Kerr-McGee & EnCana Successfully Test of Discovery Offshore Brazil

Kerr-McGee and EnCana have successfully tested the Chinook field in the BM-C-7 block (Campos Basin) offshore Brazil. The 3-ENC-3-RJS appraisal well, located approximately 2.5 miles southwest of the discovery well drilled in April 2004, reached total depth of 7,650 feet and encountered approximately 110 feet of net pay in the Cretaceous Carapebus formation. The well was drilled by Pride International's semisub, Pride South Atlantic. The appraisal well tested at rates between 1,400 and 1,800 barrels of (14 degree API) oil per day (b/d) during the 72-hour test period, but was limited by the capacity of the test equipment. Initial analysis of the test data indicates this vertical well is capable of producing at initial rates between 4,000 and 5,000 b/d with optimized production equipment.

"We are very encouraged with the continued success we have experienced in the BM-C-7 block," said Dave Hager, Kerr-McGee chief operating officer. "This test confirms the high-quality reservoir in this world-class petroleum province. We plan to immediately drill another vertical appraisal well, updip, approximately 1.5 miles to the northeast of the discovery well, and then consider the potential development scenarios."

Kerr-McGee estimates the Chinook field offers potential resources in the range of 100 million to 200 million barrels of oil. The discovery well 1-ENC-1-RJS, spud on April 29, 2004, drilled to a total depth of 7,884 feet and encountered approximately 190 feet of net pay in the Cretaceous Carapebus formation.

Kerr-McGee owns a 50% working interest in the 133,000-acre BM-C-7 block located in approximately 350 feet of water, approximately 125 miles southeast of Rio de Janeiro. EnCanBrasil, a subsidiary of EnCana Corp. holds the remaining 50% working interest and is the operator of the block.

"Our international exploration program remains very active with two new-field wildcats and the additional appraisal well in the prolific Campos Basin and two wildcats offshore Angola planned in the next six months," said Hager. "These high-impact targets in proven hydrocarbon trends have the potential to provide material growth opportunities beyond those identified from our low-risk development program onshore in the U.S."

Kerr-McGee expects to drill up to eight wells during the next four years in the Campos and Espirito Santo Basins offshore Brazil, with identified targets each carrying an estimated resource potential in the range of 100 million to 400 million barrels of oil.

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