Oilexco Begins Third Well in North Sea Drilling Program

Oilexco reports that the third well of it's 2003 - 2004 UK North Sea drilling program commenced drilling operations on February 29th. The well is being drilled by Transocean's semisub, JW McLean. This will be Oilexco's first appraisal well to define the limits, reserves and production potential of the 15/25b-6 "Brenda" oil find announced by Oilexco on January 26, 2004. Oilexco's UK North Sea drilling program is a minimum three (3) well program on Licence P1042 (100% working interest), Block 15/25b in the Outer Moray Firth, targeting oil in the Paleocene Forties Sandstone. The first well of the program, the 15/25b-6 "Brenda" oil find, tested 2,980 bbl/d of 40 degrees oil through a 40/64" choke under stable flowing conditions from the Forties Sandstone.

The second well of the program 15/25b-7 "Sheryl" was located on a seismically defined four way closure separate from the "Brenda" oil accumulation. This well, and a side-track 15/25b-7Z which was directionally drilled down the flank of the structure, were abandoned after failing to intersect commercial quantities of hydrocarbons.

The 15/25b-8 well, the third of the program, is an appraisal well to the 15/25b-6 "Brenda" oil find. The purpose of this well is to define the limits, reserves and production potential of the "Brenda" oil accumulation. The semi-submersible drilling rig, the J.W. McLean is located in a position southwest of the 15/25b-6 well that will allow a pattern of directional holes to be drilled to conduct an initial appraisal of the oil accumulation. If the initial appraisal program is successful, Oilexco has identified additional appraisal locations to further define the limits of the "Brenda" oil accumulation.