Oilexco Makes a Substantial Discovery with its Brenda Well

Oilexco has made a substantial oil find at the initial well of its UK North Sea drilling program. The 15/25b-6 well ("Brenda") tested 40 degrees API oil at an average rate of 2,980 bbl/d, over an 18-hour test under stable flowing conditions. The oil flow was through a 40/64" choke at 458 psi flowing wellhead pressure, from 56 feet of perforations. Associated natural gas flowed at an average rate of 600 Mcf/d throughout the test. No water or sand was produced during the test period. Currently the well is being suspended for future re-entry as a production well. Upon completion of the suspension operations later this week, the Transocean Offshore semi-submersible J.W. McLean will move approximately 4 kilometers northwest to commence drilling operations on the "Sheryl" prospect, the second well of Oilexco's UK North Sea drilling program.

Oilexco also announces that it has exercised its option with Transocean Offshore for a third well to be drilled by the J.W. McLean. This well will be the next appraisal well to the "Brenda" oil accumulation. The well location will be 1.1 kilometers southwest of the 15/25b-6 well.

Arthur Millholland, President, comments that "this is a strong test result". The "Brenda" well has higher flow rates than the original abandoned 15/25b-3 discovery. Additionally, while being flow tested through a smaller choke, the Oilexco 15/25b-6 well flowed with double the flowing pressure of the original 15/25b-3 well. Mr. Millholland also comments that "wells similar to 15/25b-6 have had initial production rates in excess of 10,000 bbl/d when produced with the assistance of artificial lift". Ultimate potential production rates for "Brenda" will be best forecasted after full appraisal has been completed.

Oilexco owns a 100% interest in this field.