More good news for OEI holders
Development scenarios are being evaluated for the entire East Breaks area. The Company anticipates that its estimated net reserves attributable to the Nansen/Boomvang complex have the potential to exceed its total estimated year 2000 production.
HOUSTON, Jan. 7 /PRNewswire/ -- Ocean Energy (NYSE: OEI, news, msgs) announced today several major developments that will enhance its position in the Gulf of Mexico.
(Photo: NewsCom: newscom.com )
Nansen/Boomvang Success
Ocean Energy continues to report successful results from appraisal drilling of its Nansen discovery in the Gulf of Mexico on East Breaks Block 602. A third well has logged 240 feet of oil and gas pay. The well is located in 3,680 feet of water and is approximately 3,000 feet east of the discovery well. A fourth well will be spud during the first quarter to further delineate reserve potential. Ocean Energy holds a 50 percent working interest in the East Breaks 602 #3 well, and the remaining working interest is owned by Kerr-McGee Oil and Gas Corp., a wholly owned subsidiary of Kerr-McGee Corp. (NYSE: KMG, news, msgs), as operator.
Additionally, Ocean Energy continues successful appraisal drilling in the greater Boomvang area with the North Boomvang prospect. The East Breaks Block 643 #3 well, located in 3,449 feet of water, logged 165 feet of net oil and gas pay. The Company holds a 20 percent working interest in the five-block area. Partners include Kerr-McGee, as operator with a 30 percent working interest, and Reading & Bates Development Co., a wholly owned subsidiary of R&B Falcon Corp., with 50 percent.
Development scenarios are being evaluated for the entire East Breaks area. The Company anticipates that its estimated net reserves attributable to the Nansen/Boomvang complex have the potential to exceed its total estimated year 2000 production.
2000 Drilling Program with Duke Energy Announced
Duke Energy Hydrocarbons LLC and Ocean have agreed to another joint venture Gulf of Mexico drilling program for 2000. Duke Energy will acquire an approximate 50 percent working interest in up to 14 exploratory wells. Duke Energy has committed approximately $70 million toward the program during 2000.
Ocean has also purchased certain working interests held by Duke Energy in four prospects that were part of a 1999 Gulf of Mexico joint venture drilling program. Production from the acquisition is anticipated to contribute an average of approximately 2,400 net barrels of oil equivalent per day in 2000 with additional development activities planned.
"Our continued success in the East Breaks area of the Gulf of Mexico is an exciting beginning to our worldwide high-impact exploratory program in 2000," said James T. Hackett, Chairman, President and Chief Executive Officer. "The Duke Energy transactions reflect our goal to efficiently explore for and exploit reserves on Ocean's inventory of Gulf of Mexico properties."
Withdrawal from Bangladesh
The Company earlier reported in the third quarter that it was carefully reviewing its exploration program in Bangladesh. As a result of its further review, Ocean has decided to discontinue any further operations in Bangladesh, and will incur an $18 million impairment ($12 million after tax) in the quarter ended December 31,1999.
"We want to remain focused on projects that make the biggest impact on reserve replacement efficiency, cash margins and return on capital. Given our favorable Gulf of Mexico position and other promising international opportunities, Bangladesh does not meet our enhanced economic thresholds," concluded Hackett.
Ocean Energy is an independent energy company engaged in the exploration, development, production, and acquisition of crude oil and natural gas. North American operations are focused in the shelf and deepwater areas of the Gulf of Mexico, the Permian Basin, Midcontinent and Rocky Mountain regions. Internationally, the company explores for and produces oil and gas in West Africa (Cote d'Ivoire and Equatorial Guinea), Egypt, Russia and Indonesia. Ocean Energy also has exploration programs underway in Angola, Pakistan and Yemen.
Certain statements in this news release regarding future expectations, plans for acquisitions, dispositions, and oil and gas reserves, exploration, development, production and pricing may be regarded as "forward looking statements" within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as operating hazards, drilling risks, the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company's SEC filings, including the Annual Report on Form 10-K for the year ended December 31, 1998. Actual results may vary materially.
SOURCE Ocean Energy, Inc.
CONTACT: William L. Transier, Executive Vice President and Chief Financial Officer of Ocean Energy, Inc., 713-265-6161
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