Oilex Ltd (ASX:LON:OEX) Acquisition in Cooper-Eromanga Basins

Oilex Ltd (“Oilex” or “the Company”) is pleased to announce that it has entered into an agreement with Holloman Energy Corporation (“HEC”) to acquire its 48.5003% interest in the PEL 112 and 444 license (the Licenses) in the world-class Cooper-Eromanga Basins in South Australia.

Pursuant to the share purchase agreement entered into with HEC, the Company will acquire 100% of its wholly-owned subsidiary, Holloman Petroleum Pty Ltd (“HPPL”) for gross consideration of 40,416,917 ordinary shares in the Company (Shares) at a deemed price of 0.3 cents and A$24,250 for a total consideration of A$145,500. The key terms of the share purchase agreement are set out below. The Company has today issued 24,250,150 ordinary shares as initial consideration (T1) with the final balance of 16,166,767 shares and A$24,250 payable at completion, which is to occur on or before 30 September 2019 (T2). The issue of the T2 shares by Oilex is subject to shareholder approval under Listing Rule 7.1.

The Company is in discussions with the remaining holders in the License to further increase its participating interest in PEL 112 and 444.


PEL 112 and PEL 444

The Licenses are held in two Petroleum Exploration Licenses (PELs) located 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 1166 square kilometres. Each PEL is currently in temporary suspension at the request of the current License holders (a provision with the South Australian government where work obligations are suspended for a fixed period) expiring on 31 July 2019 and for which the Company understands that a further extension will be sought. The PEL’s carry an obligation to drill one well each before January 2021 (PEL 112) and January 2022 (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.

Undrilled structural prospects and leads have been identified in both blocks. Oilex’s intention is to re-evaluate the 3D seismic data using advanced IP which is designed to fast track the identification of stratigraphic features and geobodies. Importantly the Western Flank discoveries include many fluvial channel features and the stratigraphic section lends itself to the development of many more stratigraphically trapped hydrocarbon pools. Additional technologies available to Oilex include rapid, low-cost reconnaissance tools aimed at testing the presence of hydrocarbon signatures in the atmosphere and in the soils overlying hydrocarbon accumulations.

The PEL’s are favourably situated given the proven westward migration of oil from the Patchawarra Trough to the Western Flank fields and particularly the presence of oil in a well just to the east of PEL 444. Oilex believes that the existing high-quality 3D data coupled with advanced evaluation tools will result in the identification of new targets for stratigraphic oil pools within these licenses.

Terra Nova Energy (Australia) Pty Ltd holds a beneficial interest in and is the operator of the Licences.


Key terms

The key terms of the share purchase agreement are as follows:

· HPPL assets and liabilities: On completion, HPPL must hold no assets or liabilities other than its interest in the Licenses and its portion of the bonds held by the applicable South Australian governmental agencies.

· Non-refundable deposit: The issue of the T1 shares is a non-refundable deposit.

· T2 Consideration: At completion, the Company will be required to issue the 16,166,767 T2 shares and a cash payment of $24,250 together with a cash payment of $48,500 in consideration for its portion of the bonds held by the applicable governmental agencies in respect of the Licenses.

· Conditions precedent: Completion remains subject to and conditional on the receipt of shareholder approval for the issue of the T2 shares; and the receipt of any consent, approval or signed document that is required to be obtained from any third-party or governmental agency in connection with the transaction. These conditions must be satisfied (or where permitted, waived) by no later than 30 September 2019. The necessary waivers and consents under the Joint Operating Agreement have been obtained.

· Top-Up Cash Consideration: If, before completion, the Company undertakes an equity raising in excess of A$1 million by an issue of shares at an issue price per share of less than the deemed price of A$0.003, then at completion, the Company must pay the vendor such cash consideration as is equal to the difference in value of the T1 and T2 shares at the deemed price calculated at the average issue price of the equity raising.


Managing Director, Joe Salomon, said: “We are pleased to announce this new acquisition in the world-class Cooper-Eromanga Basins. The Company has been actively reviewing the basin for more than two years and we anticipate today’s first step will be expanded on in the near future. The basin is well endowed with infrastructure providing for attractive low-cost discovery and development for Oilex.”

The Company remains committed to unlocking the potential of its Cambay Project in India and delivering value to its shareholders. The Cooper-Eromanga Basins provides an opportunity for shareholder value accretion while preserving significant exposure to the significant potential at Cambay.”


Section 708A(5)(e) Notice and AIM Application

The issue of 24,250,150 shares to Holloman Energy Corporation (the Shares) is made under the Company’s Listing Rule 7.1 capacity. Oilex gives notice under section 708A(5)(e) of the Corporations Act 2001 (Cth) (Act) that:

1. Oilex issued the Shares without disclosure to investors under Part 6D.2 of the Act;

2. as at the date of this notice, Oilex has complied with:

(a) section 674 of the Act; and

(b) the provisions of Chapter 2M of the Act as they apply to Oilex; and

3. as at the date of this notice, there is no information that is ‘excluded information’ within the meaning of sections 708A(7) and 708A(8) of the Act.

Admission of 24,250,150 shares on AIM is expected to become effective and dealings to commence at 8.00 a.m. on 13 August 2019. Following Admission of these shares, the Company will have 2,611,568,151 shares on issue. The Company does not currently hold any shares in treasury. Accordingly, the total number of voting rights will be 2,611,568,151. In addition, please find attached the applicable ASX Appendix 3B.


Further information will be provided as it becomes available.

For and on behalf of Oilex Ltd

Joe Salomon

Managing Director


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