Kerr-McGee Turns On the Tap at Nansen

Kerr-McGee Oil & Gas announced that the Nansen field, in the deepwater Gulf of Mexico, achieved first production on Jan. 28, 2002 from the first of three subsea wells. Daily production from the Nansen field is expected to ramp up to a peak rate of about 40,000 barrels of oil and 80 million cubic feet of gas during the fourth quarter of 2002 as completion activities at the remaining nine dry tree wells are completed. Kerr-McGee operates the Nansen area with 50% interest. Its partner is Ocean Energy Inc., 50%.

Located in 3,700 feet of water, the Nansen area, which includes East Breaks blocks 601, 602 and 646, was developed with the world's first truss spar. The new spar design, featuring an open truss structure, enhances the spar's stability while reducing size and cost. Utilizing this new, more efficient and cost-effective spar design, Kerr-McGee achieved first production at this deepwater field less than two years after sanctioning development. Successful development drilling activities at the Nansen field have increased estimated reserves into the range of 140 million to 180 million barrels of oil equivalent.

"The start-up of Nansen marks another deepwater success and industry first for our company," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "This development sets a deepwater record for Kerr-McGee, and I commend our joint venture team of deepwater experts for using innovative, new technology that allows us to maximize the value of these assets. We are developing two additional deepwater hubs using the truss spar design -- Boomvang, scheduled to come on stream during the second quarter, and Gunnison, set for first production in early 2004."

The Nansen spar, named the Kerr-McGee Global Producer V, is designed for daily production of 40,000 barrels of oil and 200 million cubic feet of gas. Excess capacity at the spar allows for development and processing of production from satellite fields around the Nansen area. Kerr-McGee, along with partner Ocean, is developing the Navajo gas field at East Breaks 690 as a subsea tieback to the Nansen spar. First production from the Navajo field is expected mid-year 2002. A separate exploratory well is currently drilling at the West Navajo prospect which, if successful, would also be tied back to the Nansen facility.

Kerr-McGee and Ocean have leveraged the success of the Nansen project by forming a joint venture to explore 181 undeveloped leases in the deepwater gulf in addition to the Nansen and Boomvang areas. This venture has already resulted in the discovery of the Red Hawk field, Garden Banks 877, where reserves are estimated in the range of 300 billion to 500 billion cubic feet of gas equivalent. Development options for the Red Hawk area are currently being evaluated.


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