31 Jul 2020 11:07
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CAMBAY FIELD, ONSHORE GUJARAT, INDIA
» The Company's plans 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.
» The Company advises that the sale process being conducted by GSPC for its 55% interest in the Cambay PSC remains ongoing, however, is subject to delay due to Covid-19 impact in India.
» During the quarter, GSPC made no payments towards outstanding cash calls. GSPC subsequently paid US$0.08 million in outstanding cash calls with a further estimate of US$0.10 million anticipated in August 2020.
» Gas production from the Cambay Field is currently shut-in. The Company hopes to reinstate production shortly.
West kampar, indonesia
» Post quarter end, the Company announced substantial progress has been made towards the Company's strategic objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to financing, to recommencing production from the Pendalian Oilfield.
Cooper-Eromanga Basins, Australia
» During the quarter, the Company announced it had entered into a conditional sale & purchase agreement (SPA) with Armour Energy limited (Armour)(ASX:AJQ) for the proposed sale of its interests in the Cooper-Eromanga Basin to Armour. The sale is anticipated to complete on or before 15 September 2020.
» On 30 June 2020, the Company advised that the South Australian State Government had announced the successful bid for Block CO2019-C (PELA677) (Permit) in the Cooper Eromanga Basin by Cordillo Energy Pty Ltd (Cordillo), a wholly owned subsidiary of Oilex, that is subject to the SPA with Armour.
BHANDUT FIELD, ONSHORE GUJARAT, INDIA
» During the quarter, the sale of the Company's 40% participating interest (PI) in Bhandut PSC (Bhandut) had substantially progressed. All necessary documentation has been submitted to the GoI with completion of the transfer and settlement of the consideration by Kiri is anticipated shortly.
» During the quarter, GSPC made no payments towards outstanding cash calls. Subsequent to the end of the quarter, GSPC paid US$0.05 million in outstanding cash calls with a further estimate of US$13,000 anticipated in August 2020.
CORPORATE
» During the quarter Mr Bradley Lingo resigned as a director and Mr Mark Bolton was appointed a director of Oilex.
» Cash resources as at 30 June 2020 were A$0.16 million.
» On 15 March 2020 and 23 April 2020, Oilex Ltd (Oilex or the Company) announced that it had arranged an equity capital raising to secure further funding of £0.25 million.
» A General Meeting of Shareholders was held on 30 June 2020, in relation to the above, with all resolutions passed on a show of hands.
» Subsequent to the end of the quarter, the Company announced that it had arranged a further equity capital raising of £250,000.
» During the quarter, the repayment of the Series B Loan (A$250,000) was restructured and extended to 31 July 2020. By agreement with the lender post quarter end, the loan is be repaid in August 2020, following completion of the equity capital raising referred to above.
» Subsequent to the end of the quarter, the Company announced it had restructured the Series C loan of £0.125 million extending the repayment date from 1 August 2020 to 31 October 2020, and issued new oprions.
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 which to date focussed on the Cooper-Eromanga Basins in Australia (which is now subject to a conditional disposal) 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 Gujarat State Petroleum Corporation (GSPC) to resolve the dispute over the Cambay PSC, and further develop the asset with a new partner;
· 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 at Cambay are well advanced and include the drilling of up to two vertical wells, subject to, inter alia, securing the necessary funding.
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. Furthermore, upon the removal of the applicable Covid-19 restrictions in India, the Company will review the planned work programme and update the market at that time.
Sale Process for Cambay PSC
On 9 September 2019, the Company announced that it had reached a settlement with GSPC which, upon completion, will resolve the ongoing Cambay PSC dispute. Pursuant to the settlement, Oilex and GSPC have agreed that GSPC's 55% PI in Cambay PSC would be subject to a sale process.
During the quarter, the Company advised that the sale process being conducted by GSPC for its 55% interest in the Cambay PSC continues. The Company highlights that the sale process of GSPC's PI is internal and confidential to GSPC. The sale has been, and continues to be, subject to significant delays reflecting the impact of Covid-19 on all parties, and India generally. Notwithstanding this, efforts by all parties do continue as evidenced by the abovementioned sale progress for the Bhandut PSC.
The Company also notes that the settlement agreement with GSPC has not waived 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.
Environmental Clearance
The Company is presently in the final stages in obtaining a new environmental clearance from Ministry of Environment and Forest and Cabinet Committee to supercede the previous clearances already obtained under the previous regulatory requirements. The clearances are necessary to recommence production at Cambay and in support of the planned drilling programme at Cambay. Presently, Enviromental Impact Assessment has been prepared by the Company's independent consultants and is pending submission to the applicable authorities and following public hearings. The public hearings are delayed due to the continued 'lockdown' on account of Covid-19.
