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Oilex Limited OEX Quarterly Report to Shareholders 30 September 2012

  Oilex Limited (OEX) - Quarterly Report to Shareholders 30 September 2012

RNS Number : 9093P
Oilex Limited
30 October 2012




                       QUARTERLY REPORT TO SHAREHOLDERS

                              30 SEPTEMBER 2012

                                   Summary

Cambay PSC (45% & Operator) onshore Gujarat, India

· Independent review of Cambay-76H, completed post 30 September 2012, has
provided various  recommendations  to  minimise the  risk  of  similar  issues 
recurring in the planned offset well.

· Importantly,  significantly higher  pressures  and associated  flow  of 
hydrocarbons -  very positive  in  tight reservoirs  - were  encountered  post 
fracture stimulation  of the  reservoir  and had  a  direct influence  on  the 
outcome of the Cambay-76H well.

· Now  in  the  process  of finalising  well  design  and  assessing  the 
availability of a rig and long lead time equipment for the Cambay offset  well 
while waiting on approvals.

JPDA 06-103 PSC (10% & Operator) offshore Timor Sea

· The Bazartete prospect, the location of the third commitment well,  has 
the potential  to  contain  70.8  million  barrels  of  mean  prospective  oil 
resources (Oilex  assessment,  unrisked, 100%  basis)  with a  23%  chance  of 
success.

· Investigations are ongoing  to secure a suitable  rig for drilling  the 
Bazartete prospect.

· The current contract  period expires on 15  January 2013 and a  request 
for extension of the period has been made to the regulatory authority.

Corporate

· Successfully  completed $7.09  million (gross)  capital raising  via  a 
fully underwritten entitlement offer.

· Implemented a  cost reduction  program that  has already  significantly 
lowered executive personnel and overhead costs

· Cash position of $9.5 million as at 30 September 2012.

· Michael Maloney appointed Chief  Operating Officer based in India  with 
primary responsibility  being  the  development  of  the  Cambay  Field  tight 
reservoir project.

· Andrew Pfaff appointed General Manager Operations, initially  part-time 
and then full-time  in India  when approvals  for the  next phase  of work  at 
Cambay are received.

· The appointment of a Chief  Finance Officer based in Perth is  expected 
to be announced in the next month.



Overview

Oilex has taken  significant steps  forward in its  strategy of  transitioning 
from conventional oil and gas explorer to an early mover unconventional energy
producer, focused  on projects  with world-class  tight reservoir  potential. 
Implementing this  strategy  by  utilising  proven  technology  developed  for 
tight/shale and unconventional  reservoirs in North  America, the Company  has 
completed its first stage objective of securing the services of additional key
personnel  to  form  a  strong  technical  team  to  complement  the  existing 
expertise.

Post 30 September 2012, the review of the Cambay-76H well was completed by  an 
independent  US  expert.   The  recommendations  of   this  review  will   be 
incorporated into the design of future wells.

Oilex has been actively seeking a rig to drill the third well in the Timor Sea
JPDA 06-103 contract area on behalf of  the Joint Venture. Due to the lack  of 
availability of a rig,  an application for an  extension to the contract  term 
has been  submitted  to  the  regulatory  authority,  Autoridade  Nacional  do 
Petroleo.

                              OPERATIONS REVIEW

                         CAMBAY FIELD, Gujarat, India

    (Oilex: Operator and 45% interest)

· Results of the  analysis of the drilling  and completion operations  on 
the Cambay-76H  well  have been  collated  and interpreted  with  the  Company 
engaging an  independent US-based  consultant to  provide an  analysis of  the 
issues with  milling operations  at Cambay-76H  which led  to the  well  being 
suspended before a flow test could be conducted.

· During drilling operations and running casing, the well was  controlled 
using 13.2 ppg mud, indicating formation pressure of approximately 4,000  psi. 
However, post fracture stimulation downhole pressures were in excess of  5,080 
psi for an extended period of time. The conclusion from the independent expert
is that the sustained high pressure  in the months after fracture  stimulation 
indicates probable connection to a deeper high-pressured zone.

