 Other (provide details if
material)
Net cash from / (used in)
1.9 operating activities (777) (1,354)
Consolidated statement of cash Current quarter Year to date
flows $A'000 (12 months)
$A'000
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant and equipment (2) (2)
(b) tenements (see item 10) (13) (122)
(c) investments - -
(d) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) property, plant and equipment - -
(b) tenements (see item 10) - -
(c) investments - -
(d) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other (provide details if - -
material)
----- ----------------------------------- ---------------- -------------
Net cash from / (used in)
2.6 investing activities (15) (124)
----- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
3.1 Proceeds from issues of shares 1,387 1,985
3.2 Proceeds from issue of convertible - -
notes
3.3 Proceeds from exercise of - -
share options
Transaction costs related
to issues of shares, convertible
3.4 notes or options (122) (141)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings (330) (330)
3.7 Transaction costs related - -
to loans and borrowings
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
----- ----------------------------------- ---------------- -------------
Net cash from / (used in)
3.10 financing activities 935 1,514
----- ----------------------------------- ---------------- -------------
Consolidated statement of cash Current quarter Year to date
flows $A'000 (12 months)
$A'000
4. Net increase / (decrease)
in cash and cash equivalents
for the period
---- ------------------------------- ---------------- -------------
Cash and cash equivalents
4.1 at beginning of period 254 358
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (777) (1,354)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (15) (124)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 935 1,514
Effect of movement in exchange
4.5 rates on cash held 5 8
---- ------------------------------- ---------------- -------------
Cash and cash equivalents
4.6 at end of period 402 402
---- ------------------------------- ---------------- -------------
5. Reconciliation of cash and
cash equivalents
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to Current quarter Previous quarter
the related items in the accounts $A'000 $A'000
5.1 Bank balances 402 254
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---- ----------------------------------- ---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 402 254
---- ----------------------------------- ---------------- -----------------
Payments to directors of the entity and Current quarter
6. their associates $A'000
Aggregate amount of payments to these parties
6.1 included in item 1.2 189
----------------
6.2 Aggregate amount of cash flow from loans
to these parties included in item 2.3 -
----------------
6.3 Include below any explanation necessary to understand
the transactions included in items 6.1 and 6.2
----- -----------------------------------------------------------------
Director's fees, consulting fees and superannuation.
Payments to related entities of the entity Current quarter
7. and their associates $A'000
7.1 Aggregate amount of payments to these parties
included in item 1.2 -
----------------
7.2 Aggregate amount of cash flow from loans
to these parties included in item 2.3 -
----------------
7.3 Include below any explanation necessary to understand
the transactions included in items 7.1 and 7.2
---- ----------------------------------------------------------------
8. Financing facilities available Total facility Amount drawn
Add notes as necessary for amount at quarter at quarter end
an understanding of the position end $A'000
$A'000
8.1 Loan facilities 250 250
------------------- ----------------
8.2 Credit standby arrangements - -
------------------- ----------------
8.3 Other (please specify) - -
------------------- ----------------
8.4 Include below a description of each facility above, including
the lender, interest rate and whether it is secured or
unsecured. If any additional facilities have been entered
into or are proposed to be entered into after quarter
end, include details of those facilities as well.
---- -------------------------------------------------------------------------
Loan facility details:
$250,000: Lender- Republic Investment Management Pte Ltd, drawn
26 September 2018, interest rate 5%, unsecured, repayment date
extended to 1 April 2020.
The Company is in advanced negotiations to secure a new unsecured
loan facility for GBP350,000 and which is expected to be finalised
in early February 2020.
9. Estimated cash outflows for next $A'000
quarter
9.1 Exploration and evaluation 95
9.2 Development -
9.3 Production (C&M) 142
9.4 Staff costs 243
9.5 Administration and corporate costs 168
Other (provide details if material):
9.6 - Acquisition Costs 131
---- ------------------------------------- ----------------------------------------------------
9.7 Total estimated cash outflows 778
---- ------------------------------------- ----------------------------------------------------
10. Changes in tenements Tenement Interest Interest
(items 2.1(b) reference at beginning at end
and 2.2(b) above) and location Nature of interest of quarter of quarter
10.1 Interests in Refer to Permit
mining tenements Schedule in Quarterly
and petroleum Report
tenements lapsed,
relinquished
or reduced
----- --------------------- -------------- ------------------------ -------------- ------------
10.2 Interests in Refer to Permit
mining tenements Schedule in Quarterly
and petroleum Report
tenements acquired
or increased
----- --------------------- -------------- ------------------------ -------------- ------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here:
Print name: Mark Bolton - CFO & Company Secretary
Date: 31 January 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLBBMPTMTBJMMM
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January 31, 2020 03:17 ET (08:17 GMT)
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