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Kerr-McGee Capitalizes on Deepwater Hub With Satellite Discovery
OKLAHOMA CITY, June 30 /PRNewswire-FirstCall/ -- Kerr-McGee Corp. (NYSE:KMG)
announced further deepwater Gulf of Mexico success with a discovery at East
Breaks 599. Kerr-McGee estimates that the field has potential resources in the
range of 10 million to 20 million barrels of oil equivalent (BOE). The field
will be developed as a subsea tieback to the Kerr-McGee-operated Boomvang
production hub, located approximately three miles south on East Breaks block
643. East Breaks 599, located in 3,220 feet of water, is operated by
Kerr-McGee with a 33.34% interest. Kerr-McGee's partners in East Breaks 599
are Amerada Hess Corp. (NYSE:AHC) and Marubeni Oil & Gas (USA) Inc., each with
a 33.33% interest.
The East Breaks 599 well, spud on May 27, was drilled to a total measured depth
of 9,142 feet and encountered more than 135 net feet of high-quality oil pay in
several sands. The well will be temporarily abandoned for completion in early
2006.
"Our deepwater hub-and-spoke strategy for developing core areas continues to
add value through satellite successes such as the East Breaks 599 discovery,"
said Dave Hager, Kerr-McGee senior vice president responsible for oil and gas
exploration and production. "We plan additional satellite exploration in the
East Breaks area, with a four-well exploratory program at Northwest Nansen near
our Nansen production hub. We expect to spud the first well later this summer
and estimate that the combined resource potential for the four fault blocks is
in the range of 20 million to 50 million BOE."
The exploratory well at the Chilkoot prospect, located on Green Canyon block
320, is noncommercial based on results to date. Well data is being evaluated
and upon completion, additional appraisal will be considered. The well,
drilled to a company-record measured depth of 32,023 feet, is being temporarily
abandoned and will be considered for future re-entry or sidetrack. Chilkoot is
the deepest penetration in western Green Canyon and the data obtained is
important to the geological understanding in this under-explored area where
Kerr-McGee holds interests in approximately 35 blocks. Kerr-McGee operates
Chilkoot with a 33.33% interest.
The rig will be moved from Chilkoot to the Conquest prospect, located on Green
Canyon block 767 in the company's Constitution corridor. Following the
Conquest appraisal, the company expects to spud the West Covington prospect on
Green Canyon block 765. Kerr-McGee operates Conquest and West Covington with
50% working interests. Conquest and West Covington have an estimated gross
resource potential in the range of 90 million to 240 million BOE and could add
significant value in the Constitution area. The Constitution hub, which
includes the development of Ticonderoga through a subsea tieback, is Kerr-
McGee's sixth-operated deepwater hub in the Gulf of Mexico. First production
is expected in mid-2006.
Kerr-McGee estimates its second-quarter exploration expense will be
approximately $135 million, which includes an approximate $18 million charge
related to Chilkoot.
Kerr-McGee Corp. is an Oklahoma City-based energy and inorganic chemical
company with worldwide operations and assets of more than $14 billion. For
more information, visit http://www.kerr-mcgee.com/ .
Statements in this news release regarding the company's or management's
intentions, beliefs or expectations, or that otherwise speak to future events,
are "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include those statements preceded by, followed by or that otherwise include the
words "appear," "believes," "expects," "anticipates," "intends," "estimates,"
"projects," "target," "budget," "goal," "plans," "objective," "outlook,"
"should," or similar words. In addition, any statements regarding possible
commerciality, development plans, capacity expansions, drilling of new wells,
ultimate recoverability of reserves, future production rates, cash flows and
changes in any of the foregoing are forward-looking statements. Future results
and developments discussed in these statements may be affected by numerous
factors and risks, such as the accuracy of the assumptions that underlie the
statements, the success of the oil and gas exploration and production program,
the price of oil and gas, drilling risks, uncertainties in interpreting
engineering data, demand for consumer products for which Kerr- McGee's oil and
gas business supplies raw materials, the financial resources of competitors,
changes in laws and regulations, the ability to respond to challenges in
international markets (including changes in currency exchange rates), political
or economic conditions in areas where Kerr-McGee operates, trade and regulatory
matters, general economic conditions, and other factors and risks identified in
the Risk Factors section of the company's Annual Report on Form 10-K and other
U.S. Securities and Exchange Commission (SEC) filings. Actual results and
developments may differ materially from those expressed or implied in this news
release.
The SEC permits oil and gas companies, in their filings with the SEC, to
disclose only proved reserves. We use certain terms in this release, such as
"potential resources," that the SEC's guidelines strictly prohibit us from
including in filings with the SEC. Investors are urged to consider closely the
disclosures and risk factors in our Forms 10-K and 10-Q, File No. 1-16619,
available from Kerr-McGee's offices or web site, http://www.kerr-mcgee.com/ .
You also can obtain these forms from the SEC by calling 1-800-SEC-0330.
Media contacts: Debbie Schramm John Christiansen
Direct: 405-270-2877 Direct: 405-270-3995
Pager: 888-734-8294 Cell: 405-406-6574
Investor contact: Rick Buterbaugh
Direct: 405-270-3561
http://www.newscom.com/cgi-bin/prnh/19981012/DAM029
http://photoarchive.ap.org/
DATASOURCE: Kerr-McGee Corp.
CONTACT: media, Debbie Schramm, +1-405-270-2877, or pager,
+1-888-734-8294, or , or John Christiansen, +1-405-270-3995,
or cell, +1-405-406-6574, or , or investors, Rick
Buterbaugh, +1-405-270-3561, all of Kerr-McGee Corp.
Web site: http://www.kerr-mcgee.com/