· Utilising the  results of this  review, the Company  is finalising  the 
design of the Cambay offset well  and assessing the availability of  equipment 
and materials that are critical to drilling the well, while Oilex awaits final
approvals from the Joint Venture and regulatory authorities.

· The independent expert was provided access to all of the data collected
during drilling,  completion, fracture  stimulation, and  milling and  fishing 
operations, and provided the following conclusions:

o Drilling  of the  well to  2,740m including  640m horizontal  section  was 
completed with minimal problems, ahead of the projected schedule.

o The fracture stimulation was run in  eight stages over seven days with  no 
problems and with good results from the microseismic acquisition.

o Clean out of  the completion assembly  encountered numerous problems  that 
accumulated in their  magnitude after encountering  probable foreign metal  in 
the hole and/or distorted casing leading to suspension of the well.

· Based on the  independent expert's analysis of  the operations and  the 
design of the well, it was recommended  that in order to minimise the risk  of 
similar failures recurring in future wells, the Company take into account  the 
following factors:

o The design of the casing  to incorporate higher safety factors to  counter 
the potential for  deformation during  fracture stimulation  in future  wells, 
given the high natural formation overpressure.

o Recommendations from the service providers for all downhole equipment  and 
procedures will be requested based on the high formation pressure and fracture
stimulation program prior to final selection.

o Continue to use synthetic oil base mud for drilling operations.

o Utilise a rotating head so  that well control operations do not  interrupt 
drilling and clean  out. This negates  the need to  use heavy drilling  fluids 
that may cause formation damage and wellbore blockage.

o Utilise  the natural  pressure in  the formation  to assist  the  cleanout 
operations during milling.

Furthermore, the independent expert concluded  that the structural failure  of 
the drill pipe during cleanout operations was due in most part to high  torque 
caused by  deposition of  precipitates  from the  high density  fluids  inside 
casing and excessive friction due to possible distorted casing. The degree  of 
fatigue that the drill  pipe had undergone prior  to being used on  Cambay-76H 
could not be determined.

This analysis will be  carefully applied in the  design of the planned  offset 
well.

    Cambay-73

· The  Cambay-73  well  is  a  conventional  vertical  well  drilled  and 
completed in 2008  with smaller-scale  fracture stimulation and  10 metres  of 
active perforations in the Y Zone. The clean-up and production from  Cambay-73 
commenced in April and the well was shut-in on 28 June 2012.

· It is  anticipated that  the pressure  and fluid  data recorded  during 
production can be directly  used to model Y  Zone reservoir performance for  a 
horizontal multistage fracture stimulated well. Preliminary results have  been 
encouraging and support previous Cambay-76H production modelling. The well was
flowing at a rate in excess of  300 mcfgd with associated condensate prior  to 
it being shut-in.

· An  application for  resumption of  the Cambay-73  production and  test 
program has  been  submitted  to the  regulatory  authority,  the  Directorate 
General of Hydrocarbons.



                            JPDA 06-103, TIMOR SEA

    (Oilex: Operator and 10% interest)

· The proposed Bazartete-1  well location has been  selected by the  JPDA 
06-103 Joint  Venture as  site of  the third  commitment well.  The  Bazartete 
prospect has been  assessed by  Oilex to have  the potential  to contain  70.8 
million barrels of mean prospective oil resources (unrisked, 100% basis)  with 
a 23% chance of success.

· Negotiations are ongoing to secure  a suitable rig for drilling in  the 
contract area. Well planning and design continued during the quarter.

· The permit Initial Period ends on 15 January 2013. Oilex, as  Operator, 
has requested  an extension  to the  Initial  Period on  behalf of  the  Joint 
Venture. There are no rigs available to  drill the well before the end of  the 
Initial Period.



                        BHANDUT FIELD, Gujarat, India

    (Oilex: Operator and 40% interest)

· Following a  work-over in the  prior quarter, Bhandut-3  flowed gas  to 
surface from a thin gas zone. Commercial options are under investigation  with 
expressions of interest  in acquiring  small volumes  of gas  from some  local 
interested parties.



                       West Kampar PSC, Central Sumatra

    (Oilex: 45% interest + further 22.5% secured*)

· Negotiations are continuing as Oilex pursues a commercial resolution to
the Joint Venture dispute. At  the same time, the  Company has taken steps  to 
protect its participating interest  in the West Kampar  PSC and has  requested 
legal advice from its Indonesian lawyers on enforcing its Arbitration Award in
Jakarta.

