IMDEX LIMITED — Interim / Quarterly Report 2008

Feb 17, 2008

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15 February 2008

Australian Stock Exchange Limited Company Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2001

BY ELECTRONIC LODGEMENT

Dear Sirs

RESULTS ANNOUNCEMENT, APPENDIX 4D AND FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Please find attached a statement by the Chairman of Imdex Limited regarding the Group’s financial results and operating performance for the half year ended 31 December 2007.

The Appendix 4D and Financial Report for the half year ended 31 December 2007 follow this announcement.

Yours faithfully Imdex Limited

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Paul Evans

Company Secretary

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Imdex Limited ACN 008 947 813 ABN 78 008 947 813 Level 1, 15 Rheola Street West Perth Western Australia 6005 PO Box 1325, West Perth Western Australia 6872 Phone +61 8 9481 5777 Fax +61 8 9481 6527 E-mail imdex@imdexlimited.com.au R:\Financial Reports\Half Year Reports\2007\ASX Release Docs\FY08 Half Year Results ASX Announcement.doc

Quality Endorsed

Company ISO 9002 LIC: QEC 2807 Standards Australia

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STATEMENT BY THE CHAIRMAN OF IMDEX LIMITED

FINANCIAL AND OPERATING PERFORMANCE FOR THE HALF YEAR ENDED 31 DECEMBER 2007

Imdex Limited (ASX:IMD), the Perth-based global supplier of drilling products and services, has reported a 115% increase in net profit after tax (excluding the profit on sale of Surtron) for the half year ended 31 December 2007.

The result reflects the success of the many strategic initiatives undertaken in recent years to reposition the Imdex Group. Today, it is a leading supplier of drilling products and services globally.

Strong operational growth drove positive financial outcomes among all the recent business acquisitions which have been critical to the strategic repositioning of the company.

• Revenue from operations, including Surtron, rose 45% from $53.1 million to $76.8 million.

• Net profit after tax rose from $6.0 million to $22.0 million, including $9.1 million from the sale of Surtron.

• The current period results have been impacted by the sale of the Surtron business, effective 31 October 2007. The Surtron business contributed $1.2 million in profit before tax for the four months. The sale realised a profit of $12.0 million before tax.

• Basic earnings per share from continuing operations have grown from 3.65 cents to 6.34 cents, a 74% increase.

The Directors are pleased to declare an increased interim dividend of 1.75 cents a share payable on 25 March 2008 to shareholders registered on 7 March 2008. The dividend in the previous corresponding period was 1.0 cent a share

Directors have upgraded their profit expectations for the full year.

HIGHLIGHTS

Among the highlights contributing to the overall results were:

• growth in earnings before interest, tax and amortisation (EBITA) from operations of 87% to $21.1 million;

• acquisition of Canadian-based Poly-Drill Drilling Systems (Poly-Drill) for $3.7 million, effective 1 July 2007;

• acquisition of a 75% interest in Kazakhstan-based Suay Energy Services (Suay) for $0.5 million, effective 1 July 2007;

• acquisition of Chilean-based Southernland SA (Southernland) for $2.9 million, effective 1 November 2007;

• the profitable divestment of the Surtron business for $17.5 million;

• the strengthening of our senior management team through the addition of a number of key managers with valuable industry experience; and

• net cash inflow from operations before tax payments of $11.9 million.

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BUSINESS PERFORMANCE

The Imdex group is divided into two operational divisions.

Drilling Fluids and Chemicals Division

The Drilling Fluids and Chemicals division (DFC) comprises:

• Australian Mud Company based in Perth;

• Samchem Drilling Fluids and Chemicals (Samchem) based in Johannesburg, South Africa;

• Poly-Drill Drilling Systems based in Calgary, Canada

• Suay Energy Services based in Aktau, Kazakhstan; and

• Southernland based in Santiago, Chile.

These businesses manufacture and sell drilling fluids and chemicals to the mining, oil and gas, water well, civil and horizontal directional drilling industries. Fluids and chemicals are required in the drilling process primarily to cool and lubricate the drill bit, keep the hole open and to return cuttings to the surface.

DFC has grown both organically and through acquisition activity in the current period with revenue increasing 46% to $42.3 million ($29.1 million in prior period) and operational EBIT increasing 70% to $7.6 million ($4.5 million in prior period).

The businesses within DFC are positioned for further growth from global alliances and ongoing organic sources.

During the last six months, Suay successfully expanded into the on-shore oil and gas market in the Caspian Sea region. Suay has been recruiting additional local engineers to boost its market penetration in the region.

