OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

November 08, 2005 10:28 ET

Oilexco Extends Transocean Contract

CALGARY, ALBERTA--(CCNMatthews - Nov. 8, 2005) - Oilexco Incorporated ("Oilexco") (TSX:OIL) (AIM:OIL) announces that its wholly owned subsidiary Oilexco North Sea Limited has extended its contract with a subsidiary of Transocean Inc. (NYSE: RIG) for the semi-submersible Sedco 712 for one year; from March 28, 2007 to March 27, 2008. The rig rate for this extension period has increased to $225,000 US per day, from $140,000 US per day for the period March 28, 2006 to March 27, 2007. Total value of the contract extension is $82,125,000 US ($97,800,000 CDN).

The extension of the contract for the Sedco 712 continues a relationship between Oilexco and Transocean that commenced in December 2003 when the Transocean semi-submersible J.W. McLean went on contract to Oilexco. In 2004 the Transocean semi-submersibles J.W. McLean and John Shaw were under contract for 286 days. During this period, Oilexco was the most active operator of exploration-appraisal wells in the UK North Sea, an extraordinary distinction which has continued in 2005. Oilexco's current contract with Transocean for the Sedco 712 was initiated under a Letter of Arrangement executed in October of last year, before the tightening of the offshore rig market. The 712 came on contract to Oilexco on March 28th, after a 6 month refurbishment program, for a period extending to March 27th, 2007.

"Extending the contract will allow Oilexco to continue its aggressive program of exploration, appraisal and development drilling in the UK North Sea" said Arthur Millholland, CEO of Oilexco. "Having this rig will allow Oilexco to continue to create significant shareholder value going forward, in addition to controlling our own destiny. Oilexco is also looking forward to continuing the Team 712 relationship with the personnel aboard the rig" added Mr. Millholland. "The Team 712 philosophy focuses on an Oilexco-Transocean team approach for safe and efficient rig operations".

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