Under the terms of the letters of intent, the well will spud no later than January 31, 2005. The well is being designed to test prospective objectives that range from 27,000 feet to more than 30,000 feet. The prospect covers multiple blocks in the South Timbalier and Ship Shoal regions offshore Louisiana. ExxonMobil will operate the Blackbeard West Prospect. The undisclosed third party's participation is subject to approval by its Board of Directors. Newfield will be carried for a 23% working interest in the Blackbeard West Prospect to the objective depth, subject to certain limitations.
The Blackbeard West Prospect is subject to a 1.25% overriding royalty interest held by the Treasure Island Royalty Trust (OTC Pink Sheets: TISDZ). Treasure Island Royalty Trust was established in connection with Newfield's November 2002 acquisition of EEX Corporation. The sole purpose of the trust is to hold non-expense bearing overriding royalty interests in future production from the "ultra-deep" zones of the Treasure Island area.
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