CALGARY, ALBERTA--(CCNMatthews - Jan. 2, 2007) - Oilexco Incorporated
(TSX:OIL) (AIM:OIL) ("Oilexco") has completed initial appraisal drilling
on its 100% owned Shelley oil accumulation located in Block 22/2b in the
UK Central North Sea. This phase of appraisal drilling which commenced in
mid October consisted of 8 well penetrations from a single sub-sea well
bore. The last well bore, an extended reach bore hole 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 31o API oil at rate of 2,416 Bbl/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 7 square kilometers in size. Two
additional appraisal wells are planned to be drilled in the 2nd 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 well bore 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"
choke, at 282 psi flowing pressure. The quality of the oil was 31o 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 CEO. "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
sub-sea equipment in 2006 to allow us to complete two sub-sea
developments this year. First oil from Shelley is currently targeted for
the 4th 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% ownership interest in the Block, which was awarded to Oilexco and
an industry partner in 2005's 23rd UK Offshore Licensing Round. Oilexco's
appraisal effort will consist of a single well bore targeting oil in
thick Middle Jurassic Ettrick and Tweedsmuir sands located south of the
1988 well 15/26b-5, which flowed 35o API oil at rate of 2,675 bbl/day
from thin faulted Ettrick sands at the north fault bounded margin of the
Kildare fault block.
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