PROPERTY ACQUISITION / Canadian Occidental Petroleum Ltd. Acquisition
of Production in the Gulf of Mexico
CALGARY, Jan. 22 /CNW/ - Canadian Occidental Petroleum (''CanadianOxy'')
announces the acquisition of Shell's working interest in Eugene Island Block
18 field for US $30 million. This gives CanadianOxy an approximate 90% working
interest in the field's reserves.
The field is located in approximately eight feet of water, about 10 miles
offshore St. Mary Parish, Louisiana. The field has produced over 66 million
barrels of oil and 450 billion cubic feet of natural gas since it was
discovered in 1954. Hydrocarbons are located in 23 productive sands trapped
against a major east to west fault that contains multiple bisecting faults.
Significant Incremental Reserve Potential
Daily production is currently averaging 22 million cubic feet of natural
gas and 400 barrels of oil net to CanadianOxy. CanadianOxy believes there is
significant unbooked reserve potential contained in this field and has
identified seven low risk workover and drilling opportunities to exploit this
potential
Production Growth Opportunities Identified
''Block 18 is an attractive acquisition for us'' said CanadianOxy
President and Chief Executive Officer Victor Zaleschuk. ''This is high value
natural gas production in the heart of a core area where we have a strong
competitive advantage. We believe we can increase production to over 35
million cubic feet of gas per day and cashflow to $20 million per year by
implementing the identified development opportunities. There is a lot of
upside potential beyond that so this project will generate significant
incremental value for our shareholders.''
The acquisition of Block 18 creates numerous opportunities for synergies.
CanadianOxy currently operates two fields in the Eugene Island area consisting
of blocks 254, 255, 257, 258 and 259 and has an interest in non-operated
Eugene Island 135 where a fourth well will commence drilling soon. Following
the Eugene Island 18 acquisition, CanadianOxy's production from the Eugene
Island area will total approximately 7,500 barrels of oil and 64 million cubic
feet of natural gas per day.
CanadianOxy is an independent, Canadian-based global energy and chemicals
company. Core business activities include the exploration, development,
production and marketing of crude oil and natural gas in Canada, the United
States, Yemen, Nigeria, Australia, Colombia and Indonesia.
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