Following the necessary environmental clearances, production from well C-73 and C-77H are on standby for production commencement.
Joint Venture Management
During the quarter, Oilex received no payments towards outstanding cash calls from its Joint Venture partner. Total outstanding cash calls from GSPC - Est. USD$5.67 million (inclusive of the Est. USD$3.05 million pursuant to the Event of Default (EoD)).
Subsequent to the end of the quarter, Oilex received US$0.08 million from GSPC towards outstanding cash calls with a further estimated US$0.10 million anticipated to be received in August.
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 been submitted to the Director General of Hydrocarbons for approval.
During the quarter, the Company announced that the sale of the Company's 40% PI in Bhandut has been substantially progressed. The Company confirms that all necessary documentation has been submitted to the Government of India to affect the transfer of the PI to Kiri and Company Logistics Private Limited (Kiri). Completion of the transfer and settlement of the consideration by Kiri is anticipated in early July 2020.
On 28 January 2020, Oilex announced that it had accepted an offer from Kiri to acquire the Company's PI in Bhandut. Pursuant to the Agreement entered with Kiri, the Company advised it will receive US$0.14 million in cash proceeds for the sale of its PI to Kiri. Furthermore, Kiri has expressed an interest in engaging the services of Oilex's office to review field production, stabilize 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 as at 30 June 2019.
During the quarter, GSPC paid made no cash call payments for Bhandut. At the end of the quarter, unpaid cash calls by GSPC are E USD$0.09 million gross. Subsequent to the end of the quarter, Oilex received US$0.05 million from GSPC towards outstanding cash calls with a further estimated US$13,000 anticipated to be received in August.
Cooper-Eromanga Basins
Sale of Cooper Eromanga Basin Assets
On 27 May 2020 the Company announced that it has signed a conditional binding Heads of Agreement (HOA) with Armour Energy Limited (Armour), an ASX-listed company (ASX:AJQ), for the proposed sale of all of its interests in the Cooper-Eromanga Basin to Armour (Proposed Transaction). On the 15 June 2020 the Company further announced it has entered into a conditional binding Share Purchase Agreement (SPA) with Armour.
Subject to the terms of the SPA, it is intended that Armour will acquire 100% of the issued capital of CoEra Limited (CoEra), a wholly owned subsidiary of Oilex. Assuming completion, CoEra will own all of Oilex's direct and indirect interests in the Cooper-Eromanga Basin including a:
• 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
• right to acquire 27 Petroleum Retention Licences from Senex Limited (Northern Fairway PRLs).
As consideration for the Proposed Transaction, Armour will issue up to 34.5 million Armour shares to Oilex (or its nominees) upon completion of the Proposed Transaction as follows (Consideration Shares):
Tranche 1 24,500,000 fully paid ordinary shares in Armour upon completion; and
Tranche 2 Where the value of the Tranche 1 consideration is below A$906,500 based upon the volume weighted average share price of Armour on the ASX for a period of 90 days following the date of this announcement to the ASX (VWAP), a further tranche of Armour shares. The maximum number of the Tranche 2 shares shall be the lower of:
• 10 million Armour shares; and
• Using the VWAP, the share equivalent value of A$906,500 comprising the aggregate of Tranche 1 and Tranche 2.
The issue of the Consideration Shares will be subject to any necessary Armour shareholder and/or regulatory approvals and a 12 month voluntary escrow from completion. Based on the closing price of an Armour ordinary share on 26 May 2020, Tranche 1 is worth A$710,000 and Tranche 2 is worth up to A$290,000.
In addition, Armour will reimburse Oilex, in cash, for past costs of A$125,000.
The Company will nominate up to 3.45 million shares (10%) of the abovementioned Share Consideration to Orthogonal Enterprises Pty Ltd (Orthogonal) for past and future services rendered in building the Cooper-Eromanga portfolio.
The Proposed Transaction is subject to the satisfaction of various conditions precedent, including Armour shareholder approval to be on or before 15 September 2020.
Successful Bid for Cooper Basin Permit
On 30 June 2020, the Company advised that the South Australian State Government had announced the successful bid for Block CO2019-C (PELA677) (Permit) in the Cooper Eromanga Basin by Cordillo Energy Pty Ltd (Cordillo), a wholly owned subsidiary of Oilex. Completion of the award will follow the formal licence offer by the South Australian Department for Energy and Mining and acceptance by Cordillo together with the engagement with applicable native title parties and the South Australian government to develop the necessary access agreements.
