Oilexco to Become Operator of Nicol Oil Development

Oilexco has signed a Sale and Purchase Agreement with ConocoPhillips and ENI, that upon satisfaction of its terms will increase Oilexco's ownership of the Nicol Field in Block 15/25a in the UK North Sea to 100% from its current 70% interest. Under the terms of the Sale and Purchase Agreement, ConocoPhillips and ENI will lift a joint total of 1.25 million barrels of oil from their current combined 30% equity interest in the Nicol Field. After this production milestone is reached, ConocoPhillips and ENI will relinquish their equity in the property, thereby giving Oilexco 100% ownership of the Nicol Field and Block 15/25a. In addition, Oilexco has agreed under the terms of the Sale and Purchase Agreement to pay ConocoPhillips and ENI's combined 30% portion of the capital expenses for the development of the Nicol Field, currently estimated to be approximately Pounds Sterling 9,000,000.

'We are very excited to sign this agreement as it will eventually give us full ownership of the Nicol Field, which we believe holds significant production and reserve upside,' said Arthur Millholland, Oilexco CEO and President.

The Nicol Field will be developed concurrently with Oilexco's 100% owned Brenda development located 10 km to the southeast. Development operations on the Nicol Field are expected to commence in June with the drilling of a single horizontal production well. Field development operations at Brenda are on schedule and under budget. First oil from the combined Brenda-Nicol developments continues to be targeted for October. Peak production rates net to Oilexco form the combined Brenda-Nicol developments are expected to be 35,000 barrels of oil per day.


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