The transaction included the company's 50% interest in two production sharing contracts for Blocks 7 and 21, and its 4.2% non-operating interest in Oleoducto De Crudos Pesados Ltd. (the OCP pipeline). Gross daily production from these assets is approximately 14,000 barrels of oil. This transaction, which is effective July 1, 2002, has received government approval and is going through the registration process in Ecuador.
"With this transaction, we are more than half way to our goal of $1 billion in property sales during 2002," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "Our asset sale program is resulting in a significant reduction in debt. We also expect a reduction in our unit lease operating expense of more than 20% next year, relative to 2002."
The Ecuadorian asset sale follows several others by Kerr-McGee this year as the company continues rationalizing non-core assets.
The announced sales to date, subject to working capital and other adjustments, are: Indonesia, $170 million; the Bayu-Undan project, $132 million; the company-operated Northern North Sea fields (Murchison, Ninian, Columba, Lyell and Strathspey fields), $120 million, plus a 5% working interest in the Harding field; the Ross field, $22 million; and the Hutton tension leg platform, $29 million. The divestitures total more than $500 million in proceeds.
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