Oilexco Files Amended and Restated Preliminary Prospectus for Offering of Up to U.S. $150,000,000

Oilexco Files Amended and Restated Preliminary Prospectus for Offering of Up to U.S. $150,000,000 of Senior Unsecured Convertible Bonds and Up to 20,000,000 Common Shares
19:56 EST Wednesday, November 19, 2008


CALGARY, ALBERTA--(Marketwire - Nov. 19, 2008) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Oilexco Incorporated ("Oilexco" or the "Corporation") (TSX:OIL) (LSE:OIL) today announced that it has filed an amended preliminary prospectus with securities regulators in certain provinces of Canada for an offering of Convertible Senior Unsecured Bonds and Common Shares. The offering is being marketed on a commercially reasonable efforts basis by a syndicate led by Canaccord Adams Inc., and including FirstEnergy Capital Corp. (the "Agents").

The offering being marketed consists of up to U.S. $150,000,000 aggregate principal amount of Convertible Senior Unsecured Bonds due 2013 (the "Bonds") and up to 20,000,000 common shares (the "Common Shares") at an issue price of C$2.25. Subject to market conditions, the offering is anticipated to close on or about December 5, 2008.

The Bonds are expected to be senior, unsecured obligations of Oilexco bearing interest at an annual rate of 15% payable quarterly in arrears commencing in March, 2009 and maturing five years and one day following the closing date. Bonds are expected to be convertible at the option of the holder into common shares of Oilexco at a conversion price (using a fixed exchange rate of U.S.$1.00=C$1.2239) of C$2.74 per common share from the 41st day after the closing date to the 6th business day before the maturity date. If a holder converts Bonds before the third anniversary of the closing date, then Oilexco would pay to the holder two-thirds of the nominal value of the remaining interest that would otherwise be payable on the Bonds up to the third anniversary of the closing date (the "Make-Whole"). The Make-Whole premium would be payable in cash or (subject to regulatory approval) Oilexco common shares at the option of Oilexco, with the number of common shares determined by the volume weighted average trading price of Oilexco's common shares on the Toronto Stock Exchange for the ten trading days prior to the date of conversion.

Oilexco would have the right to convert all but not some only of the Bonds into common shares at the same conversion price from the date which is three years and 21 days after the closing date if the value of a common share issuable on conversion exceeds 200% of the conversion price over a certain trading period.

The net proceeds from the offering will be used to repay o30 million of bank indebtedness, which allows the deferral of the remaining o70 million until November 2009, to fund the Corporation's 2009 capital spending program at its development properties and for general corporate purposes.

An amended and restated preliminary prospectus qualifying the distribution of the Bonds and Common Shares has been filed in the provinces of British Columbia, Alberta, Manitoba and Ontario and the offering is subject to regulatory approval. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States unless exemptions from the registration requirements of such Act and applicable state securities laws are available.

About Oilexco

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 Limited, 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 press release includes forward-looking statements regarding the proposed offering and the anticipated use of proceeds thereof. These forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Oilexco's control, including: the terms and conditions of the bonds, the completion of the offering, 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.

FOR FURTHER INFORMATION PLEASE CONTACT:

Oilexco Incorporated
Arthur S. Millholland
President
(403) 262-5441




or
Oilexco Incorporated
Brian L. Ward
Chief Financial Officer
(403) 262-5441




or
Oilexco Incorporated
Rob Elgie
Manager Investor Relations
(403) 262-5441


Website: www.oilexco.com

or
Pelham PR
James Henderson
Managing Director
44 (20) 7743 6673




or
Pelham PR
Alisdair Haythornthwaite
Director
44 (20) 7743 6676




or
Canaccord Adams
Jeffrey Auld

44 (20) 7050 6500




or
Canaccord Adams
Eli Colby

44 (20) 7050 6500






--------------------------------------------------------------------------------

Copyright © 2002 Bell Globemedia Interactive.

Bear market rally? +TSX vastly undervalued, UBS says

Wednesday, November 19, 2008 Yola Edwards Technical View


TORONTO (GlobeinvestorGOLD) —Text: Technical charts suggest the vicious market decline may subside temporarily offering investors trading and exit opportunities before further declines take the markets to new multiyear lows. Note: The following chart legend: blue line - 10-Day/Week MA, green line - 20-Day/Week MA, red line - 41-Day/Week MA, pink line - 200-Day/Week MA, and Bollinger bands surround the stock and indexes’ price movements. .

TSX vastly undervalued, UBS says

Wednesday, November 19, 2008
Here's Allan Robinson's At The Bell which you'll find in Thursday's newspaper:

The Canadian economy is slowing, but investors are expecting the worst and, as a result, the S[amp]amp;P/TSX is more than 47 per cent undervalued, said George Vasic, a strategist with UBS Securities Canada Inc.

“It's hard to entertain such notions when the market is down 1,000 points in less than 10 days or so,” he said.

But UBS estimates the S[amp]amp;P/TSX within a year could reach 12,500 points, compared with yesterday's close of 8,490.56 and that target is not far-fetched, Mr. Vasic said. “In part, it is the current valuations that are depressed,” he said. “The target itself is not as lofty as it appears.”

Even with the S[amp]amp;P/TSX at 9,000, the price-to-book value is three standard deviations below the level suggested by the return on equity adjusted for 7-per-cent corporate bond yields, Mr. Vasic said. Put another way, stocks are only undervalued or overvalued that much one out of 100 times, which should be a “reasonably rare event,” he said.

UBS's 12-month index target is based on 2009 S[amp]amp;P/TSX share profit of $750 and that would still leave the index within one standard deviation, which indicates the valuation would be higher two-thirds of the time. If the S[amp]amp;P/TSX earnings slumped to $600 – which is one-half the earnings level projected just six months ago – the 9,000 level would still be relatively inexpensive.

Although the implied price-to-earnings multiple of 16.6 times looks high, P/Es tend to expand sharply when earnings slow sharply. That multiple is lower than at the end of any previous earnings decline since 1987, the UBS report said.

HOW WILL THE MARKET REACT?

“Investors tend to underestimate, if not ignore altogether, the tendency for multiples to rise when earnings decline,” UBS said. As a result of extremely challenging circumstances such as investors are facing today, that leads to very bearish forecasts when low multiples are applied to low earnings predictions.

“It will take time for investors to remove the discount,” Mr. Vasic said. It's a 12-month target and it would only take the S[amp]amp;P/TSX to where it was on Sept. 25.

“We have had three, four or five false starts already,” Mr. Vasic said. “Investors are waiting to see if things are getting better, but for now they are assuming the worst.”

Investors don't believe that the interest rate cuts are the answer, he said. Although fiscal measures often start after an economic recovery begins, governments are moving more swiftly this time, he said.



© Copyright The Globe and Mail