* See note to Asset Schedule



                             WA-388-P, Australia

    (Oilex: 8.4% interest)

· The WA-388-P offshore exploration permit term expired on 28 August 2012
and  following  discussion  with   the  National  Offshore  Petroleum   Titles 
Administrator ("NOPTA"), the Operator advised NOPTA on 8 October 2012 that the
joint venture partners  had elected  not to proceed  with the  renewal of  the 
permit. NOPTA advised on  25 October 2012  that the permit  is deemed to  have 
expired on 27 August 2012.





                                  CORPORATE

· The  Company  successfully  completed  a  fully  underwritten  pro-rata 
renounceable entitlements issue during the quarter, raising gross proceeds  of 
A$7.09 million, with the  assistance of Patersons  Securities Limited as  Lead 
Manager and Underwriter. The offer was based on an entitlement to 2 new shares
for every 5 shares held at a price of A$0.07 per share. All participants  also 
received one attaching ASX listed option  for every two new shares  subscribed 
for, exercisable at A$0.15  per share. This  resulted in 101,329,954  ordinary 
shares  being  issued  in  addition  to  50,665,017  15c  options.  A  further 
101,329,954 15c options were issued to the Underwriter.

· Oilex retained cash at the end of the Quarter of A$9.5 million.



· Oilex made strong and tangible progress in its strategic transition  to 
intensify its immediate-term focus on unconventional reservoirs in India.  The 
transition was described at the Extraordinary General Meeting of  shareholders 
on 7 September 2012.



Please refer to the Oilex website for full report.



  Cost reduction program & PERSONNEL CHANGES

· In order to manage  its capital prudently, Oilex  is in the process  of 
implementing  a  comprehensive   cost  reduction  program   as  part  of   its 
re-structuring process.

· Significant changes have been made in the organisation of the Company:

o As  the fundamental  platform of  Oilex's next  phase of  development  and 
growth, a core team has been established to provide the leadership and deliver
the efficient execution of the Cambay project.

The team  comprises  three  new  members, Mr  Mike  Maloney,  Chief  Operating 
Officer; Mr Andrew Pfaff, General  Manager Operations who have been  appointed 
in the last three  months; and a Chief  Finance Officer, whose appointment  is 
expected to be  announced soon.  Mr Pete  Bekkers, Chief  Geoscientist and  Ms 
Andrea Bissett, Financial Controller, who have both been with Oilex since  the 
inception of the Cambay Tight Reservoir Project, are the other key members  of 
the core team.

o With the  core members of  the team  in place, Technical  Director Mr  Ray 
Barnes has advised that he will be  stepping down as a Director at the  Annual 
General Meeting in November 2012. Mr Barnes will not be replaced on the Board.
The Company is grateful for Ray's contribution to the Board and his  technical 
insight during his  tenure, and  appreciates his  offer of  assistance in  the 
future.

o Technical  responsibilities currently  held by  Mr Barnes  will be  shared 
between Mr Pete Bekkers, Chief Geoscientist, and Mr Andrew Pfaff, the recently
appointed General Manager Operations. Mr Bekkers is the principal geoscientist
involved in the subsurface interpretation  of the Cambay Field. Since  project 
initiation, he has  worked closely with  NuTech Energy Alliance  (USA) on  the 
detailed technical analysis,  Morning Star  LLC (USA) on  the tight  reservoir 
engineering  and  resource   certification  advice,   and  Netherland   Sewell 
Associates (USA)  on the  Cambay  resources assessment.  Mr Pfaff  provides  a 
complementary set  of  skills  in  subsurface  engineering  analysis,  design, 
completion, fracture stimulation and  testing of horizontal  wells as well  as 
project management,  broad drilling  and production  operations experience  in 
most of the active US producing basins  where resources are found in tight  or 
shale reservoirs. Mr Pfaff also has the distinct advantage of having worked on
the first tight/shale  gas drilling  programs in China  in recent  years in  a 
joint operating venture with a government-owned oil company.

