OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

February 01, 2006 18:47 ET

Oilexco Begins Brenda Field Development

CALGARY, ALBERTA--(CCNMatthews - Feb. 1, 2006) - Oilexco Incorporated (TSX:OIL) (AIM:OIL) ("Oilexco") has begun development of its 100% owned Brenda Field located in Block 15/25b in the UK Central North Sea. The Transocean semi-submersible Sedco 712, currently under long term contract to Oilexco, has commenced operations on the first of four horizontal production wells. The Brenda Field development is the first phase of Oilexco's Brenda/Nicol project located in Block 15/25. After completing the Brenda production wells, operations will commence on the company's 70% owned Nicol Field late in the second quarter. Production from both Fields is set to begin in September/October 2006, with peak production rates expected to reach 35,000 barrels of oil per day. These production rates would place the company in the top quartile of all producers in the UK North Sea.

"This is a very exciting time for our company", said CEO Arthur Millholland. "We first entered the UK North Sea in 2002, and since that time we have gained a reputation for being one of the most innovative and aggressive exploration companies in the region. Now that development has started at Brenda, we will demonstrate that we are also very good at bringing discoveries into production quickly and cost effectively. Our contractors are on schedule with equipment fabrication. Last week we announced the signing of our US$245 million financing with the Royal Bank of Scotland. Now our drilling rig has begun field operations. Everything is proceeding as planned."

In addition to ongoing operations at Brenda, Oilexco will recommence its exploration/appraisal drilling program in March utilizing the Bredford Dolphin semi-submersible drilling unit under a three well drilling contract. The first well of this three well program will be located on the Company's 100% owned Block 15/25c. This well will target light oil reservoired in Paleocene Balmoral Sands on trend with, and just north of, the Nicol Field in Block 15/25a. If successful, this well will add future incremental production and reserves to the Brenda/Nicol development.

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.

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