OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

July 27, 2005 11:24 ET

Oilexco Announces Contract Awards For Brenda Field Development

CALGARY, ALBERTA--(CCNMatthews - July 27, 2005) - Oilexco Incorporated (TSX:OIL) (AIM:OIL) is pleased to update its activities in the UK North Sea. Oilexco's operations in the UK North Sea, through its wholly owned subsidiary Oilexco North Sea Limited, are currently focused on the development of the Brenda and Nicol Palaeocene oil accumulations located in Blocks 15/25b and 15/25a respectively, and on drilling new exploration and /or appraisal opportunities utilizing the Transocean semi-submersible the Sedco 712, which is contracted to the Company to the end of March 2007.

Oilexco North Sea Ltd is pleased to announce that it has entered into letters of intent with a view to awarding contracts to several leading sub-sea contractors for the Brenda field development. The Brenda field located in the Central North Sea is due to produce first oil in the third quarter of 2006. Oilexco recently announced that it had signed Heads of Agreement with Balmoral Operator - CNR, to deliver Brenda production to the Balmoral platform. The selection of preferred contractors follows several months of careful evaluation, and finalises Oilexco's main contractor line up for the sub sea tieback project which has an estimated value of Pounds Sterling 80 million.

Technip Offshore (UK) Limited has been selected as the preferred partner for the sub sea installation and pipe lay which will connect Brenda to the Balmoral Platform. Meanwhile Dunfermline Scotland based FMC technologies Ltd has been selected to provide four or more sub-sea Xmas trees for the sub sea development. Preliminary work is underway with delivery of the sub-sea trees due towards the end of January 2006. In addition Oilexco has awarded a letter of intent to the Norwegian company FRAMO Engineering AS for the supply of a multiphase subsea pump, metering and manifold skid. Finally, letters of intent have been issued to Baker Oil Tools for the supply of down-hole tools and services, and to Valourec Mannesmann Oil and Gas UK Ltd for the provision of tubulars. Commenting on the selection of the various contractors Oilexco CEO Arthur Millholland says "We are delighted to announce a strong line up of preferred contractors for this strategically significant field development. All of those chosen have excellent reputations in their area of expertise. We are looking forward in the next period to working in partnership with our contractors and their subcontractors to deliver production with our stated timescale."

Oilexco is listed on the Toronto Stock Exchange ("TSX"), and on the Alternative Investment Market of the London Stock Exchange plc ("LSE-AIM") trading under the symbol OIL.

Forward Looking Statements

This disclosure contains certain forward-looking estimates 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 the Company 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. No assurances can be given that the transactions or activities anticipated will transpire or occur, or, 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.

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 North Sea Limited, Aberdeen, Scotland
    David Marshall
    General Manager
    +44 (0)1224 618 900
    Website: www.oilexco.com