Oilexco Extends Transocean Contract

Oilexco has extended its contract with Transocean for the Sedco 712 semisub for one year; from March 28, 2007 to March 27, 2008. The rig rate for this extension period has increased to US $225,000 per day, from US $140,000 per day for the period March 28, 2006 to March 27, 2007. Total value of the contract extension is US $82,125,000($97,800,000 CDN).

The extension of the contract for the Sedco 712 continues a relationship between Oilexco and Transocean that commenced in December 2003 when the Transocean semisub J.W. McLean went on contract to Oilexco. In 2004 the Transocean semisubs J.W. McLean and John Shaw were under contract for 286 days. During this period, Oilexco was the most active operator of exploration-appraisal wells in the UK North Sea, an extraordinary distinction which has continued in 2005. Oilexco's current contract with Transocean for the Sedco 712 was initiated under a Letter of Arrangement executed in October of last year, before the tightening of the offshore rig market. The 712 came on contract to Oilexco on March 28th, after a 6 month refurbishment program, for a period extending to March 27th, 2007.

"Extending the contract will allow Oilexco to continue its aggressive program of exploration, appraisal and development drilling in the UK North Sea" said Arthur Millholland, CEO of Oilexco. "Having this rig will allow Oilexco to continue to create significant shareholder value going forward, in addition to controlling our own destiny. Oilexco is also looking forward to continuing the Team 712 relationship with the personnel aboard the rig" added Mr. Millholland. "The Team 712 philosophy focuses on an Oilexco-Transocean team approach for safe and efficient rig operations".

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