Oilexco Says Palomino Prospect Comes Up Dry

Oilexco says that drilling results for its Palomino prospect located in Block 21/6a, UK Central North Sea, indicate that there are no commercial quantities of hydrocarbons from the well 21/6-7. Oilexco paid 84.21% of the 21/6-7 well, for a 50% interest in the Palomino project. The well is currently being plugged and abandoned.

"While we are disappointed that the drilling results are unfavorable, it must be noted that this exploratory prospect was one of the higher risk opportunities in our portfolio. We are pleased that our drilling techniques resulted in this well being drilled in a relatively short timeframe at a cost well under budget", said Arthur Millholland, President and CEO of Oilexco. "We have a large inventory of appraisal and exploratory drilling opportunities ahead of us in the UK North Sea that we are pursuing with the semisubmersible Sedco 712 under long term contract, and the semisubmersible Bredford Dolphin under a three well contract commencing later in the first quarter. Oilexco's Brenda-Nicol project has shown that positive findings from drilling can be quickly translated into development plans."

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