OILEXCO INCORPORATED
AIM : OIL
TSX : OIL

OILEXCO INCORPORATED

March 19, 2007 07:00 ET

Oilexco Makes Oil Discovery at Kildare

CALGARY, ALBERTA--(CCNMatthews - March 19, 2007) - Oilexco Incorporated ("Oilexco") (TSX:OIL) (AIM:OIL) announces that it has made an oil discovery in its 50% owned Kildare Prospect in Block 15/26b in the UK Central North Sea. Nexen Petroleum UK Ltd owns the remaining 50% interest in the block, which was awarded jointly to the two companies in the 23rd UK Offshore Licensing Round.

The 15/26b-9 well was drilled to a total depth of 14,330 feet. A significant reservoir section was encountered in the Upper Jurassic sand at a depth of 13,705 feet. A total of 91 feet of net pay from a gross section of 132 feet from the Upper Jurassic sand was penetrated by this well. Both well logs and wireline pressure measurements indicated that the entire Upper Jurassic reservoir sand was oil-bearing. No oil-water contact was intersected by the well. Oil samples were also successfully extracted from the wireline downhole sampler.

An Upper Jurassic sand interval of 125 feet was perforated and drill-stem tested. The test flowed oil at a rate of 4,216 Bbls/d and associated gas at a rate of 3.1 MMcf/d through a 64/64 inch choke with a flowing tubing pressure of 460 psia. There was no water or sand produced during the test. Oilexco and its partner are currently discussing when to return to Kildare in order to drill additional appraisal wells to determine the size of the oil accumulation.

The discovery in the Upper Jurassic sand is in addition to the oil-bearing Ettrick sand that was encountered with the 15/26b-9 well. Oil samples were recovered and reservoir pressures were successfully recorded that tied this sand with the Ettrick sand in the original 15/26b-5 find made in the block in 1988 by another operator. The original 15/26b-5 well flowed oil at a rate of 2,650 Bbls/day and associated gas at a rate of 3.5 MMcf/d from the Ettrick sand and is located approximately two kilometres north of the 15/26b-9 well drilled by Oilexco and its partner.

"We are very pleased with the results from the Kildare test", said Oilexco President and CEO Arthur Millholland. "The find also confirms our decision to secure the Ocean Guardian semi-submersible for a two year contract. Given the number of exploration and appraisal properties that Oilexco has, having two drilling vessels working full time will allow us to quickly convert discoveries into developments and eventually into production", he said.

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.

In accordance with the guidelines of the AIM market of the London Stock Exchange, Arthur Millholland P.Geol, President and CEO of Oilexco Incorporated, is the qualified person that has reviewed the technical information contained in this press release.

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