Saxon Oil drills successful well in Kansas



    Gas gathering operations start up, as well

    DALLAS, Oct. 2 /CNW/ - Saxon Oil Company Ltd. ("Saxon") (TSX VENTURE:
SXN) (FRANKFURT: OVG) (BERLIN: OVG) successfully drilled its first low BTU
shallow gas well to 1220 feet in Harvey County, Kansas, near its Mid Kansas
Gas Gathering joint venture ("MKGG") gas gathering system. The American
Energies Talbot 1-23 exploratory well drill stem tested the Red Cave sandstone
at rates exceeding 900 thousand cubic feet (Mcf) per day with no water and
bottom hole pressures of more than 500 psi. Electrical logs confirmed
gas-saturated sands with excellent porosity. Construction of flow lines to the
MKGG gas gathering system is in process. Saxon has a 50% working interest in
the well and in the offset locations.
    Richard G. Green, president and CEO of Saxon said, "We are pleased with
the successful test of this well. The Talbot 1-23 well was efficiently
drilled, tested and cased in less than 48 hours, and the test gas rates were
better than expected. We have a significant leasehold position around this
well. Saxon plans to maximize development drilling in this area for delivery
of gas to our own gathering system."
    MKGG, in which Saxon's wholly owned subsidiary Central Kansas Gas
Gathering (CKGG) is a 50% partner, is now gathering low BTU gas through the
joint venture's 400 miles of gas gathering systems. In the first two months of
joint venture operations, MKGG booked revenue of more than US$1.25 million,
with a net income of ($30,443). The loss was expected due to the high start up
costs of returning certain shut-in segments of the gathering system to
service. Saxon expects revenue numbers to increase significantly and to reach
profitability as new wells are added and other line segments are returned to
service. The recently acquired cryogenic gas processing plant with 10 MMcf per
day capacity has been successfully dismantled in Texas and is in transit to
Kansas. This plant, when operational, will allow for the extraction of high
value Helium and Nitrogen from the gas, which will also improve the quality of
methane to meet transcontinental pipeline specifications, thereby increasing
the gas value and marketability.
    Saxon's strategy is to combine its exploration & production operations
with the acquisition and operation of selective gas gathering and processing
systems to maximize the profitability in both market segments. The company
will receive revenue for its own production, as well as fees from third
parties for transporting and processing their gas production.
    Also in western Kansas, Saxon has acquired an additional 320 acres of
leasehold in Stanton County, Kansas, on a new prospect surrounded by
production within the Arroyo Field. Arroyo Field produces from multiple
reservoirs but principally from prolific Morrow sandstones. Arroyo Field was
discovered in 1989 and has produced from thirty-nine wells, which have average
production to date of 71,000 barrels of oil and 1 BCF of gas. Saxon owns a 75%
working interest in this acreage. Saxon plans to initiate drilling activity on
this prospect in first Quarter 2009.

    
    About Saxon Oil Company Ltd:
    ----------------------------
    

    The Company is a Tier 1 Texas-based Canadian company, trading on the TSX
Venture Exchange under the symbol SXN. The Company is an independent oil and
gas company engaged in the acquisition, development and production of oil and
natural gas reserves. The Company seeks to deliver strong shareholder returns
through an effective exploration and development program that incorporates
sound business practices with the latest oil field technologies. The goal is
to steadily increase proven reserves of oil and natural gas - which, in turn,
will lead to enhanced cash flows and earnings per share.

    This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding plans for
completion, production potential, other targeted areas and expansion and
development plans and objectives of Saxon Oil Company Ltd. are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such
statements.

    
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy and accuracy of this Release.
    

    %SEDAR: 00005554E




For further information:

For further information: Saxon Oil Company Ltd., Patrice Nazareno, Toll
Free: 1-866-515-7708, Email: quaycomm@shaw.ca, www.saxonoil.com

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Saxon Oil Company Ltd.

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