Oilexco Issues Balmoral Purchase Clarification

Oilexco at the request of the TSX Venture Exchange and Market Regulation Services, is clarifying details of the previously announced agreement to acquire interests in the Balmoral area, Block 16/21a in the central UK North Sea. Oilexco through its wholly owned subsidiary Oilexco North Sea Limited has agreed to acquire these interests from Pentex Oil UK Ltd. for cash in the amount of Pounds Sterling 2,150,000. Oilexco's current cash position is in excess of Pounds Sterling 20,000,000. The purchase price is subject to adjustments pertaining to revenue, operating and capital expenditures. Closing of the transaction effective January 1, 2004, is expected to occur in mid September.

Oilexco is listed on the Alternative Investment Market of the London Stock Exchange plc ("LSE-AIM") and the TSX Venture Exchange ("TSX-V"), trading under the symbol OIL.