Drilling Report

    FOR:  OILEXCO INCORPORATED
      LSE-AIM SYMBOL - OIL

TSX VENTURE SYMBOL:  OIL

January 12, 2004

Oilexco Commences Testing on First Well of 2003-2004 UK North Sea Drilling Program

LONDON, UNITED KINGDOM--Oilexco Incorporated ("Oilexco") (TSX-V: OIL; LSE-AIM: OIL) announces that it will
proceed with production testing of the well 15/25b-6 ("Brenda"), the initial well of its UK North Sea drilling
program. The 15/25b-6 well intersected a series of oil-bearing Paleocene Forties sands, the thickest of which
has 26 feet of high quality oil pay. In addition to this sand, several other thin bedded oil bearing sands were
also intersected. These intervals will be perforated and flow tested for a sufficient period to evaluate the
production characteristics of the reservoir. Completion and testing operations on the 15/25b-6 well are planned
to be completed over the next ten days.

Oilexco's UK North Sea drilling program is a two (2) well program on Licence P1042 (100% working interest), on
Block 15/25b in the Outer Moray Firth, targeting oil in the Paleocene Forties Sandstone. The surface location
of 15/25b-6 is approximately 150 meters west of the 15/25b-3 undeveloped discovery, which tested 2,690 bbl/d of
39 degrees oil from the Forties Sandstone from 20 feet of net pay in 1990. The second well of the program will
be drilled immediately after completion of the initial well. This well on a separate structure also targeting
oil in the Forties sandstone, is located 4 kilometers northwest of the first location. Both locations are
covered by 3D seismic and AVO analysis.

Oilexco is listed on the Alternative Investment Market of the London Stock Exchange plc ("LSE-AIM") and the TSX
Venture Exchange ("TSX-V"), trading under the symbol OIL.

-30-

FOR FURTHER INFORMATION PLEASE CONTACT:

Oilexco Incorporated
Arthur S. Millholland
President
[phone]

OR

Oilexco Incorporated
Brian L. Ward
Chief Financial Officer
[phone]

The TSX Venture Exchange has not reviewed nor accepts responsibility for the adequacy or accuracy of this News
Release

INDUSTRY:  OIL
SUBJECT:   OEX

-0-

								
OILEXCO