Pioneer and Armstrong drilled three wells in the area in 2003 that established the existence of potentially commercial quantities of oil in Jurassic-aged sands. The field may extend beneath the acreage covered under the farm-in agreement. The agreement also gives Pioneer and Armstrong the right to purchase 3-D seismic and obtain access to other proprietary data that will be used to complete a study of the commercial potential of the area, expected to be completed in 2004. ConocoPhillips retains certain rights to the leases including the right to participate in any project ultimately sanctioned by Pioneer and Armstrong.
Scott D. Sheffield, Pioneer's Chairman, President and Chief Executive Officer, stated, "This farm-in was a critical step for Pioneer to move forward in evaluating potential development. We look forward to continuing to work with ConocoPhillips with the joint goal of expanding oil production from the area."
Chris Cheatwood, Pioneer's Executive Vice President of Worldwide Exploration, added, "Alaska is an important component of our North American exploration strategy and we are pleased to conclude this arrangement with ConocoPhillips. We have experienced first-hand ConocoPhillips' commitment to the state of Alaska and their willingness to work with parties like Pioneer seeking to evaluate the potential for new field exploration and development."
Rick Mott, Vice President of ConocoPhillips Alaska, added, "ConocoPhillips is pleased to work with Pioneer and Armstrong on Alaska's North Slope. They bring innovative approaches to exploration and production and their success will help lower the shared costs for all North Slope producers."
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