The Permit is within and adjacent to the 27 Petroleum Retention Licenses in the Northern Oil and Gas Fairway, currently subject to the right to acquire from Senex Energy Ltd (refer the Company's announcement on 27 September 2019) (Northern Fairway PRLs). The award extends coverage of the area that Oilex had identified as having high prospectivity, being nearby to a number of discovered oil and gas fields. The guaranteed work programme over the first five years includes the acquisition of 250 square kilometers of 3D seismic and the drilling of 2 wells.
The Permit is part of the Company's Cooper Eromanga Basin interests that is subject to the proposed sale to Armour, as announced on 15 June 2020. As such, any expenditure associated with the Permit would be borne by Armour.
United Kingdom Continental Shelf
East Irish Sea
On 23 December 2019, the Company announced that it had entered into a binding term sheet to acquire a 100% participating interest in the Doyle-Peel licence (P2446) in the East Irish Sea (EIS), offshore the United Kingdom.
The Company advised on 15 March 2020 that it agreed to the following amendments to the agreement with Burgate Exploration and Production Ltd ("Burgate") regarding the acquisition of the Doyle-Peel licence (P2446):
• the completion of the acquisition of the P2446 licence, subject to the applicable conditions precedent, extended from 30 June 2020 to 31 December 2020; and
• the issue of the share consideration for the acquisition of Doyle-Peel is subject to shareholder approval under Listing Rule 7.1.
Doyle-Peel 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.
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. 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.
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 the Term Sheet to acquire a 100% participating interest in the P2446 licence for consideration of:
a) payment of £60,000;
b) issue of 42,500,000 fully paid ordinary shares in Oilex Ltd with a deemed value of £85,000; 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 P2446 licence is subject to the following conditions precedent by 31 December 2020:
a) the UK Oil and Gas Authority ("OGA") approving the assignment and transfer of the P2446 licence from Burgate to Oilex;
b) the execution of applicable documents necessary to transfer the P2446 licence to Oilex;
c) execution of a royalty agreement in a form acceptable to the parties; and
d) the issue of the share consideration for the acquisition of Doyle-Peel receiving shareholder approval under Listing Rule 7.1 (received on 30 June 2020).
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, in regard to the JPDA PSC.
On 16 August 2019, the Company announced that the JPDA joint venture had 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.
During the previous 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, which was scheduled to commence on 10 February 2020, was subsequently suspended while the parties continue their commercial settlement negotiations.
The settlement negotiations are now well advanced and the Company anticipates achieving a commercial resolution in the September 2020 quarter.
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 each 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 )
Subsequent to the end of the quarter the Company announced substantial progress has been made towards the Company's strategic objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to financing, to recommencing production from the Pendalian Oilfield.
Following various meetings and correspondence with the Government of Indonesia (GoI) and with the support of our local Indonesian partner, the GoI has advised that our Proposed Direct Bid, through the Joint Study of the West Kampar Region, is declared administratively complete and have recorded it as a proposal for a Direct Offer through a Joint Study as stipulated in ESDM Regulation No. 35 of 2008.
This confirmation from the GoI, which is exclusive to Oilex, provides a pathway to progress the proposed development of West Kampar and provides certain preferential rights in the award of the West Kampar PSC by the GoI. Oilex's interest in the study and ultimate potential award of the PSC will be on a 50-50 joint basis with its local Indonesian partner, PT Ephindo.
Technical work carried out by Oilex and its advisors estimate that the field can be quickly brought back online at 350 to 400 bopd and that significant additional production potential may be possible from infill drilling and also water injection support. The return to production will require careful execution in the field given that it has been shut in since 2016. The oil occurs in five good quality, stacked reservoirs with some stratigraphic complexity, and the application of 3D seismic data which has been acquired but not interpreted, should provide a significant improvement in the understanding of the reservoir distribution and future development planning. Access to the data is to be negotiated with the seismic company that acquired it. The oil is good quality with no or little gas. It is believed that the previous production costs can be reduced. A number of exploration opportunities are present both close to the Pendalian field and in the more distant parts of the block, these require further review evaluation.
CORPORATE
March-April 2020 Equity Capital Raising
On 15 March 2020, and as amended on 23 April 2020, the Company announced that it had arranged an equity capital raising to secure further funding of £0.25 million (A$0.5 million) through the proposed subscription of 277,777,778 new shares (Subscription Shares) at GBP 0.09 pence (0.1792 AUD cents) per share (Subscription).
