Oilexco Incorporated updates its operations activities in the UK North Sea and announce its capital budget for 2008.

Highlights • $707 million capital budget, for exploration, appraisal and development, and production activities, approved for 2008 • Successful completion of first stage of appraisal drilling on Huntington discovery, Block 22/14b o Drill-stem testing of two intervals within Paleocene Forties oil pay yielded maximum flow rates of 2,100 Bbl/d and 5,208 Bbl/d o Appraisal well targeting Jurassic Fulmar sands will commence shortly • Appraisal of Shelley oil accumulation, Block 22/2b and 22/3a, completed and first oil on track for Q3/Q4 2008 • Currently participating in two exploration wells; Morro/Coronado in Block 23/13b, southwest of Huntingdon oil discovery and second exploration well at Mallory in Block 22/14a • Strong reservoir performance continues at Brenda and Nicol; production currently restricted, but levels set to increase following commissioning of multiphase pump • Closing of Balmoral acquisition on schedule to occur by end of Q4

Arthur Millholland, President and Chief Executive Officer, commented, “After a very successful 2007, in which Oilexco achieved a number of milestones, we are set for an exciting year in 2008 with further developments due to come onstream and the prospect of significantly increasing the Company’s reserves through our extensive exploration and appraisal programmes.”

2008 Capital Budget For 2008, the Company’s Board of Directors has approved a capital budget of $707 million. These funds will primarily be spent on drilling additional production wells in the Balmoral core area, the development of the Shelley oil accumulation, and on appraisal and predevelopment expenditures at Huntington.

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