OILEXCO INCORPORATED
TSX : OIL
LSE : OIL

OILEXCO INCORPORATED

November 12, 2008 17:49 ET

Oilexco Announces Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 12, 2008) - Oilexco Incorporated ("Oilexco" or "the Company") (TSX:OIL) (LSE:OIL) is pleased to announce the Company's third quarter results for the three and nine months ended 30 September 2008.

Arthur Millholland, President and Chief Executive Officer, commented:

"Oilexco successfully completed a number of key steps in the third quarter that will allow the Company to increase production in the near term. By late Q4 2008 or early Q1 2009, new wells from the Shelley, Nicol and Caledonia fields are expected to begin production. The Balmoral Floating Production Vessel underwent a particularly intensive period of annual maintenance in preparation for handling increased production in 2009 and 2010."

THIRD QUARTER / FIRST NINE MONTH HIGHLIGHTS

Financial Performance

- Revenues of $95.3 million in the third quarter and $496.1 million for the first 9 months.

- Cash flow from operations of $114.2 million for the third quarter and $394.8 million for the first 9 months.

- Net income of $59.1 million in the third quarter and $81.7 million for the first 9 months.

- EBITDA of $52.0 million in the third quarter and $370.3 million for the first 9 months.

- Announcement today of the extension of Pounds Sterling 70 million of the Company's Pre-development Facility until 30 November 2009.

Production

- Production in Q3 2008 averaged 11,951 Bbls / day, and average daily sales were 8,623 Bbls / day, reflecting a production underlift. Lower production was a result of the planned annual maintenance turnaround on the Balmoral FPV that shut in production for approximately half of the quarter.

- Received average price of $120.16 per barrel of oil in Q3 2008 resulting in operating netback of $95.49 per barrel.

Operational / Drilling

- Successful exploration drilling at Moth resulted in a significant discovery, with flow test calculations suggesting the well could be capable of producing 44 Mmcf / day and 4,400 Bbls / day of condensate. Partners engaged in planning discussions for future appraisal wells in 2009.

- Development activities progressed on the 100% owned Shelley project. First oil is on target for December 2008 or early 2009 depending on weather conditions.

- Construction and initial commissioning activities completed on the Sevan Voyageur FPSO, which is scheduled to be deployed to the Shelley field in Q4.

- Successful appraisal drilling at the Caledonia field led to a fast track development plan for a new well targeting first oil in spring 2009.

- Subsequent to the end of the quarter, appraisal drilling encountered additional oil in Block 22/14a which is located immediately east of Huntington.

Outlook

- Focus for Q4 2008 is bringing new wells into production.

- Final tie in and hook up activities to be completed on Shelley field once Sevan Voyageur FPSO is deployed.

- The second production well at Nicol will be completed and tied in by end of December or early 2009 depending on weather conditions.

- Contractors are replacing equipment and re-working several previously shut in wells on the Balmoral field which is set to resume full production in Q4 2008.

The results and associated Management Discussion and Analysis and Financial Statements are at www.oilexco.com and www.sedar.com.

About the Company

Oilexco is an oil and gas exploration and production company active in the United Kingdom. Oilexco's producing properties, exploration and development activities are located in the UK Central North Sea, specifically in the Outer Moray Firth and Central Graben areas. Oilexco operates in the United Kingdom through its wholly owned subsidiary, Oilexco North Sea, a company registered under the laws of England and Wales. Oilexco shares are listed for trading on the London Stock Exchange (LSE) and the Toronto Stock Exchange (TSX) under the symbol "OIL".

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.

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
    Rob Elgie
    Manager Investor Relations
    (403) 262-5441
    Website: www.oilexco.com
    or
    Pelham PR
    James Henderson
    Managing Director
    44 (20) 7743 6673
    or
    Pelham PR
    Alisdair Haythornthwaite
    Director
    44 (20) 7743 6676