I won't put any spin on the report other than to say it was...

I won't put any spin on the report other than to say it was typically worded by Oilex, with the devil in the
detail.

77H is NOT commercial - a return of 360mmscfge over 3 years is miniscule. Will return about $3-4million
in revenue for a well that costs 12m+. The reporting of the result was based on the period of flow-back &
testing. Testing took 3-4 weeks, flow-back had already commenced 2 months previously. So, forget about
the 24 hour flow rate of 2.03mmscfge/d. If it flowed at that rate over 3 years 77H would return 2.2BCFGE,
not the 360mmscfge as forecast.

Total hydrocarbon production over this period was 43mmscfg + 3372 bbls oil. Using their 5800scfg = 1boo,
then about 0.62mmscfge/d over a 100 day period or 62mmscfge in total, comprised of 0.43mmscfg/d +
33 boop/d. IF it flowed at this rate {ie 0.62mmscfge/d} then over 3 years that should return 678mmscfge
in total v 360mmscfge given as forecast for 77H. So expect further declines by around half from the
current 0.62mmscfge/d to 0.4mmscfge/d or lower over that 3 years or 68 boopd.

On the positive side, there has still been no water formation outside of the recovered frac water, of which
88% has finally been recovered.

If you extrapolate the result of 77H @ 360mmscfge recovered over 3 years ;


Frac efficiency estimated at 25% only, assume 100% next well = 1.5BCFGE + double the lateral
to 700m = 3BCFGE total. Interesting that Oilex comes up with pretty much the same figure ; 3.5BCFG
recovered on a 700m lateral BUT over 10 years which = a flow rate of 0.96mmscfg/d or 165 bopd. Geez,
I'de wanna get it out of the ground a bit quicker than that for a decent ROI. Not sure why they give 10
years, I would think if they can get it ALL right then it should be recovered in half that time at least.

Still, certainly positive signs if they can employ 1400m laterals. Frac it efficiently and start realising
those 6BCFG figures Oilex have quoted/forecast & extract it in 3-5 years rather than
the 10 years given..

Alas, that is going to take some time I would imagine. Time-line looks long to the next drill and no
doubt a CR will be in the offing to fund it. 77H's production income @45% to Oilex will hardly
pay admin for the year. Will be interesting to see the final costs for 77H. Oilex now stuck in the
same poor sentiment and oil price {although their gas is a fixed price @$8mscfg} as the rest
of the oilers.

Yep, promising as usual. 3rd time lucky perhaps? It may take 5 times, who knows? I'm sure
Cambay has a future, not sure the current team can pull it off.

GLTAH