Offshore staff

CALGARY, Canada --Oilexco North Sea Ltd. has contracted Diamond Offshore's Ocean Guardian semisubmersible for a year starting in April 2007. There is an option for a second year. Total value including the option year is $225.5 million.

"This new long term drilling contract will allow Oilexco to continue its aggressive program of exploration, appraisal and development drilling in the UK North Sea well into the future" said Arthur Millholland, CEO of Oilexco. "We presently have exploration, appraisal, and development drilling scheduled through 2007 and into 2008.

"Having this additional rig will allow Oilexco to continue to create significant shareholder value going forward by allowing the company to continue to maintain a flexible drilling schedule which now can include full HP/HT operations, as well as the ability to accelerate future development drilling programs.

"With theOcean Guardian and the Sedco 712 under long term contract, Oilexco will be able to complete the drilling portion of the company's $410 million US 2007 capital budget, which contemplates an extensive exploration and appraisal drilling program in addition to two new field development projects."

12/28/2006