o Exploration Manager, Mr  John Lamberto has agreed  to move to a  part-time 
role and he will continue to assist the Company in its evaluation of the  JPDA 
joint venture as  well as  specialist geophysics  analysis and  interpretation 
related to the Cambay development program.

o  Costs  for  the  operations  team  in  Gujarat,  India  have  also   been 
significantly reduced with the release of technical personnel who will not  be 
replaced now that the new core technical team is in place.

o It is  anticipated that the  new Chief Finance  Officer will be  appointed 
within the next month and that they will commence duties early in 2013. In the
meantime, the  finance  and commercial  functions  will continue  to  be  ably 
managed by  the Financial  Controller  and the  Chief Operating  Officer  with 
excellent support from the  respective finance and  commercial teams in  India 
and Perth in the interim period.

o The previous Finance Director, Mr  Ben Clube, has not been replaced  since 
his resignation  in  September 2012.  With  the impending  resignation  of  Mr 
Barnes, the Board will be reduced  to four Directors (one executive and  three 
non-executive) and that structure is likely to be retained for the near term.

o The  Managing Director  has offered  to  take a  reduction in  salary  and 
benefits by  20%, reducing  the cost  to $400,000  pa gross  effective from  1 
September 2012.

o The Company has relocated to more economical office premises in Perth.

                   Health, Safety, Security and Environment

No Lost Time Incidents were recorded for Oilex personnel or contractors at any
location during the quarter.





The Company's  website  www.oilex.com.auis  regularly  updated  with  current 
information.

CORPORATE DETAILS
Board of Directors                      Share Registry
 Max Cozijn  Non-Executive Chairman  Security Transfer Registrars Pty Ltd

                                        770 Canning Highway

                                        Applecross WA 6153, Australia
 Bruce       Managing Director
McCarthy                                Telephone:+61 8
                                        9315 2333

                                        Facsimile:+61 8
 Ray Barnes  Technical Director      9315 2233

                                        Email:
                                        registrar@securitytransfer.com.au
 Sundeep     Non-Executive Vice
Bhandari        Chairman                

                                        Computershare Investor Services PLC

 Ron Miller  Non-Executive Director  The Pavilions

                                        Bridgwater Road

 David       Company Secretary       Bristol BS13 8AE
Peterson
                                        United Kingdom

                                        Telephone: +44 (0) 870
                                        703 6149

                                        Facsimile: +44 (0) 870
Capital Structure as at 30 October 2012 703 6116
 Ordinary                            Stock Exchange Listing
Shares
354,676,843
 Listed Options         Australian Stock Exchange
151,994,967
                                         Code: OEX
 Unlisted                            AIM Market of London Stock Exchange
Options
29,725,000                             Code: OEX



                                asset schedule
    ASSET       BASIN / STATE /     JOINT VENTURE     EQUITY %     OPERATOR
                    COUNTRY            PARTIES
                                 Oilex Ltd              30.0
Cambay Field   Cambay/ Gujarat / Oilex NL Holdings      15.0
PSC            India             (India) Limited                Oilex Ltd
                                 Gujarat State          55.0
                                 Petroleum Corp. Ltd
                                 Oilex NL Holdings      40.0    Oilex NL
Bhandut Field  Cambay/ Gujarat / (India) Limited                Holdings
PSC            India             Gujarat State          60.0    (India)
                                 Petroleum Corp. Ltd            Limited
                                 Oilex NL Holdings      40.0    Oilex NL
Sabarmati      Cambay/ Gujarat / (India) Limited                Holdings
Field PSC      India             Gujarat State          60.0    (India)
                                 Petroleum Corp. Ltd            Limited
                                 Oilex (West Kampar)  67.5 ^(1)
West Kampar    Central Sumatra/  Limited                        PT Sumatera
PSC            Indonesia         PT Sumatera Persada    32.5    Persada Energi
                                 Energi
                                 Oilex (JPDA 06-103)    10.0
                                 Ltd
               Flamingo /        Japan Energy E&P       15.0
                                 JPDA Pty Ltd
               Joint Petroleum   GSPC (JPDA) Limited    20.0
JPDA 06-103    Development Area  Videocon JPDA 06-103   20.0    Oilex (JPDA
PSC            /                 Limited                        06-103) Ltd
                                 Bharat
               Timor-Leste &     PetroResources JPDA    20.0
               Australia         Ltd
                                 Pan Pacific
                                 Petroleum (JPDA        15.0
                                 06-103) Pty Ltd
                                 Oilex Ltd               8.4
                                 Gujarat State           8.4
                                 Petroleum Corp. Ltd
                                 Videocon Industries     8.4
               Carnarvon/        Ltd
                                 Bharat                  8.4    Apache
WA-388-P ^(2)  WA /              PetroResources Ltd             Northwest Pty
                                 Hindustan Petroleum     8.4    Ltd
               Australia         Corp Ltd
                                 Apache Northwest Pty   40.0
                                 Ltd
                                 Sasol Petroleum        18.0
                                 Australia Ltd



