OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

January 24, 2007 07:48 ET

Oilexco Signs Farm-in Agreement for Ptarmigan

CALGARY, CANADA--(CCNMatthews - Jan. 24, 2007) - Oilexco Incorporated (TSX:OIL)(AIM:OIL)("Oilexco") and its wholly owned subsidiary Oilexco North Sea Ltd have entered into an agreement that will allow Oilexco to earn a 60% working interest in the undeveloped Ptarmigan oil discovery located in Block 15/29a in the UK Central North Sea.

Oil was discovered at Ptarmigan in Paleocene Forties sands by the well 15/29a-9 in 1994. This well flowed 1,889 barrels of 43 degrees API oil per day and 1.4MM cubic feet per day of gas through a 28/64" choke, at 1112 psi flowing pressure, from 20 feet of perforations in a 54 foot thick oil bearing sand.

Oilexco will earn its 60% interest in Ptarmigan by paying 100% of the costs to drill a three leg appraisal well to original 15/29a-9 discovery well. Upon completion of the appraisal drilling program Oilexco's equity interest partners at Ptarmigan will be as follows: Chevron 28%; Conoco Philips 10%; Gaz de France 2%. Oilexco will be named as operator of Ptarmigan upon completion of the program, subject to approval by the Department of Trade and Industry (DTI). Drilling operations at Ptarmigan are scheduled to commence in the second quarter.

The Ptarmigan oil accumulation is located 15 kilometers southwest of Oilexco's Brenda oil development. Once the appraisal drilling has been completed, Oilexco and its partners will explore all options for early field development including the option of a sub-sea tie-back to the production manifold at Brenda.

"Oilexco is the right kind of company to bring Ptarmigan into production quickly, and we look forward to a successful appraisal program which will allow us to move forward on it with our partners", said Oilexco President & CEO Arthur Millholland.

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.

In accordance with the guidelines of the AIM market of the London Stock Exchange, Arthur Millholland P.Geol, President and CEO of Oilexco Incorporated, is the qualified person that has reviewed the technical information contained in this press release.

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