On 15 May 2020 the Company then announced that it had issued 222,222,222 of the Subscription Shares for £0.2m cash proceeds. Following shareholder approval on 30 June 2020, the balance of 55,555,556 shares for £0.05m cash proceeds were issued on 17 July 2020.
Proposed Issue of Advisor and Consultant Shares
On 19 May 2020, the Company announced that, as part of its ongoing cash cost reduction programme, it has agreed to issue 84,810,000 new shares at GBP 0.09 pence per share to advisers in lieu of £75,579 in cash fees. On 17 July 2020, this was further expanded by 18,223,333 new shares at GBP 0.09 pence per share to advisers in lieu of £16,401 in cash fees.
On 17 July 2020, the Company announced that the shares were issued to advisors and consultants.
July Equity Capital Raising
On 31 July 2020, the Company announced that it had arranged an equity capital raising to secure further funding of £0.25 million (est. A$0.5 million) through the proposed subscription of 312,500,000 new shares at GBP 0.08 pence per share. Funds raised are intended to be applied towards increasing the Company's working capital base and debt reduction The additional funding will support the Company's initiative to implement the settlement with GSPC, which has been delayed by the impact from Covid-19. Completion of the capital raising is anticipated on or about 14 August 2020 and is conditional, inter alia, upon admission of the shares the subject of the Subscription to trading on AIM.
Pursuant to advisory agreements with Novum, the Company will issue 15,000,000 unlisted options exercisable at 0.08 pence on or before two years following the completion with the capital raising.
Series C Loan Restructure (£125,000)
Subsequent to the end of the quarter, the Company also announced that it has entered into an amendment agreement to vary the repayment obligations for its Series C £125,000 loan with the loan repayment date extended from 1 August 2020 to 31 October 2020. All other terms remain the same and are extended to 31 October 2020, except for the issue of new options on different terms. Pursuant to the amendment, the Company has agreed to issue 113,636,364 options over ordinary shares exercisable at GBP£0.0011 per option on or before on 29 January 2021. The issue of the options is subject to shareholder approval on or before 30 November 2020, and replace those expiring on 1 August 2020 .
Cash Balance
At the end of the quarter, Oilex retained cash resources of $0.16 million. As at 30 June, the undrawn loan facilities were £40,000. Furthermore the Company notes the following additional information subsequent to the end of the quarter, the Company:
· received US$80,000 in outstanding cash calls from GSPC in regard to Cambay and Bhandut. The Company also anticipates receiving a further US$0.13 million in outstanding cash calls from GSPC during the September 2020 quarter;
· anticipates receiving cash proceeds of US$0.29 million in regard to the sale of Bhandut during the September 2020 quarter;
· received £50,000 (est. A$91,000) in share subscription proceeds pursuant to the second tranche of the equity capital raising as announced on 17 July 2020;
· arranged an equity capital raising of £0.25 million with settlement anticipated in August 2020;
· anticipates receiving cash proceeds of A$125,000 on or before 15 September 2020 in regard to the sale of the Cooper Basin assets to Armour; and
· restructured its Series C loan, deferring the repayment date from 1 August 2020, to 31 October 2020.
Board of Director Changes
During the quarter, the Board approved the extension of Mark Bolton's term as Executive Director and Company Secretary of the Company to 31 December 2020.
During the quarter Mr Brad Lingo stepped down as a Director of the Company with Mr Salomon appointed as interim Executive Chairman.
Subsequent to the end of the quarter, the Board approved the extension of Joe Salomon's executive contract with the Company to 31 December 2020.
Payments to related parties of the entity and their associates
During the quarter, $0.10 million was paid to the Directors for director services provided to the Company.
Change of Registered Office
During the quarter the Company advised that it's registered and principal office address has changed to: Level 1, 11 Lucknow Place, West Perth 6005, Western Australia
General Meeting of Shareholders
A General Meeting of Shareholders was held on 30 June 2020, with all resolutions passed on a show of hands.
