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Oilexco flow tests 4,194 bbl/d at North Sea 15/25a-13Y


Oilexco Inc (TSX-V:OIL)
Shares Issued 118,762,602
Last Close 5/13/2005 $2.47
Monday May 16 2005 - News Release

Mr. Arthur Millholland reports

OILEXCO TESTS 4,194 BBL/D FROM THE FIRST WELL OF ITS 2005 UK NORTH SEA DRILLING PROGRAM

Oilexco Inc. has flow tested 4,194 barrels per day of 39-degree oil during production testing operations from the well 15/25a-13Y, the third wellbore of the 15/25a-13 well cluster, which is the first well of the company's 2005 United Kingdom North Sea drilling program. The oil flow was through a 44/64th-inch choke at 501 pounds per square inch of flowing wellhead pressure from 44 feet of perforations. The flow rate was restricted by the testing equipment available. The 15/25a-13 well cluster was drilled as an earning well on a farmin by Oilexco on licence P.233, block 15/25a. Under the terms of the farm-in agreement, Oilexco is paying 100 per cent of the costs of the 15/25a-13 well cluster to earn a 70-per-cent interest in block15/25a.

The 15/25a-13 well cluster has appraised a Paleocene sand oil accumulation defined by the well 15/25a-2, which was drilled in 1988. The 15/25a-2 well intersected 15 feet of net oil pay on the flank of a four-way structural closure. This Paleocene sand reservoir is on the same depositional trend as Oilexco's Brenda Paleocene reservoired oil accumulation located 10 kilometres to the southeast in block 15/25b. Drilling operations at the first well of the cluster 15/25a-13 commenced on March 31 using the Transocean mid-water semi-submersible Sedco 712. The 15/25a-13 wellbore located 1.5 kilometres west of the 15/25a-13Y location defined the up-dip termination of the structural closure. The second wellbore 15/25a-13Z located 1.75 kilometres east of the 15/25a-13Y location confirmed the oil-water contact at the eastern margin of the structural closure. The 15/25a-13Y well, the third wellbore of the cluster, is located approximately 20 feet below the crestal area of the four-way closure. The well intersected 57 feet of net oil pay over 67 feet of gross oil column.

Operations at 15/25b-13Y should be completed by the end of the week. At this time, the Sedco 712 will move to a location in block 15/24b, located northwest of block 15/25a, to drill a well operated by Oilexco on a farm-in basis. This well will evaluate a Paleocene sand reservoir separate to the MacCulloch field located to the northwest. Oil indicator seismic attributes at this location are similar to those at MacCulloch and Oilexco's Brenda and 15/25a-13Y Paleocene reservoired oil accumulations, all of which are on the same depositional trend.

© 2005 Canjex Publishing Ltd.