Oilexco Awards Contracts for Brenda Field Development

Oilexco's operations in the UK North Sea, through its wholly owned subsidiary Oilexco North Sea Limited, are currently focused on the development of the Brenda and Nicol Palaeocene oil accumulations located in Blocks 15/25b and 15/25a respectively, and on drilling new exploration and /or appraisal opportunities utilizing the Transocean semisubmersible, Sedco 712, which is contracted to the Company to the end of March 2007.

Oilexco North Sea Ltd has entered into letters of intent with a view to awarding contracts to several leading sub-sea contractors for the Brenda field development. The Brenda field located in the Central North Sea is due to produce first oil in the third quarter of 2006. Oilexco recently announced that it had signed Heads of Agreement with Balmoral Operator - CNR, to deliver Brenda production to the Balmoral platform. The selection of preferred contractors follows several months of careful evaluation, and finalises Oilexco's main contractor line up for the sub sea tieback project which has an estimated value of Pounds Sterling 80 million.

Technip Offshore (UK) Limited has been selected as the preferred partner for the sub sea installation and pipe lay which will connect Brenda to the Balmoral Platform. Meanwhile Dunfermline Scotland based FMC technologies Ltd has been selected to provide four or more sub-sea Xmas trees for the sub sea development. Preliminary work is underway with delivery of the sub-sea trees due towards the end of January 2006. In addition Oilexco has awarded a letter of intent to the Norwegian company FRAMO Engineering AS for the supply of a multiphase subsea pump, metering and manifold skid. Finally, letters of intent have been issued to Baker Oil Tools for the supply of down-hole tools and services, and to Valourec Mannesmann Oil and Gas UK Ltd for the provision of tubulars. Commenting on the selection of the various contractors Oilexco CEO Arthur Millholland says "We are delighted to announce a strong line up of preferred contractors for this strategically significant field development.

All of those chosen have excellent reputations in their area of expertise. We are looking forward in the next period to working in partnership with our contractors and their subcontractors to deliver production with our stated timescale."