Capital Structure
The shares and options on issue as at 30 June 2020 were as follows:
Ordinary Shares | 3,648,541,110 |
|
|
Unlisted Options (Exercise Price, Expiry): |
|
£0.0036, 24/12/2020 | 6,666,667 |
£0.0019, 20/10/2021 | 14,802,631 |
£0.0021, 1/08/2020 | 166,666,667 |
| 188,135,965 |
The above table does not include the following share and option issues subsequent to the end of the quarter:
· 55,555,556 shares issued pursuant the second tranche of the March/April 2020 equity capital raising;
· 103,033,333 shares issued to advisors and consultants in lieu of cash fees paid;
· 113,636,364 options to be issued, subject to shareholder approval, pursuant to the extension of the Series C loan; and
· 312,500,000 shares to be issued pursuant to the July equity capital raising.
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 |
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Paul Haywood | Non-Executive Director |
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Joe Salomon | Interim Executive Chairman & Managing Director |
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Peter Schwarz | Non-Executive Director |
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Mark Bolton | Executive Director |
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Company Secretary |
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Mark Bolton | CFO & Company Secretary |
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Stock Exchange Listing |
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Australian Securities Exchange | Code: OEX |
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AIM London Stock Exchange | Code: OEX |
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AIM Nominated Adviser | AIM Broker |
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Strand Hanson Limited | Novum Securities Limited |
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Share Registry - Australia |
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Link Market Services Limited Level 12 250 St. Georges Terrace Perth WA 6000 Australia Telephone: 1300 554 474 Website: http://investorcentre.linkmarketservices.com.au |
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Share Registry - United Kingdom |
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Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom Telephone: +44 (0) 870 703 6149 Website: www.computershare.com |
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PERMIT SCHEDULE - 30 JUNE 2020 | ||||
ASSET | LOCATION | ENTITY | EQUITY % | OPERATOR |
Cambay Field PSC (1) | Gujarat, India | Oilex Ltd | 30.0 | Oilex Ltd |
Oilex N.L. Holdings (India) Limited | 15.0 | |||
Bhandut Field PSC | Gujarat, India | Oilex N.L. Holdings (India) Limited | 40.0 | Oilex N.L. Holdings (India) Limited |
JPDA 06-103 PSC (2) | Joint Petroleum Development Area Timor Leste and Australia | Oilex (JPDA 06-103) Ltd | 10.0 | Oilex (JPDA 06-103) Ltd |
PEL 112 | South Australia, Australia | Holloman Petroleum Pty Ltd | 79.6667 | Holloman Petroleum Pty Ltd |
PEL 444 | South Australia, Australia | Holloman Petroleum Pty Ltd | 79.6667 | Holloman Petroleum 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 declined its right of first refusal in regard to sale of GSPC's participating interest. Submission of bids for GSPC's PI closed on 23 December 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 in place volume | Is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production |
Undiscovered in place volume | Is that quantity of petroleum estimated, as of a given date, to be contained within accumulations yet to be discovered |
PSC | Production Sharing Contract |
Prospective Resources | Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. |
Contingent Resources | Those quantities of petroleum estimated, as of a given 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. |
Appendix 5B
Mining exploration entity or oil and gas exploration entityquarterly cash flow report
Name of entity | ||
OILEX LTD | ||
ABN |
| Quarter ended ("current quarter") |
50 078 652 632 |
| 30 JUNE 2020 |
Consolidated statement of cash flows | Current quarter$A'000 | Year to date (12 months)$A'000 | |
1. | (a) Cash flows from operating activities | - | - |
1.1 | Receipts from customers | ||
1.2 | Payments for | (128) | (915) |
| (a) exploration & evaluation (if expensed) | ||
| (b) development | - | - |
| (c) production | (9) | (164) |
| (d) staff costs | (194) | (811) |
| (e) administration and corporate costs | (209) | (921) |
1.3 | Dividends received (see note 3) | - | - |
1.4 | Interest received | - | 2 |
1.5 | Interest and other costs of finance paid | - | (23) |
1.6 | Income taxes paid | - | - |
1.7 | Government grants and tax incentives | - | - |
1.8 | Other (provide details if material) | - | - |
1.9 | Net cash from / (used in) operating activities | (540) | (2,832) |
| |||
2. | Cash flows from investing activities | - | - |
2.1 | Payments to acquire: | ||
| (a) entities | ||
| (b) tenements | (25) | (147) |
| (c) property, plant and equipment | - | (4) |
| (d) exploration & evaluation (if capitalised) | - | - |
| (e) investments | - | - |
| (f) other non-current assets | - | - |
2.2 | Proceeds from the disposal of: | - | - |
| (a) entities | ||
