Oilexco completes appraisal drilling at Shelley
Oilexco Inc (C:OIL)
Shares Issued 197,796,491
Last Close 1/2/2007 $7.68
Tuesday January 02 2007 - News Release
Mr. Arthur Millholland reports
OILEXCO COMPLETES INITIAL SHELLEY APPRAISAL
Oilexco Inc. has completed initial appraisal drilling on its 100-per-cent-owned Shelley oil accumulation located in block 22/2b in the United Kingdom Central North Sea. This phase of appraisal drilling, which commenced in mid-October, consisted of eight well penetrations from a single subsea wellbore. The last wellbore, an extended reach borehole approximately 13,850 feet in length, was drill stem tested.
Oilexco's initial well cluster at Shelley 22/2b-13 was designed to appraise a 1984 Paleocene Forties sand oil discovery by the well 22/2-2, which drill stem tested 31 degrees API oil at a rate of 2,416 barrels per day. The company's 22/2b-13 well cluster was successful in defining a broad low-relief oil-bearing structure. The structure, as currently defined by the 22/2b-13 well cluster, is approximately seven square kilometres in size. Two additional appraisal wells are planned to be drilled in the second quarter to evaluate apparent north and south extensions of the structure. These areas could not be practically reached from the 22/2b-13 wells' surface location.
The last wellbore of the cluster 22/2b-13t, an extended reach well drilled near the margin of the structure, was tested through 42 feet of perforations representing 18 true vertical feet of perforated reservoir from the top of 34 vertical feet of oil pay. Oil flow during the test was recorded at a maximum rate of 3,082 barrels per day, through a 36/64-inch choke, at 282-pound-per-square-inch flowing pressure. The quality of the oil was 31 degrees API, which is consistent with the test from the 22/2-2 well. No water or sand was produced throughout the test.
"The results of this well exceeded our expectations," said Arthur Millholland, president and chief executive officer. "Our plan for Shelley is to file a field development plan in the first quarter, and to complete additional appraisal drilling in the second quarter utilizing one of our two long-term contracted semi-submersibles," added Mr. Millholland. "We preordered subsea equipment in 2006 to allow us to complete two subsea developments this year. First oil from Shelley is currently targeted for the fourth quarter if we can fully execute our plan."
The semi-submersible Transocean Sedco 712, which is under long-term contract to the company, will move to the Kildare prospect located on block 15/26b to begin appraisal drilling early next week. The company has a 50-per-cent ownership interest in the block, which was awarded to Oilexco and an industry partner in 2005's 23rd U.K. offshore licensing round. Oilexco's appraisal effort will consist of a single wellbore targeting oil in thick Middle Jurassic Ettrick and Tweedsmuir sands located south of the 1988 well 15/26b-5, which flowed 35 degrees API oil at rate of 2,675 barrels per day from thin-faulted Ettrick sands at the north fault-bounded margin of the Kildare fault block.
In accordance with the guidelines of the Alternative Investment Market of the London Stock Exchange, Arthur Millholland, PGeol, president and chief exeuctive officer of Oilexco, is the qualified person that has reviewed the technical information contained in this press release.
© 2007 Canjex Publishing Ltd.
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