trading on london stock exchange, page-19

There are several risks/benefits associated with Cambay.
1. The reservoir is a tight structure and the fracking operation is the vital part of the success. It remains high risk.
2. The reservoir is in India and there has been an election recently, with Modi looking likely as the possible winner. Modi is Chief Minister of Gujarat, where the Cambay field is. He is pro-business and has made huge progress in Gujarat. He is likely to be a huge supporter of development of Cambay, if the well is a success, the Government support is likely to be strong. This is a huge positive.
3. The management of Oilex has had mixed success and there has been little change over the years. there have been no new board members and the effectiveness of the board is doubtful. The Indian Director was unable to secure Govt approval of the Magna deal within a 6 month period!. The current Directors negotiated the Magna deal that priced the shares at about 6 cents. not smart.
4. The Cambay JV partner is the Indian Government, notoriously slow at making decisions and well known for lack of business acumen, they will still be there, even after the elections. It should be noted that the strong pro-business Govt employees have a history of corruption, so its not quite an easy problem to solve.
5. The regulatory authority in India is called DGH. It is manned by personnel on loan from Government Companies such as ONGC. It is often political rather than practical, so they are quite a challenge to manage. Ask Hardy Oil about DGH's integrity.
6. The lease expires in 2019,(extendable if approved by DGH) not enough time to drill the 100 wells needed to make this reservoir pay well. It has taken 3 years to drill 2 wells.

so this asset requires some pretty smart businessmen, based on the performance of the current leadership, they need to get smarter.

Canning is more within the Directors' capabilities and is where the true value of the company lies. Keep a close eye on this progress, it will become critical to our fortunes.