Oilex sells Queensland gas assets

West Perth-based oil explorer Oilex NL will sell its onshore Queensland oil and gas assets to Bow Energy Ltd.

Bow, which is based in Queensland, will acquire the onshore permit interests in the Bowen-Surat and Cooper-Eromanga Basins to Bow Energy for 15 million fully paid ordinary shares and 15 million 5-year options to purchase Bow shres at 50c each.

This transaction would make Oilex the largest shareholder in Bow.

The full text of an announcement released by Oilex is pasted below:

Australian-based Oilex NL has reached agreement to divest its onshore Queensland oil and gas assets to ASX-listed Bow Energy Ltd, marking the final step in its repositioning as an international oil and gas company focused on exploration and production development opportunities around the Indian Ocean rim. The first phase of drilling on the Company's portfolio of onshore assets in Gujarat, north-western India is planned to start later this month.

Oilex further strengthened its exploration portfolio in the last week after securing offshore blocks with promising potential in the Timor Sea and Western Australia in joint venture with Indian partners.

The Perth-based Company said today (Thursday) it had reached agreement to sell its onshore permit interests in Queensland's Bowen-Surat and Cooper-Eromanga Basins to Bow Energy for 15 million fully paid ordinary shares and 15 million 5-year options to purchase Bow shares at 50 cents each. As a result of the transaction, Oilex will become the largest shareholder in Bow.

Oilex's Managing Director, Dr Bruce McCarthy, said the agreement with Bow was structured to ensure that Oilex shareholders would benefit from Bow's expertise as a Queensland-focused oil and gas company with a strong exploration, engineering and management team. "Oilex shareholders will retain exposure to any exploration in the expanded portfolio of Australian assets held by Bow and share in any price appreciation of Bow's shares in the event of drilling success in the permit areas," he said.

"Bow plans to participate in several exploration wells on the permits during the next 12 months," Dr McCarthy added. "This agreement enables us to concentrate our resources on our near-term development opportunities in India and our exploration assets in Australia and Oman, while continuing to participate in the upside of drilling programs within these Queensland exploration permits."

"The divestment of these assets is consistent with our strategy of acquiring a balanced portfolio of exploration and production assets in the prospective hydrocarbon basins of India, Australia and the other countries of the Indian Ocean rim," he added. "This marks the final phase in Oilex's restructuring and repositioning as a substantial international oil and gas company with a strong growth focus."

Oilex recently enhanced its exploration portfolio after securing, in joint venture with three Indian partners, an offshore block in the Joint Petroleum Development Area between Timor Leste and Australia located immediately east of several significant oil & gas fields and discoveries including the Laminaria, Corallina and Kakatua fields.

In addition, a consortium of 5 companies led by Oilex was last week awarded permit W05-11, located in the offshore Carnarvon Basin to the north of the Goodwyn/North Rankin producing gas fields and to the north east of the Janz-Io gas discoveries.

To date in India, Oilex has acquired interests in three fields, including a 45% interest in the onshore Cambay Field in Gujarat State - where drilling is scheduled to commence later this month - and a 40% interest in each of the Sabarmati and Bhandut Fields, subject to the approval of the Government of India.

Earlier this year, the Company was awarded an onshore block in Oman with its Indian partners and farmed in with Videocon Industries Ltd and Gujarat State Petroleum Corporation on an offshore block in the Otway Basin in South Australia.