OILEXCO INCORPORATED
TSX : OIL
LSE : OIL

OILEXCO INCORPORATED

April 10, 2006 07:00 ET

Oilexco Updates UK North Sea Activities

CALGARY, ALBERTA--(CCNMatthews - April 10, 2006) - Oilexco Incorporated ("Oilexco") (TSX:OIL)(AIM:OIL) is pleased to update its activities in the UK North Sea.

At Joy situated in Block 15/25c located north of Oilexco's 70% owned Nicol oil accumulation, the well 15/25c-14 is being abandoned after being unsuccessful in intersecting commercial hydrocarbons. This well drilled 100% by Oilexco targeted a small Paleocene satellite structure 2 kilometers north of the Nicol oil accumulation. Once abandonment operations are completed, the semi-submersible Bredford Dolphin will move to the Disraeli project located in Block 21/23a.

The Disraeli site is immediately southwest of the 2005 Saxon oil discovery in Block 21/23b, in the Eocene aged Tay sand reservoir. Oilexco is paying 95% of the costs to evaluate the Eocene Tay sand reservoir (at approximately 5000 feet) at Disraeli to earn on a farm in basis a 65% interest in Block 21/23a to the base of the Eocene Tay stratigraphic interval. In addition, seismic and rock physics studies on the Disraeli prospect by Oilexco's technical partner Ikon Science indicate the presence of a larger Jurassic Fulmar prospect below the primary Eocene Tay target. Oilexco will pay 95% of the costs to evaluate this deeper horizon (at approximately 9000 feet) to earn on a farm in basis, an 85% interest in Block 21/23a in all stratigraphic horizons below the Eocene Tay sand.

At Oilexco's 100% owned Brenda Development project, operations are on schedule and under budget. Drilling has been completed on two of the four horizontal production wells. Drilling operations are currently in progress on the third horizontal production well. The results experienced to date have met, or exceeded the Company's expectations. First oil from the Development continues to be targeted for October.

"We are disappointed that the drilling results at Joy are unfavourable, but it must be noted that Oilexco has achieved enviable drilling success in the near-by areas of Nicol and Brenda in Block 15/25. The Joy well was drilled on Block 15/25c, a 20th Round License expiring in July, to assess the hydrocarbon potential of a small structure that would otherwise be uneconomic if not for Oilexco's Nicol oil development project located to the south", said Arthur Millholland, President and CEO of Oilexco. "We have an active appraisal and exploratory drilling program ahead of us in the UK North Sea in 2006, which is part of our $280 million US capital budget in this fiscal year, of which Joy being the first well in the program was a very small budget component at approximately $5 million US. Having the semi-submersible Sedco 712 under long term contract through to the end of March 2008, and the semi-submersible Bredford Dolphin under a three well contract that commenced in March of this year allows us to execute our 2006 drilling program, as well to ensure the development in 2006 of the Brenda and Nicol oil accumulations."

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