Oilexco Awards Drilling Contract to Transocean's Sedco 712

Oilexco has awarded Transocean a one year firm contract for the provision of the semisub Sedco 712 commencing on or about March 1, 2005. The Sedco 712 will be utilized on Oilexco's 2005/2006 development and appraisal work program centered on Oilexco's "Brenda" oil accumulation in Block's 15/25b and 15/25e located in the Outer Moray Firth area of the central UK North Sea.

The Sedco 712 is ideally suited for Oilexco's development and appraisal program; consisting of infill drilling, completions and installation of subsea trees. The drilling unit, currently stacked in Invergordon Scotland, had been working on development projects for a major multinational integrated oil company for several years until November of last year. Transocean has indicated the Sedco 712 will require 4.5 months of pre-mobilization maintenance and refitting which will commence in November.

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, and Block 15/25e an August 2004 Out of Round award where it holds a 100% working interest. Block's 15/25b and 15/25e are located in the Outer Moray Firth of the UK Central North Sea, 120 kilometers northeast of Aberdeen.

Oilexco's Block 15/25 appraisal program is designed to define the limits and edges of the "Brenda" 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 five (5) wells and eight (8) well bores inclusive of sidetracks. Six (6) of the well bores encountered oil, four (4) of these well bores; 15/25b-6, 15/25b-8, 15/25b-9Y, and 15/25b-10 were drill stem tested through perforations, flowing 40 degrees API oil at rates of 2,980 bbl/d, 4,785 bbl/d, 2,648 bbl/d, and 3,351 bbl/d respectively, on restrictive chokes at reservoir sand face pressure draw downs of less than 10%.

Currently drilling operations are being conducted on the "Brenda" appraisal well 15/25e-11, the first well of a three well cluster (15/25e-11, 15/25e-11Z, and 15/25e-11Y) utilizing the Transocean semisub John Shaw. After completion of operations on this well cluster, drilling operations will immediately continue on two additional back to back well clusters. Final completion of this phase of the "Brenda" appraisal program is expected to occur in early December.