Dixon Oil & Gas Prepares to Drill on Joarcam Prospect

Dixon Oil and Gas has advanced $125,000 to initiate the first of a series of drilling targets. This work is being done on a target to target basis pursuant to the farm-in agreement on the Joarcam Prospect with 1048316 Alberta Ltd., a private company

A Viking well in this area will produce at a rate of approximately 40 barrels per day, and recoverable reserves per well per 40 acre spacing are estimated at 100,000 barrels. The first location to be drilled on the property will be an offset from a Viking well that has yielded 156,000 barrels. These wells typically demonstrate very shallow decline curves and are economic for at least 15 years with primary recovery only. There is year round access to the property and the cost of drilling a well at Joarcam is estimated at $125,000. Joarcam can be characterized as a low risk property at a shallow depth with a short payback period and long life reserves.

Dixon has executed a formal farm-in agreement with 1048316 Alberta Ltd. to acquire a 49% working interest. Dixon plans to immediately commence all necessary permitting and well site preparation to allow the spudding of the first of a contemplated 10 wells by October 7, 2003.