Oilexco Incorporated ("Oilexco" or "the Company") (TSX:OIL) (LSE:OIL) provides
the following operations update.


Debt Facility

On July 4, 2008, the Company announced that it had signed an engagement letter
with respect to refinancing Oilexco's current debt obligations and increasing
Oilexco's total debt availability from US$700 million to US$1 billion. The
credit facility was to be underwritten by a syndicate of key relationship banks,
subject to standard internal credit approvals and due diligence. Since the July
4th announcement was made the Company has worked closely with its banks to
progress this facility, and has received extremely positive feedback on the
Company's financial position and its viability as a credit partner for the
potential syndicate. However, due to the unprecedented liquidity and volatility
issues facing the credit markets, the process to financial close is taking a
little longer than anticipated. Therefore, given that Oilexco is fully funded
for the remainder of its 2008 capital programme and has strong cashflow because
of its current production base, the Company feels it is prudent to actively
monitor, and where necessary, review the refinancing process in conjunction with
its banking and other advisors, and evaluate alternative financing options
available to it in the current market. A further update will be provided in due
course.


Development and Production Guidance

In addition to evaluating the refinancing option, Oilexco is also reviewing the
timing of some of its development programs. The principal cause of the review is
not related to financing, but other issues including the installation of the
Sevan Voyager FPSO vessel for the Shelley Field and some weather induced delays.
The timing for the first well from the Shelley field to begin production has
been pushed back to December 2008 as a result of delays to the Sevan Voyager,
which is now scheduled to be floated to location in mid-November 2008, depending
on weather conditions. As a result, the Company is revising its near-terms
production expectations, and expects to reach a level of 35,000 bopd either by
the end of 2008 or within Q1 2009.


Oilexco continues to make good progress on other key operational activities. The
program to drill additional production wells during Q4 2008 and into Q1 2009 at
both the Nicol and Caledonia fields has commenced. The first oil tie-ins to
these wells are also subject to weather conditions. Oilexco also successfully
completed its production optimization work on the Balmoral FPV, and is working
through minor technical issues at the Brenda manifold with positive results.


Fourth Quarter Drilling

The Sedco 712 rig is currently conducting development drilling on the Shelley
field, after which it will move to the Nicol field to drill a second production
well. After Nicol, the Sedco 712 will return to Shelley to conduct final
completion activities in preparation for first oil. The Ocean Guardian is
conducting appraisal drilling immediately east of the Huntington discovery in
Block 22/14a in the Paleocene zone, after which it will then conduct appraisal
drilling in the Kildare Block.


About the Company

Oilexco is an oil and gas exploration and production company active in the
United Kingdom. Oilexco's producing properties, exploration and development
activities are located in the UK Central North Sea, specifically in the Outer
Moray Firth and Central Graben areas. Oilexco operates in the United Kingdom
through its wholly owned subsidiary, Oilexco North Sea, a company registered
under the laws of England and Wales. Oilexco shares are listed for trading on
the London Stock Exchange (LSE) and the Toronto Stock Exchange (TSX) under the
symbol "OIL".


Forward Looking Statements

This disclosure contains certain forward-looking statements that involve
substantial known and unknown risks and uncertainties, certain of which are
beyond Oilexco's control, including: the impact of general economic conditions
in the areas in which Oilexco operates, civil unrest, industry conditions,
changes in laws and regulations including the adoption of new environmental laws
and regulations and changes in how they are interpreted and enforced, increased
competition, the lack of availability of qualified personnel or management,
fluctuations in commodity prices, foreign exchange or interest rates, stock
market volatility and obtaining required approvals of regulatory authorities. In
addition there are risks and uncertainties associated with oil and gas
operations, therefore Oilexco's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these forward-looking
statements will transpire or occur, or if any of them do so, what benefits,
including the amounts of proceeds, which Oilexco will derive therefrom. All
statements included in this press release that address activities, events or
developments that Oilexco expects, believes or anticipates will or may occur in
the future are forward-looking statements. These statements include future
production rates, completion and production timetables and costs to complete
wells, and production facilities. These statements are based on assumptions made
by Oilexco based on its experience perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate in the circumstances.