| (b) tenements | - | - |
| (c) property, plant and equipment | - | - |
| (d) investments | - | - |
| (e) 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) | - | - |
2.6 | Net cash from / (used in) investing activities | (25) | (151) |
| |||
3. | Cash flows from financing activities | 381 | 2,695 |
3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
3.2 | Proceeds from issue of convertible debt securities | - | - |
3.3 | Proceeds from exercise of options | - | - |
3.4 | Transaction costs related to issues of equity securities or convertible debt securities | (2) | (183) |
3.5 | Proceeds from borrowings | 217 | 598 |
3.6 | Repayment of borrowings | - | (330) |
3.7 | Transaction costs related to loans and borrowings | - | - |
3.8 | Dividends paid | - | - |
3.9 | Other (provide details if material) | - | - |
3.10 | Net cash from / (used in) financing activities | 596 | 2,780 |
| |||
4. | Net increase / (decrease) in cash and cash equivalents for the period |
|
|
4.1 | Cash and cash equivalents at beginning of period | 133 | 358 |
4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (540) | (2,832) |
4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (25) | (151) |
4.4 | Net cash from / (used in) financing activities (item 3.10 above) | 596 | 2,780 |
4.5 | Effect of movement in exchange rates on cash held | (4) | 5 |
4.6 | Cash and cash equivalents at end of period | 160 | 160 |
5. | Reconciliation of cash and cash equivalentsat the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter$A'000 | Previous quarter$A'000 |
5.1 | Bank balances | 160 | 133 |
5.2 | Call deposits | - | - |
5.3 | Bank overdrafts | - | - |
5.4 | Other (provide details) | - | - |
5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 160 | 133 |
6. | Payments to related parties of the entity and their associates | Current quarter$A'000 |
6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 103 |
6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | - |
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments | ||
Director's fees, consulting fees and superannuation.
7. | Financing facilitiesNote: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end$A'000 | Amount drawn at quarter end$A'000 |
7.1 | Loan facilities | 877 | 805 |
7.2 | Credit standby arrangements | - | - |
7.3 | Other (please specify) | - | - |
7.4 | Total financing facilities | 877 |
|
|
|
| |
7.5 | Unused financing facilities available at quarter end | 72 | |
7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. | ||
Loan facility details: · Series B facility $A250,000: Lender- Republic Investment Management Pte Ltd, fully drawn 26 September 2018, interest rate 5%, unsecured, repayment date 31 July 2020. · Series C facility GBP£125,000: Lender- Republic Investment Management Pte Ltd, fully drawn 15 April, interest rate 5%, unsecured, repayment date extended to 31 October 2020. · Series D facility GBP£225,000: Lender- Lombard Bank Malta plc, amount drawn at quarter end GBP£185,000, interest rate 5%, unsecured, repayment date 31 March 2021. | |||
8. | Estimated cash available for future operating activities | $A'000 |
8.1 | Net cash from / (used in) operating activities (Item 1.9) | (540) |
8.2 | Capitalised exploration & evaluation (Item 2.1(d)) | - |
8.3 | Total relevant outgoings (Item 8.1 + Item 8.2) | (540) |
8.4 | Cash and cash equivalents at quarter end (Item 4.6) | 160 |
8.5 | Unused finance facilities available at quarter end (Item 7.5) | 72 |
8.6 | Total available funding (Item 8.4 + Item 8.5) | 232 |
8.7 | Estimated quarters of funding available (Item 8.6 divided by Item 8.3) | 0.43 |
8.8 | If Item 8.7 is less than 2 quarters, please provide answers to the following questions: | |
| 1. Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | |
| Answer: Following the onset of Covid-19, the Company has substantially restructured its operating overheads whereby forecast cash outflows for the September quarter have been substantially reduced to approximately AUD361,000.
| |
| 2. Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | |
| Answer: Subsequent to the end of the quarter, the Company has arranged an equity capital raising of £250,000. In addition, the company anticipates receiving cash proceeds of US$0.29 million in regard to the sale of Bhandut during the September quarter. Further equity capital raisings will be considered in the December quarter, if required.
| |
| 3. Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | |
| Answer: Yes. The Company has limited operating expenditure planned for the next two quarters as summarised below:
India - The Company is in the final stages of implementing its Cambay settlement agreement with GSPC with field activities suspended pending completion of this settlement. UKCS - The Company is awaiting government approval for the transfer of the Doyle-Peel licences by the OGA with no activities planned pending the transfer. Cooper - The Company has entered into a agreement to dispose of its interests in the Cooper Basin assets with no material expenditure projected prior to completion.
| |
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.
Date: 31 July 2020
Authorised by: Mark Bolton - Executive Director
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
Rule 5.5