"We are confident in the procedures we follow for estimating reserves, and we believe this relationship with NSAI will provide our stakeholders with additional assurance of the accuracy of our reserve estimates," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer.
Some of Kerr-McGee's proved reserves already have been evaluated by independent experts, including those acquired through the recent merger with Westport Resources Corp. In addition, Ryder Scott Company reviewed the geoscience and engineering data and verified Kerr-McGee's approach to the assessment of reserves for its 100%-owned Constitution field in the deepwater Gulf of Mexico. In 2004, NSAI will review procedures, methodology and reserve calculations for Kerr-McGee's major fields constituting approximately 50% of the company's total proved reserve base prior to the Kerr-McGee and Westport Resources Corp. merger. In 2005, Kerr-McGee plans to expand third-party reviews to cover approximately 75% of its total proved reserve base, including its top 25 to 30 fields.
"We continually review our reserve estimates and believe our independent consultants will find that our reservoir engineers and geoscientists are using methods that result in accurate reserve assessments," said Dave Hager, Kerr- McGee senior vice president responsible for oil and gas exploration and production. "Our centralized reserve management team ensures we have up-to- date U.S. Securities and Exchange Commission guidance and use consistent processes throughout the company. At least once a year, all of our major fields are reviewed by this team, with at least 80% of our total proved reserve base internally reviewed on an annual basis."
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