Samchem extended its reach in the East African oil and gas market. It has achieved increased market penetration for its dust suppression products in South Africa. Those products are now being introduced into the Australian market. Samchem has increased plant capacity to match its marketing success.

Southernland has located larger premises in Chile to accommodate expanded and more modern manufacturing capacity.

Drilling Products and Services Division

The Drilling Products and Services division (DPS) comprises:

• the Reflex Group of companies, based in Australia, Sweden, South Africa, Chile and Canada;

• Chardec Technologies Ltd (Chardec), based in the United Kingdom; and

• the Flexit Group of companies (Flexit), based in Sweden.

These businesses, organised globally, use proprietary technology to manufacture and distribute a range of advanced down hole tools. The tools are used in a variety of drilling applications such as surveying drill holes and providing core orientation data.

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Divisional revenue (excluding trading result from Surtron) increased 59% to $26.8 million ($16.9 million in prior period). Divisional EBIT (excluding trading result from Surtron) increased 112% to $10.5 million ($5.0 million in prior period).

Following the divestment of the Surtron business DPS will continue its focus on the manufacture and supply of down hole instrumentation.

DPS made significant progress during the period in improving its financial outcome and positioning the division for further growth through:

• refinement and improvement of tools to ensure technology leadership;

• ongoing international roll out of the Core Orientation Tool;

• further cost savings through integration of the various back office functions of previously independent companies; and

• exciting R&D projects which will increase product offerings, boost market share and help the company diversify into new markets, particularly oil and gas.

RECENT ACQUISITIONS

To extend global reach and broaden the range and quality of products and services, a number of acquisitions were made during the half year under review. These acquisitions are an important part of the strategy of supporting global alliances with major international drilling and supply companies.

Poly-Drill

Calgary based Poly-Drill Drilling Systems Limited and its subsidiary Poly-Drill Arizona LLC were acquired with effect from 1 July 2007. The Canadian company manufactures and sells polymer drilling fluid based systems and solids control systems.

The fluid systems developed by Poly-Drill enable drilling without the use of numerous conventional drilling fluid products, such as fluid loss control additives and gels. The fluid systems are in use throughout North America and have established new standards in drilling fluid technology.

The Poly-Drill acquisition extends the global reach of the company and facilitates its aim of becoming a significant drilling fluids and chemicals supplier to the mining, oil and gas and water well industries in North America.

Suay Energy Services LLP

A 75% interest in Suay Energy Services LLP was acquired with effect from 1 July 2007. Suay provides services to the Kazakhstan oilfields in the Caspian Sea region. Kazakhstan has a fast developing oil and gas industry.

Suay complements the existing businesses of Imdex. It contributes to the group’s global strategic positioning by offering an excellent platform for expansion in this highly prospective oil and gas region. The business is also targeting markets in Turkmenistan, Kurdistan, Azerbaijan, Uzbekistan and the border regions of Russia.

A conditional Protocol of Intentions has recently been signed to acquire the remaining 25% of Suay on or before 30 June 2008 for $0.5 million in cash and 200,000 fully paid ordinary shares in Imdex Limited at an issue price of $2.50 per share.

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Southernland S.A.

Imdex purchased 100% of Southernland SA, a drilling fluids manufacturer and supplier based in Santiago, Chile, effective 1 November 2007.

The Metals Economics Group (MEG) estimates that Latin America accounted for 24% of total worldwide exploration expenditure in 2007, more than Canada, Africa or Australia.

The Southernland acquisition complements the existing DFC businesses and establishes a manufacturing presence in Chile. Such a local presence will be able to support strategic alliances in the region. Strong growth is expected in this market as Imdex increases its business profile to take advantage of the opportunities. An Australian senior manager has relocated to Santiago to drive growth in key markets such as Mexico, Chile, Peru, Argentina and Brazil.

Subsequent Event – Acquisition of System Entwicklungs GmbH

On 25 January 2008, Imdex acquired System Entwicklungs GmbH (SEG) based in Riegel, Germany for $13.8 million. The acquisition is effective from 1 January 2008.

This acquisition is another step in the company’s strategy to grow globally in the oil and gas sector through the provision of drilling fluids and chemicals and down hole instrumentation. The acquisition expands the lmdex product range enhancing the company’s position as a leading global supplier of technologically advanced down hole survey systems.

As well as its many strategic advantages, the acquisition will also give Imdex an attractive financial return.

