June 09, 2005 18:10 ET

Oilexco Announces Results from the Second Well of its 2005 UK North Sea Drilling Program

CALGARY, ALBERTA--(CCNMatthews - June 9, 2005) - Oilexco Incorporated (TSX VENTURE:OIL) (LSE:OIL) ("Oilexco") announces that it has completed the drilling of two well bores to evaluate a Paleocene sand reservoir adjacent to, but believed by Oilexco to be separate from, the MacCulloch Field in Block 15/24b. Under the terms of a farm in agreement, Oilexco is paying 100% of the costs of drilling these wells to earn a 50% interest in a sub-area of Block 15/24b, excluding the MacCulloch Field.

The 15/24b-8 well bore was the first of two "slim hole" penetrations drilled from a central location by the Transocean Sedco 712 semi-submersible rig, to evaluate an oil-related seismic ano maly adjacent to the MacCulloch Field. Time lapse (4D) seismic data had indicated that oil had not been swept from this anomaly by production from the offsetting MacCulloch E1 horizontal well that has produced approximately 10 million barrels of oil to date.

The 15/24b-8 well bore encountered 43 feet of net pay in the main Paleocene sand reservoir. The oil/water contact was at the same elevation as the initial oil/water contact from the adjacent MacCulloch Field. Due to the 8 1/2 inch diameter of the well bore in the 15/24b-8 "slim hole" penetration, drill-stem testing was not possible. Wireline testing tools encountered formation pressures that indicate the separation of the Paleocene sands in this anomaly from those within the MacCulloch Field. These wireline testing tools successfully recovered samples of dark brown, light crude oil from the main reservoir sand.

The pressure data and the oil/water contact encountered by the 15/24b-8 well indicate that the Paleocene-aged, oil-bearing sands drilled in this anomaly have not been drained by offsetting production wells.

Upon study of the data accumulated from these two well bores, Oilexco may propose to drill a horizontal production well into this anomaly which could be drilled from the subsea manifold of the MacCulloch Field and could be tied- in to existing production facilities.

This well is the second successful prospect encountered in Oilexco's 2005 Exploration Program utilizing the Sedco 712 semi-submersible rig, for equity earning wells.

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 well. 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 TSX Venture Exchange ("TSX-V"), trading under the symbol OIL.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Oilexco Incorporated
    Arthur S. Millholland
    (403) 262-5441
    Oilexco Incorporated
    Brian L. Ward
    Chief Financial Officer
    (403) 262-5441
    Oilexco Incorporated
    Gerry L. Roe
    Chief Operating Officer
    (403) 262-5441
    Website: www.oilexco.com