OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

November 04, 2005 10:18 ET

Oilexco Announces Increased Reserves

CALGARY, ALBERTA--(CCNMatthews - Nov. 4, 2005) - Oilexco Incorporated (TSX:OIL) (AIM:OIL) ("Oilexco") announces that it has received a reserves report as of September 30, 2005 for Oilexco's interest in the Nicol Field located in the UK North Sea. The report by Sproule International Limited ("Sproule Report") was prepared for the purpose of evaluating Oilexco's Petroleum and Natural Gas reserves in accordance with reserve definitions and standards outlined in the Canadian Oil and Gas Evaluation Handbook (COGEH), which are compliant with National Instrument 51-101 (NI 51-101).

Oilexco successfully appraised the Nicol Field located in Block 15/25a in April and May of this year with the well 15/25a-13 and two side tracks 15/25a-13Z and 15/25a-13Y. Oilexco working interest in the Nicol field is 70%.

The following tables summarize the reserves and values as presented in the Sproule Report:



------------------------------------------------------------------------
Remaining Oil Reserves
Mbbls
------------------------------------------------------------------------
Gross Company Gross Company Net
------------------------------------------------------------------------
Proved Undeveloped 8,600 6,020 6,020
------------------------------------------------------------------------
Probable 5,100 3,570 3,570
------------------------------------------------------------------------
Total, Proved plus Probable 13,700 9,590 9,590
------------------------------------------------------------------------
Possible 5,200 3,640 3,640
------------------------------------------------------------------------
Total 18,900 13,230 13,230
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
Net Present Values of Future Net Revenue
Forecast Prices and Costs
As of September 30, 2005
After UK Taxes
------------------------------------------------------------------------
At 0% At 5% At 10% At 15%
M$CDN M$CDN M$CDN M$CDN
------------------------------------------------------------------------
Proved Undeveloped 130,994 108,503 91,229 77,659
------------------------------------------------------------------------
Probable 89,279 67,957 53,814 44,016
------------------------------------------------------------------------
Total, Proved plus Probable 220,273 176,460 145,042 121,676
------------------------------------------------------------------------
Possible 90,742 63,586 47,389 37,081
------------------------------------------------------------------------
Total 311,015 240,045 192,431 158,757
------------------------------------------------------------------------
------------------------------------------------------------------------


The additions to Oilexco's reserves reported as at December 31, 2004 are significant as Oilexco's interest in the Nicol Field was not included in any previous reserve evaluation. Proved Reserves have increased 52%, Probable Reserves have increased 38%, with total Proved plus Probable Reserves increasing by 46%. The reserve valuations have also increased dramatically due to increased crude oil prices from those at December 31, 2004. Net Present Values of Future net Revenue for total Proved plus Probable reserves, based on Sproule's Forecast Prices as of September 30th, 2005 at 0%, 5%, 10%, and 15% discount rates have increased over those reported as at December 31, 2004 by 53%, 59%, 66%, and 72% respectively. The Sproule Report does not include any other reserves previously evaluated, only Oilexco's interest in the Nicol Field.

Oilexco's reserves for the year ended December 31, 2004 were reported in the Annual Information Form ("AIF") of Oilexco Incorporated for the year ended December 31, 2004, dated March 31, 2005. A copy of the AIF can be found on Oilexco's website www.oilexco.com, and within Oilexco's Canadian regulatory filings located on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

In addition to the updated reserves at Nicol, Oilexco also announces that Sproule International Limited has also been engaged, by the Reserves Committee and management of Oilexco Incorporated, to be the ongoing Independent Reserves Evaluator of Oilexco Incorporated. "Sproule's long history and experience in Canada and worldwide should give confidence to Oilexco's stakeholders going forward" said Arthur Millholland, CEO speaking on behalf of Oilexco's Reserves Committee.

Comparability

Oilexco's Petroleum and Natural Gas reserves are prepared in accordance with National Instrument 51-101; Standards for Disclosure for Oil and Gas Activities, which sets out requirements and standards for disclosure by Canadian reporting issuers engaged in oil and gas activities. Oilexco's Petroleum and Natural Gas reserves may not be comparable to reserves of companies outside of Canadian jurisdiction which are prepared in accordance to standards other than those required under National Instrument 51-101. Details of National Instrument 51-101, along with accompanying Canadian Oil and Gas disclosure standards can be found on the website of the Alberta Securities Commission at www.albertasecurities.com.

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 estimates 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. 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 ("LSE-AIM") and the Toronto Stock Exchange ("TSX"), 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
    Website: www.oilexco.com