Kerr-McGee Turns on the Taps at Ticonderoga Field Early

Ticonderoga Field - GOM
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Kerr-McGee says the Ticonderoga field in the deepwater Gulf of Mexico achieved first production on Feb. 16, nearly two months ahead of schedule. Ticonderoga, located on Green Canyon block 768 in 5,250 feet of water, consists of two subsea wells tied back to Kerr-McGee's 100%-owned Constitution spar located on Green Canyon block 680. Kerr-McGee operates Ticonderoga with a 50% working interest. Noble Energy owns the remaining 50% working interest.

Ticonderoga has an estimated resource range of 30 million to 50 million barrels of oil equivalent and has reached peak production volumes of approximately 20 thousand barrels of oil per day and 15 million cubic feet of natural gas per day.

"This truly is a remarkable achievement by our employees and contractors whose execution of this project was second to none," said Dave Hager, Kerr- McGee chief operating officer. "This team not only expanded the capacity of the spar, but kept the project in line with budget and persevered through two massive hurricanes in the Gulf of Mexico to safely install the Constitution spar on schedule. These efforts enabled the Ticonderoga field to begin production earlier than anticipated and once again demonstrated that Kerr- McGee is a recognized leader in efficiently executing deepwater developments."

First production from the Constitution field is expected in the second quarter of 2006. The Constitution truss spar, a floating production facility, was originally modeled after Kerr-McGee's Gunnison spar located on Garden Banks block 668; however, following the discovery of Ticonderoga in April 2004, Constitution's capacity was expanded to accommodate the additional production. As a result, Constitution currently has the capacity to process 70,000 barrels of oil per day and 200 million cubic feet of natural gas per day -- an increase in oil capacity of approximately 75% from its initial design. The spar is located in nearly 5,000 feet of water approximately 190 miles south of New Orleans, La.

"The Constitution facility is Kerr-McGee's sixth operated hub in the deepwater Gulf of Mexico," added Hager. "The value of each of these hubs continues to grow through the allocation of expenses and processing fees as additional satellite fields are developed. In addition to the significant value of the Ticonderoga field, we have added $50 million in value to our Constitution facility by expanding its capacity to process the Ticonderoga production."

Kerr-McGee holds interests in more than 10 blocks in the Constitution area. The company currently is drilling an exploration well at the Caesar prospect nine miles to the east of Constitution and plans to drill another exploratory well in the Green Canyon area later this year.

In the deepwater Gulf of Mexico, Kerr-McGee also is partnering in the development of two other hub facilities, Independence Hub and Blind Faith. Kerr-McGee has interest in three separate subsea developments that will be tied into the Independence Hub facility, which will be installed in the Atwater Valley area of the eastern gulf in approximately 8,000 feet of water. First production from Independence Hub is expected in mid-2007. Kerr-McGee also holds a working interest in the Blind Faith development, which will be located on Mississippi Canyon blocks 695 and 696 in approximately 7,000 feet of water. First production is expected in mid-2008.

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