Geez, when I first read the quarterly I thought, here we go,...

Geez, when I first read the quarterly I thought, here we go, ambiguous statement like many other anns from
many other companies that I have been invested in. They state that 789 barrels of oil had been produced
"during the reporting period" from the Cambay FIELD. Let's try and break this down a little. I've studied the
wells that have been VERTICALLY drilled in the cambay and 15 of those have produced a total of 1038
barrels of oil or 69 barrels of oil each on average. That is per day but no information regarding decline rates
etc, not sure if those figures were for the initial 24 hour flow rate or over a longer period. I tend to think that they
were 24 hour flow rates.

So it is clear that those 789 barrels of oil were produced from 77H thus far, during the "reporting period"
with 60% of frac fluids still to be recovered. 14/7 ann reported milling ops complete and flow back to
commence. 21/7 ann reported light oil recovered "exceeding expectations" and then the quarterly issued
24/7. Lets say it takes a few days to prepare the 24/7 ann and flowback commenced on 15/7, so let's
call it 7 days. That is an average of 112 bopd then. If we extrapolate that 60% of frac fluids were still to be
recovered then quid pro quo, that would maybe equate to 280 bopd once all frac fluids are recovered. A
simple calculation admittedly but that is all we have to go on so far. The flow could genuinely be higher
than that once all fluids are recovered, it could also conceivably be less.

Let us assume that the production flow rate is 4mmscfd {as Oilex has stated it needs to be for it to
be commercial}. 4mmscfd at $8mscf = $32K per day + 280 bopd x $100 = 60K per day. $21 million
a year revenue from this well, Oilex @45% = 9.5 million per year revenue. The missing link is of
course EUR and flow decline rates. If however it took 2 years to recover each reservoir then 19 million
in revenue per well less well cost {call it 4 million @ 45% oex share assuming we can get the well costs
down to 8-10 million with economies of scale} Leaves 7.5 million per year before taxes etc. Approx 30-35%
taxes, admin etc leaves approx 5 million net revenue per year to Oilex. 100+ wells on the field over its
lifetime, 25 operating concurrently per year once we have our own rigs and crews. Net revenue from
25 wells at these rates gives 187 million per year or EPS of 31c. P/E ratios for an oiler can vary between
5-10 times. Call it a PE of 5, gives a SP of $1.55.

Sorry to bore you guys but I just can't help myself. A lot of assumptions here but just trying to get a
handle on where the SP could be IF 77H gives a great result and the field eventually is proven up to be
commercial. A man can dream at this stage surely.

As noted, 77H is 1km from 73 which produced 1mmscfd and 50 bopd from a vertical execution.
It is probably the same distance from Cambay 19Z which produced 0.8 mmscfd AND 200 bopd
from a vertical execution also.

Fingers crossed

GLTAH