Oilexco Incorporated announces that its wholly owned subsidiary, Oilexco North Sea Limited, together with the other P.815 (Block 15/23d) joint venturers have successfully drilled an appraisal well on the Bugle discovery, in which the Company has earned a 41% interest through the drilling of this well. On behalf of the licence operator, Oilexco re-entered the original 15/23d-13 well and drilled an appraisal sidetrack well downdip to ascertain if the Bugle Jurassic oil accumulations were of a commercial size. The other joint venturers are Nexen Petroleum U.K. Limited (licence operator, 41%) and Eni UK (18%).
Bugle Appraisal Update
• At least 282 feet of oil column identified in Dirk Sand oil accumulation
• At least 280 feet of oil column identified in Upper Galley Sand oil accumulation
• Commerciality of Bugle discovery confirmed
The original 15/23d-13 discovery well, drilled in 1997, encountered 85 feet of oil-bearing Jurassic Dirk Sandstone and 123 feet of oil-bearing Jurassic Galley Sandstone. Both of the intervals were tested together at a rate of 7,400 barrels of oil per day (“bopd”) (44° API oil) and 9.06 million cubic feet per day (“MMcfd”) of gas.
Oilexco re-entered the 15/23d-13 well on December 24, 2007. The 15/23d-13z sidetrack well was successfully kicked off from the original well bore on January 6, 2008 and drilled to a total depth of 15,898 feet on January 28, 2008.
The main objective of this appraisal well was to establish an oil/water contact in the Dirk and Upper Galley sands by drilling a location on the flank of the Bugle structure. Oil bearing Dirk Sandstone and oil bearing Upper Galley Sandstone were encountered, establishing at least 282 and 280 feet of oil column respectively, and significantly increasing the size of the Bugle oil accumulation.
Oil samples were recovered and reservoir pressures were successfully recorded from both the Dirk and the Upper Galley Sandstone.
The Ocean Guardian semi-submersible drilling rig, which is under long term contract to Oilexco, will now move to Block 23/21 to drill the Moth exploration prospect, located directly south of the Lomond gas field. During the course of 2008 Oilexco and its co-
venturers will drill a production well with appraisal sidetracks on the Bugle discovery in Block 15/23d, to identify the oil/water contact point and determine the areal extent of the reservoir.
The joint venturers will proceed to review development options for Bugle targeted toward first oil in 2010.
Arthur Millholland, President and Chief Executive Officer, commented “We are very pleased with the results from the Bugle appraisal well, which illustrate why we targeted a farm in to the acreage. Alongside Huntington, the Bugle/Black Horse fields offer medium term production and reserves upside. With near term production growth from Shelley and a number of longer term exploration prospects, Oilexco continues to prove its ability to achieve sustainable shareholder growth.”