(1) Oilex (West Kampar)  Limited is entitled to  have assigned an  additional 
22.5% to its  holding through  the exercise  of its  rights under  a Power  of 
Attorney granted by SPE following the failure  of SPE to repay funds due.  The 
assignment has  been provided  to BPMigas  but has  not yet  been approved  or 
rejected. If  Oilex  is paid  the  funds due  then  it will  not  pursue  this 
assignment.



(2) The WA-388-P offshore exploration permit  term expired on 28 August  2012 
and following discussion with  NOPTA, NOPTA advised on  25 October 2012  that 
the permit is deemed to have expired on 27 August 2012.

(1)

LIST OF ABBREVIATIONS AND DEFINITIONS USED HEREIN



MMBO                  Million standard barrels of oil or condensate
MMSCF/DAY             Million standard cubic feet (of gas) per day
BBO                   Billion standard barrels of oil or condensate
BCF                   Billion Cubic Feet of gas at standard temperature and
                      pressure conditions
                      Billion Cubic Feet Equivalent calculated by applying a
BCFE                  condensate gas conversion of 5.62 barrels of condensate
                      per 1,000 standard cubic feet of gas
Discovered in place   Is that quantity of petroleum that is estimated, as of a
volume                given date, to be contained in known accumulations prior
                      to production
Undiscovered in place Is that quantity of petroleum estimated, as of a given
volume                date, to be contained within accumulations yet to be
                      discovered
                      Those quantities of petroleum which are estimated, as of
                      a given date, to be potentially recoverable from
Prospective Resources undiscovered accumulations by application of future
                      development projects. Prospective Resources have both an
                      associated chance of discovery and a chance of
                      development.
                      Those quantities of petroleum estimated, as of a given
                      date, to be potentially recoverable from known
                      accumulations, but the applied project(s) are not yet
                      considered mature enough for commercial development due
Contingent Resources  to one or more contingencies. Contingent Resources may
                      include, for example, projects for which there are
                      currently no viable markets, or where commercial
                      recovery is dependent on technology under development,
                      or where evaluation of the accumulation is insufficient
                      to clearly assess commerciality.
                      Reserves are those quantities of petroleum anticipated
                      to be commercially recoverable by application of
                      development projects to known accumulations from a given
Reserves              date forward under defined conditions. Reserves must
                      satisfy four criteria: they must be discovered,
                      recoverable, commercial, and remaining (as of the
                      evaluation date) based on the development project(s)
                      applied.













For further information, please contact:



Oilex Ltd
Bruce McCarthy - Managing Director:                    +61 (0)8 9485 Australia
oilex@oilex.com.au                                           3200
Tavistock Communications                                   +44 (0)20
                                                            79203150        UK
Ed Portman:                         +44 (0)7733
eportman@tavistock.co.uk                            363501        UK
RFC Ambrian Limited (Nominated Adviser and Joint AIM Broker)
Samantha Harrison                                      +44 (0)20
samantha.harrison@rfcambrian.com                            34406800        UK
N+1 Singer (Joint AIM Broker)
Nick Tulloch                                  +44 (0)131
nick.tulloch@nplus1brewin.com                      2252566        UK



Information in this report relating  to hydrocarbon reserves or resources  has 
been compiled by Mr Ray Barnes  B.Sc. (Hons), the Technical Director of  Oilex 
Ltd who has over 38 years' experience in petroleum geology and is a member  of 
the AAPG.  Mr Barnes  consents to  the inclusion  of the  information in  this 
report relating to hydrocarbon reserves and resources in the form and  context 
in which  it appears.  Resource  estimates contained  in  this report  are  in 
accordance with the standard definitions set  out by the Society of  Petroleum 
Engineers, Petroleum Resources Management System, 2007.

