OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

May 16, 2006 17:50 ET

Oilexco Accepts US$50 Million Increase in Bank Financing

CALGARY, CANADA--(CCNMatthews - May 16, 2006) - Oilexco Incorporated ("Oilexco") (TSX:OIL) (AIM:OIL) announces that its wholly owned subsidiary, Oilexco North Sea Limited, has completed the syndication of its previously announced project facility underwritten by the Royal Bank of Scotland Plc (RBS). The new total for the debt financing is US$295 million, and is comprised of US$275 million for a revolving project facility and US$20 million for unbudgeted cost overruns. In November 2005 the company announced that its financing was for a total of US$245 million.

The project facility is currently being used to fund Oilexco's development of its 100% owned Brenda Field and 70% owned Nicol Field. The credit facility can be accessed for future developments other than Brenda/Nicol, subject to the banks receiving satisfactory documentation, completing due diligence and achieving any required conditions precedent.

"In March 2006 we presented our company's plans to a group of international oil and gas lenders led by the Royal Bank of Scotland to syndicate the project facility of our Brenda and Nicol developments," said Oilexco CEO Arthur Millholland. "The response was overwhelmingly positive, with 9 banks in addition to RBS joining the syndicate. As such, we were advised that we could extend the total amount of the facility. While we do not require the additional funding for our Brenda/Nicol development, the US$50 million extension will allow us enhanced flexibility as we look to develop future properties based upon our aggressive exploration and appraisal program", he commented. "It is a large stamp of approval by our debt financers not just on our current developments, but for the direction Oilexco is headed", Mr. Millholland said.

Forward Looking Statements

This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond Oilexco's control, including: the impact of general economic conditions in the areas in which Oilexco operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore Oilexco's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, which Oilexco will derive therefrom. All statements included in this press release that address activities, events or developments that Oilexco expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include future production rates, completion and production timetables and costs to complete wells, and production facilities. These statements are based on assumptions made by Oilexco based on its experience perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.

Oilexco is listed on the Alternative Investment Market of the London Stock Exchange plc and the Toronto Stock Exchange, in each case trading under the symbol OIL.

Contact Information

  • Oilexco Incorporated
    Arthur S. Millholland
    President
    (403) 262-5441
    or
    Oilexco Incorporated
    Brian L. Ward
    Chief Financial Officer
    (403) 262-5441
    or
    Oilexco Incorporated
    Gerry L. Roe
    Chief Operating Officer
    (403) 262-5441
    or
    Oilexco Incorporated
    Rob Elgie
    Manager Investor Relations
    (403) 262-5441
    Website: www.oilexco.com