Oilexco Awards UK North Sea Drilling Contract to Transocean

Oilexco has awarded Transocean a contract for one (1) firm well and three (3) option wells to be drilled in the second phase of Oilexco's Block 15/25b appraisal drilling program located in the Outer Moray Firth of the UK North Sea.

Transocean has advised Oilexco that the mid water semi-submersible the J.W. McLean will become available to the Company on or about the 20th of June. At this time the J.W. McLean will be mobilized to a location approximately 1 kilometer northwest of the bottom hole location of Oilexco's 15/25b-9 appraisal well. This new location will be the fifth well and eighth well bore inclusive of sidetracks drilled by Oilexco on Block 15/25b in 2004. The objective of this location is to appraise a Paleocene Forties sand oil accumulation on the west side of Block 15/25b intersected by the 15/25b-9 well bore which exhibited an oil/water contact at an elevation different the other well bores drilled by Oilexco on the eastern side of Block 15/25b.

Oilexco Incorporated operates in the UK North Sea through its wholly owned subsidiary Oilexco North Sea Limited. Oilexco's current focus in the UK North Sea is on Block 15/25b, a 20th Round award where it holds a 100% working interest. Block 15/25b is located in the Outer Moray Firth of the UK Central North Sea, 120 kilometers northeast of Aberdeen. Oilexco's Block 15/25b appraisal program is designed to define the limits and edges of a Paleocene Forties sand oil accumulation intersected by the well 15/25b-3 in 1990 and confirmed by the Oilexco 15/25b-6 appraisal well in January 2004. To date Oilexco has drilled four (4) wells and seven (7) well bores inclusive of sidetracks. Five (5) of the well bores encountered oil, three (3) of these well bores; 15/25b-6, 15/25b-8 and 15/25b-9Y were drill stem tested through perforations, flowing 40 degrees API oil at rates of 2980 bbl/d, 4785 bbl/d and 2648 bbl/d respectively, on restrictive chokes at reservoir sand face pressure draw downs of less than 10%.