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 Old New BUY BUY Recent Price 186p Mkt Cap. (£m) 290

Company Oilexco (OIL)

Sector Oil & Gas

Comment Blackhorse Well

Forecasts No Change

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

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Recommendation structure, and distribution*
N Buy Add Hold Reduce Sell 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. This document is for the use of the addressees only. It may not be copied or distributed to any other person without the written consent of KBC Peel Hunt Ltd and may not be distributed or passed on, directly or indirectly, to any other class of persons, although KBC Peel Hunt Ltd may in its discretion distribute this document to any other person to whom it could lawfully be distributed by an unauthorised person and without its content being approved by an authorised person. This document has been prepared using sources believed to be reliable, however we do not represent it is accurate or complete. Neither KBC Peel Hunt Ltd, nor any of its directors, employees or any affiliated company accepts liability for any loss arising from the use of this document or its contents. This research does not constitute a personal recommendation or take into account the particular investment objectives, financial situations or needs of individual clients. Analysts are paid in part based on the profitability of KBC Peel Hunt Ltd, which includes remuneration received from investment banking transactions. KBC Peel Hunt Ltd, its directors, employees or any affiliated company may have a position or holding in any of the securities mentioned herein or in a related instrument. This document is for distribution in or from the United Kingdom only to persons who are authorised persons or exempted persons within the meaning of the Financial Services and Markets Act 2000 of the United Kingdom or any order made thereunder or to investment professionals as defined in Section 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. This research is not for distribution to persons in the United States except that KBC Peel Hunt Ltd may distribute this research in reliance on Rule 15a-6(a)(2) of the Securities Exchange Act 1934 to persons that are major US institutional investors. Orders in any securities referred to herein by any U.S. investor should be placed with KBC Financial Products USA, Inc. and not with any of its foreign affiliates. In the United States this publication is being distributed to U.S. Persons by KBC Financial Products USA, Inc., which accepts responsibility for its contents. Where this research is deemed to be objective, KBC Peel Hunt Ltd has published a Conflicts of Interest Policy that is available at http://www.kbcpeelhunt.com/PublicConflictsPolicy.pdf which summarises how KBC Peel Hunt meets the FSA's requirements in this respect. Please note that the share price used in the headline is the mid-market price taken at the close of trading the previous trading day. Additional Disclosure for Oilexco: KBC Peel Hunt Ltd makes a market in this company.

> +20% expected absolute price performance over 12 months +10% to +20% expected absolute price performance over 12 months +/-10% range expected absolute price performance over 12 months -10% to -20% expected absolute price performance over 12 months > -20% expected absolute price performance over 12 months

Recommendation History Buy Hold Buy 01-Jul-05 05-Apr-05 26-Aug-04