Oilex updates West Kampar PSC

The following is an excerpt from Australian firm Oilex Limited on Central Sumatra exploration block project, taken from the quarterly report ended August 16, 2012, released on Thursday.

West Kampar Asset, Sumatra
(Oilex: 45% interest + 22.5% security interest)

? The Company was assigned a 45% participating interest in the West Kampar Production Sharing Contract (?PSC?) pursuant to a farm out agreement entered into with PT Sumatera Persada Energi (?SPE?). The West Kampar PSC dated 7 October 2005 covers an area of 4,471 square kilometers located in central Sumatra . Drilling and testing of the Pendalian-3 well in 2007 was funded by the Company and confirmed the presence of two shallow producible oil zones in the Sihapas Sandstone reservoirs which have subsequently been developed.
? In 2008 the Company entered into a second farm out agreement to acquire 15% additional equity. In January 2009 the Company terminated the second farm out agreement when conditions were not met by the due date. With the termination of the farm out agreement, SPE is required to reimburse the monies advanced by the Company under the terms of the agreement. The Company commenced International Chamber of Commerce (?ICC?) Arbitration following SPE?s failure to repay a debt owing to the Company. In 2010 the International Court of Arbitration of the ICC found in favour of the Company in its claim requiring SPE to pay the Company US$4.6 million dollars.
? Negotiations are continuing as the Company pursues a commercial resolution to the joint venture dispute. At the same time, the Company intends to protect its participating interest in the West Kampar PSC and to pursue enforcement of its Arbitration Award as appropriate.
? The Company understands from industry communications and reports in the Indonesian press that SPE has drilled and tested further wells in the Pendalian Field. The Company is aware of Indonesian press articles which have claimed significant flow rates from multiple zones in the Pendalian Field. Due to SPE?s claim relating to the Company?s interest in the PSC, the Company has, despite numerous requests, not been provided by SPE with any data relating to the West Kampar PSC operations. The Company is therefore unable to comment on or endorse the press reports. (end of excerpt)