This  document   may  include   forward-looking  statements.   Forward-looking 
statements include, but are not necessarily limited to, statements  concerning 
Oilex Ltd's  planned exploration  program and  other statements  that are  not 
historic facts. When used in this document, the words such as "could", "plan",
"estimate"  "expect",  "intend",  "may",  "potential",  "should"  and  similar 
expressions are forward-looking statements.  Although Oilex Ltd believes  that 
its expectations reflected  in these are  reasonable, such statements  involve 
risks and uncertainties,  and no assurance  can be given  that actual  results 
will be consistent with these forward-looking statements.

                                                                      Rule 5.3

                                      

                                 Appendix 5B

                  Mining exploration entity quarterly report

  Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01,
                              1/6/10, 17/12/10.





Name of entity

OILEX LTD

ABN                 Quarter ended ("current quarter")
 50 078 652 632          30 SEPTEMBER 2012



1  Consolidated statement of cash flows
                                                  Current quarter Year to date

                                                      $A'000       (3 months)
                                                                    $A'000
Cash flows related to operating activities
1.1 Receipts from product sales and related
    debtors                                                    61           61
1.2 Payments for (a) exploration and evaluation           (342)        (342)
     (b) development                     -            -
     (c) production                  (183)        (183)
     (d) administration
    (net)                                                   (684)        (684)
1.3 Dividends received                                          -            -
1.4 Interest and other items of a similar nature
    received                                                   10           10
1.5 Interest and other costs of finance paid                    -            -
1.6 Income taxes paid                                           -            -
1.7 Other (provide details if material)                         -            -
    Net Operating Cash Flows                              (1,138)      (1,138)
Cash flows related to investing activities
1.8      Payment for purchases of:                                         

         (a) prospects                                          -            -

         (b) equity investments                                 -            -

         (c) other fixed assets                              (28)         (28)
1.9      Proceeds from sale of:                                             

         (a) prospects                                          -            -

         (b) equity investments                                 -            -

         (c) other fixed assets                                 -            -
1.10     Loans to other entities                                -            -
1.11     Loans repaid by other entities                         2            2
1.12     Other (provide details if material)                    -            -
         Net investing cash flows                            (26)         (26)
1.13     Total operating and investing cash flows
         (carried forward)                                (1,164)      (1,164)





                                             Current quarter   Year to date

                                                 $A'000      (3 months) $A'000
1.13 Total operating and investing cash
     flows (brought forward)                        (1,164)           (1,164)
     Cash flows related to financing
    activities
     Proceeds from issues of shares,                   6,311             6,311
1.14 options, etc
1.15 Proceeds from sale of forfeited shares                -                 -
1.16 Proceeds from borrowings (net)                        -                 -
1.17 Repayment of borrowings                               -                 -
1.18 Dividends paid                                        -                 -
1.19 Other (provide details if material)                   -                 -
    Net financing cash flows                          6,311             6,311
     Net increase (decrease) in cash held              5,147             5,147
1.20 Cash at beginning of quarter/year to              4,363             4,363
     date
1.21 Exchange rate adjustments to item 1.20                5                 5
1.22 Cash at end of quarter                            9,515             9,515





Payments to directors of the entity and associates of the      Current quarter
directors
                                                                   $A'000
Payments to related entities of the entity and associates of
the related entities
        Aggregate amount of payments to the parties included
1.23    in item 1.2                                                        382
        Aggregate amount of loans to the parties included in
1.24    item 1.10
1.25    Explanation necessary for an understanding of the transactions





2   Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material
    effect on consolidated assets and liabilities but did not involve cash
    flows
    N/A
2.2 Details of outlays made by other entities to establish or increase their
    share in projects in which the reporting entity has an interest
    N/A





