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Oilexco Inc. (OIL : TSX-V : C$3.50) - Speculative Buy Mark Redway Comment: Oilexco operations update Oilexco has announced initial results from the first deviated hole at the 15/25e-11 location appraising the Brenda discovery in the North Sea. The well encountered a different oil water contact (approx 30ft higher) to the previous and closest well, 15/25b-10, located 1.5km to the southwest. This suggests that the new well is testing a separate accumulation and also means that Brenda, as we now know it, consists of three distinct reservoirs. The reservoir quality and sands are of similar quality in 15/25e-11 to those in previous wells although it is estimated that the gross oil pay is only around half that found in 15/25b-10 (25 ft as opposed to 50ft). This could be seen as another successful appraisal well at Brenda as without doubt oil has been encountered. However, it must be said that it was expected the 11 well would be a simple extension to the 10 well. Given that it is not and that the thickness of the gross pay is less, we believe it is prudent to cut Brenda's ultimate potentially recoverable reserves from 200 to 140 mmbbls. We have also trimmed the probability of success for reserves in excess of 60 mmbbls (from 50% to 40% for an additional 40 mmbbls and from 30% to 20% for a further 40 mmbbls). The shares remain a SPECULATIVE BUY as attractive upside still remains in the near term.