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KBC Peel Hunt Ltd 111 Old Broad Street London EC2N 1PH Telephone: +44 (0) 20

KBC Peel Hunt Ltd 111 Old Broad Street London EC2N 1PH Telephone: +44 (0) 20 7418 8900 Facsimile: +44 (0) 20 7417 4646 www.kbcpeelhunt.com

       

Recommendation

Recent

Mkt Cap.

Company

Sector

Comment

Forecasts

Old

New

Price

(£m)

Oilexco (OIL)

Oil & Gas

Blackhorse Well

No Change

BUY

BUY

186p

290

Oilexco (OIL) – Blackhorse well– FCAST: No Change, REC: BUY Oilexco’s Blackhorse well appears to have intersected at least 80 feet of gross hydrocarbon bearing pay in Jurassic aged sandstones. The questions are: how much of this is oil, how much gas? What are the flow rates? The answers should be known in three weeks when the tests on the well are concluded. It should be a pretty good bet that the prospect has come in – at least as well as could have been expected before drilling. To recap, Blackhorse was an old discovery with about 12 million barrels of probable reserves. Oilexco has earned a 40% interest in the field by paying a 60% share of the costs of an appraisal well to test an extension of the field to around 60 million barrels. At the upper end, the prospect should be worth about 50p per share to Oilexco, taking the NAV to 250p per share. The risks of disappointment, while not eliminated, are significantly reduced. Research Analyst - Tony Alves +44 (0)20 7418 8813

Regulatory disclosures and Disclaimer

Recommendation structure, and distribution*

Buy

> +20% expected absolute price performance over 12 months

Add

+10% to +20% expected absolute price performance over 12 months

Hold

+/-10% range expected absolute price performance over 12 months

Reduce

-10% to -20% expected absolute price performance over 12 months

Sell

> -20% expected absolute price performance over 12 months

Corporate #

*Distribution during period 1 July 2005 to 30 September 2005

# KBC Peel Hunt Ltd is committed to providing objective investment research, however KBC Peel Hunt Ltd is broker and/or nominated adviser to, or is retained by, this company and is therefore unlikely to be perceived as objective. This research should therefore be considered as non-objective research. This document is issued by KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by the Financial Services Authority and is a member of the London Stock Exchange; KBC Peel Hunt Ltd is subsidiary of KBC Bank NV.

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Additional Disclosure for Oilexco:

KBC Peel Hunt Ltd makes a market in this company.

Recommendation History

Buy

01-Jul-05

Hold

05-Apr-05

Buy

26-Aug-04