Newfield Signs Production Sharing Contract on PM 323 Offshore Malaysia
Newfield Exploration's subsidiary signed a new production sharing contract (PSC) on block PM 323 offshore Malaysia. The PSC is in partnership with PETRONAS Carigali Sdn. Bhd. (Carigali), the exploration and production subsidiary of Malaysia's state-owned Petroliam Nasional Berhad (PETRONAS). This is the third PSC that Newfield has been awarded offshore Malaysia.
Newfield will operate PM 323 with a 60% interest. Carigali holds the remaining 40% interest. PM 323 covers approximately 335,000 acres in the Malay Basin and is located about 185 miles offshore Kemaman, Terengganu. The average water depth on the block is about 200'. PM 323 is located approximately 40 miles from Newfield's existing Peninsular Malaysia acreage in PM 318.
Newfield has committed to invest approximately $160 million in PM 323 over the next three years. There are seven existing discoveries located on the block. Newfield and Carigali will immediately begin the process to develop the East Belumut and Chermingat oil fields. The two fields are expected to be on-line by early 2008 at a gross rate of approximately 15,000 barrels of oil per day (BOPD). The partners will also drill five exploration and appraisal wells and acquire 600 sq. kilometers of 3-D seismic on the block.
"Malaysia has developed into a focus area for us, offering visible production growth over the next few years and an inventory of attractive exploration prospects that could provide additional developments," said David A. Trice, Newfield Chairman, President and CEO. "We have developed a great business partnership with Carigali and PETRONAS. The Malay Basin is a prolific hydrocarbon province with good fiscal terms, attractive world markets and growing infrastructure. We are excited about these new field developments and the upside this new PSC brings to our growing portfolio of impact opportunities."
Newfield entered Malaysia in 2004 with the signing of two PSCs -- PM 318 and deepwater Block 2C. Newfield owns a 50% interest in PM 318, operated by Carigali, where current gross production is approximately 10,000 BOPD. In July 2005, the partners plan to begin drilling the first of six wells on PM 318. Three wells will be drilled to develop the Abu Field, expected to be on-line in early 2007 at an initial production rate of approximately 12,000 BOPD. The other three wells will be drilled to explore for new fields and appraise an existing discovery.
Newfield has a 60% interest in deepwater Block 2C which covers 1.2 million
acres offshore Sarawak. Newfield has secured a deepwater semi-submersible rig
to drill the first of two high-potential exploration wildcats in 2006.
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