Ann: 2014 Annual Report to Shareholders, page-32

I don't think that's totally true. I don't recall any monsoons sweeping through our neck of the woods in the last 6
months or time lost due to inclement weather. Most of what was required was already on site during fraccing
and milling operations. All that we needed {apart from the frac tree we released a tad early and had to
retrieve} was about another 10 000 barrels of water. Skills? Well I would assume that with SLB running the
show that most senior positions would be highly experienced personnel with previous fraccing experience.
The formation we are drilling is hardly a virgin per se. Admittedly, this is only the
second major horizontal well to be attempted, however ;

" technical/geological risks have been reduced by the historical drilling of 36 wells that have penetrated the Eocene and 16 vertical wells which have tested oil and gas within the Cambay Field". Furthermore, the Cambay-76H well which was a horizontal well drilled in 2012 (first horizontal well drilled in India) flowed hydrocarbons to surface before well control issues and drill pipe integrity problems down hole forced the well to be suspended before an extended well test could be delivered. "

Oilex itself has drilled 4 or more vertical wells, the latest being well 73 which flowed 1mmscfgd after re-entry and a production test.

Lessons Learnt from Cambay-76H Well to be incorporated into 77H Well

• Casing should be designed for higher safety to mitigate high reservoir pressure and fracture stimulation.
• Use equipment and procedures for a high formation pressure environment.
• Continue to use synthetic oil base mud (SBM) for drilling operations.
• Fracture stimulations to use a plug and perf technique
• Importantly OEX will have significantly more experienced personel on the ground for the Cambay- 77H well which should reduce the execution risk

Well they've done all the above so I'll stick to my theory, based on no results from 76H that they have based their fraccing process more in line with the results of 73 {1500m away}. That was 1mmscfgd & 25 bopd v 75 bopd for 77H. I think the propane/gel content was insufficient to open the fractures significantly enough to expel the oil. Most of it has probably opened up the rocks initially only to have been expelled quite rapidly thereafter, causing the fractures to close back up. That would explain the well blockages and subsequent flushing required & the poor pressure at the moment. And you can say what you like, even at a 22/64 choke which in fact a lot of the wells I have observed in the EFS operate at, that is POOR pressure.

Anyway, as I have stated before, that {if it turns out to be correct} is no crime. Mistakes are made, particularly for the hopefully, 1st production tested horizontal post 76H.I just hope we get an honest appraisal post 77H if the news does in fact turn out to be bad. The market says so, SP now at 8.5c, that's 65% off it's high 2 months ago, but more importantly 3c below its price pre-21/7 ann announcing light oil shows etc. Deemed riskier at this stage than during drilling of the actual well if the SP is saying anything.

Hoping for an update within the next week or 2 and a successful production test soon there-after.

GLTAH