3   Financing facilities available                Amount available Amount used

    Add notes as necessary for an understanding        $A'000        $A'000
    of the position.
3.1 Loan facilities                                      -              -
3.2 Credit standby arrangements                          -              -



4   Estimated cash outflows for next quarter $A'000
4.1 Exploration and evaluation                2,000
4.2 Development                                   -
4.3 Production                                  100
4.4 Administration                              700
    Total                                     2,800







5             Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in Current Previous
the consolidated statement of cash flows) to the related      quarter quarter
items in the accounts is as follows.
                                                              $A'000   $A'000
5.1           Cash on hand and at bank                          5,849    3,242
5.2           Deposits at call                                  3,666    1,121
5.3           Bank overdraft                                                 -
5.4           Other (provide details)                                        -
              Total: cash at end of quarter (item 1.22)         9,515    4,363



6   Changes in interests in mining tenements
                                        Nature of
                                         interest     Interest at  Interest at
                           Tenement                   beginning of   end of
                           reference    (note (2))      quarter      quarter
6.1 Interests in mining                  Refer to
    tenements                          Permit/Asset
    relinquished, reduced              Schedule in
    or lapsed                        Quarterly Report
6.2                                      Refer to
    Interests in mining                Permit/Asset
    tenements acquired or              Schedule in
    increased                        Quarterly Report





    Issued and quoted securities at end of current quarter
7
    Description includes rate of interest and any redemption or conversion
    rights together with prices and dates.
                                                                   Amount paid
                                                      Issue price    up per
                           Total number Number quoted per security  security
7.1 Preference
    +securities
    (description)                     -             -            -           -
7.2 Changes during quarter

    (a) Increases through
    issues

    (b) Decreases through
    returns of capital,
    buy-backs, redemptions            -             -            -           -
7.3 +Ordinary securities    354,676,843   354,676,843      Various           -
7.4 Changes during quarter                                     

    (a) Increases through                                                
    rights issue
                            101,329,954   101,329,954        $0.07           -
    (b) Increases through
    employee performance                                                  
    rights issues
                                                                          
    (c) Increases through
    issues (options              22,000        22,000            -           -
    exercised)
                                                                          
    (b) Decreases through
    returns of capital,               4             4        $0.15           -
    buy-backs
                                                                          

                                                                          

                                      -             -            -           -









     Issued and quoted securities at end of current quarter (cont'd)
7
     Description includes rate of interest and any redemption or conversion
     rights together with prices and dates.
                                                                   Amount paid
                                                      Issue price    up per
                          Total number  Number quoted per security  security
7.5  +Convertible debt                                                       
     securities
     (description)                    -             -            -           -
7.6  Changes during
     quarter

     (a) Increases
     through issues

     (b) Decreases
     through securities
     matured, converted               -             -            -           -
                                                        Exercise
7.7  Options                                             price     Expiry date
     (description and
     conversion factor)
                            151,994,967   151,994,967        $0.15  07/09/2015
                             16,687,500             -        $0.30  10/11/2012
                                 75,000             -        $0.50  01/08/2013
                              4,150,000             -        $0.30  01/07/2014
                              8,737,500             -        $0.37  10/11/2014
                                 75,000             -        $0.63  01/08/2015
                                     

     Total                  181,719,967   151,994,967
    

7.8  Issued during
     quarter           151,994,971 151,994,971    $0.15      07/09/2015
7.9  Exercised during                   4           4    $0.15      07/09/2015
     quarter              2008 Performance Rights

                          

                          22,000 Tranche 3
7.10 Expired during       Options
     quarter                    2,000,000           -    $0.30      15/09/2012
7.11 Debentures
                          Nil             Nil
     (totals only)
7.12 Unsecured notes
                          Nil
     (totals only)                       Nil





                             Compliance statement

1 This statement  has been prepared  under accounting policies  which 
comply with accounting standards as defined  in the Corporations Act or  other 
standards acceptable to ASX.

2 This  statement does  give a  true  and fair  view of  the  matters 
disclosed.









Sign here:…………………………………………….Date: 31 October 2012

Managing Director



Print name: B H McCarthy



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCFDFEESFESELS -0- Oct/31/2012 07:00 GMT