SEG was founded in 1976 and has developed the Target INS , a technologically advanced drill hole survey tool, primarily for the oil and gas industry. The Target INS gives lmdex instant access to an oilfield grade tool with north seeking capability. This is the first of a suite of tools which lmdex will develop and market to the oil and gas industry.

The Target INS is at the beginning of its commercial life cycle. Development of the Target INS commenced in the early 1990's. Completed units were only recently introduced to the market.

The Target INS gives lmdex access to world class technology and improved opportunities for product development through the technical team at SEG which complements the research and development capability of Chardec and Flexit.

INVESTMENTS

Sino Gas & Energy Ltd

Imdex holds 13.6% of the ordinary share capital of Sino Gas & Energy Limited (SGE), a company operating in the tight gas sands and coal bed methane industry in China. SGE is the operator in the exploration and development of three Production Sharing Contracts in the onshore Ordos Basin in northern China.

The investment in SGE which cost $0.3 million had a fair value for accounting purposes of $4.5 million at 31 December 2007.

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Imdex has advanced $10.8 million to SGE as a short term facility pending finalisation of its longer term capital raising initiatives. The funds advanced are secured by a fixed and floating charge over the assets held by SGE. The loan bears interest at 13.5% per annum.

This is a non-core asset which the company expects to dispose of by 30 June 2008. Funds raised from the sale are expected to reduce debt and fund further acquisitions.

COMPANY OUTLOOK

Recent acquisition and divestment activity has positioned the Imdex Group as a streamlined, focussed and globally balanced business able to support customers and strategic alliance partners in all major mining and exploration regions worldwide.

Current strong demand is expected to continue for the remainder of FY08.

• Asia Pacific should continue to grow organically fuelled by the commodity demands of emerging economies in China and South East Asia.

• Our African footprint should grow due to increased mining and exploration activity. In particular, we expect our East African operations to expand as a result of establishing a presence in the on-shore oil and gas market in the region.

• Organic growth in the Americas will be assisted by key supply and distribution alliances. Expanded manufacturing facilities will be established at Poly-Drill and Southernland. This growth is to be supported by experienced Australian operational managers.

• The ongoing emphasis on research and development will help maintain the company’s competitive edge.

Based on financial performance to date and current market conditions, the Directors are pleased to upgrade the full year revenue target to $152 million at similar EBITA margins to those achieved in the first half.

\

Ian Burston Chairman

For further information , please contact:

Bernie Ridgeway, Managing Director Ian Burston , Chairman Paul Evans , Chief Financial Officer and Company Secretary Ph: +61 8 9481 5777 Email: imdex@imdexlimited.com

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Imdex Limited

Summary Financial Highlights for the Half Year Ended 31 December 2007 (Results Reviewed by Auditors)

			Consolidated	Consolidated
			Half Year Ended	Half	Year Ended
			31 Dec 2007	31	Dec 2006
			$’000		$’000
Revenue from continuing operations			70,205		46,547
Revenue from discontinuing operations			6,584		6,594
Total Revenue			76,789		53,141
	Change in percentage - Total Revenue		45%
Operating Profit before Interest, Tax, Depreciation and Amortisation *			22,954		12,916
Depreciation*			(1,897)		(1,668)
**Earnings before Interest, Tax & Amortisation (EBITA) ***			21,057		11,248
EBITA margin *			27%		21%
	Change	in percentage - EBITA	87%
Amortisation *			(2,547)		(1,433)
Net interest expense*			(385)		(1,190)
Operating Profit before Tax*			18,125		8,625
Income tax expense*			(5,230)		(2,639)
**Net Profit after Tax ***			12,895		5,986
		Change in percentage	115%
Profit from discontinued Surtron operations
Profit on sale of Surtron business			11,950		-
Tax effect on discontinued operations			(2,828)		-
Net Profit for the Half Year			22,017		5,986
		Change in percentage	268%
EBITA of continuing operations			19,849		10,135
		Change in percentage	96%
Basic earnings per share from continuing operations (cents)			6.34 ¢		3.65 ¢
		Change in percentage	74%
Net Cash provided by Operating Activities before Tax			11,949		8,296
		Change in percentage	44%
Cash on hand			16,614		6,737
		Change in percentage	147%
Net Assets			100,538		37,475
		Change in percentage	168%
Net Tangible Assets per Share			17.89 ¢		(6.80 ¢)
		Change in percentage	363%

• Include Surtron discontinued operations that are separately disclosed on the face of the statutory income statement

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