Kerr-McGee Capitalizes on Deepwater Hub With Satellite Discovery
June 30 2005 - 5:00PM
PR Newswire (US)
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/
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