Oilexco Commences 2005 UK North Sea Drilling Program

Oilexco has commenced its 2005 UK North Sea drilling program. Drilling operations utilizing the Transocean's semisub Sedco 712 started today on the first well of the 2005 program 15/25a-13. The 15/25a-13 well-bore is the first of three penetrations or a "well cluster" to be drilled from a central location. It will be immediately followed by 15/25a-13Z, and 15/25a-13Y. The 15/25a-13 well is being drilled by as an earning well on a farmin by Oilexco on License P.233, Block 15/25a. Under the terms of the agreement Oilexco is paying 100% of the costs of the 15/25a-13 well cluster, to earn a 70% interest in Block15/25a.

The 15/25a-13 well cluster is appraising a Paleocene Forties sand oil accumulation intersected by the well 15/25a-2, which was drilled in 1983. The 15/25a-2 well intersected 15 feet of net oil pay on the flank of a four way structural closure. This Paleocene sand reservoir is on the same depositional trend as Oilexco's Brenda Paleocene reservoired oil accumulation located 10 kilometers to the southeast in Block 15/25b.

Testing operations will only be conducted on the third or last well penetration, 15/25a-13Y which will be located in the crestal area of the four way closure. The first two well penetrations 15/25a-13 and 15/25a-13Z will be drilled as "slim holes targeting potential stratigraphic oil accumulations outlined by seismic attribute anomalies similar to those exhibited in the productive areas at Brenda. Operations on the 15/25a-13 well cluster are expected to span 45 days.

Oilexco has agreed to terms on three additional farmins/joint ventures on lands within its focus area in the UK Central North Sea. Formal agreements for these ventures are being finalized. Two of these opportunities are appraisal wells to known oil accumulations; the third opportunity is exploratory in nature. Oilexco is pursuing additional farmin opportunities to fully utilize the Sedco 712 until it is required for drilling of the Brenda horizontal production wells in November.

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