Texaco North Sea U.K. Company has exercised its second option to extend the Contract for the production platform Northern Producer for a period of six months from July 6, 2002 to January 5, 2003. Texaco has two additional 6-month options plus four additional twelve-month options. The extension is made in accordance with terms and conditions of the present contract. The dayrate for the option period is a fixed gross rate of U.S.$105,000 per day plus a tariff rate of U.S. $1.25 per barrel of oil produced from Phase II and U.S. $1.85 per barrel produced from third party accumulations. There is no tariff paid for the remaining Phase I production during the option periods starting January 6, 2002.
Texaco will commence the workover on one of the present producing wells in addition to drilling and completion of one new producing well on Galley (Phase II) during this month with the Noble Drilling's jackup, Noble Ton van Langeveld. It is expected that this program will boost production significantly from the present level of 25,000 barrels/day during the latter part of this year.