BHP Discovers Oil with Shenzi-2 Appraisal Well

BHP Billiton reports the results of its first appraisal well on the Shenzi field, discovered last year in the deepwater Gulf of Mexico. Shenzi-2 began drilling on September 22, 2003, on Green Canyon Block 653 with the BHP Billiton operated drillship CR Luigs. The well is located in water depths of 4,238 feet and was drilled to a total depth of 25,500 feet; encountering approximately 500 feet of net oil pay in a 1,250 foot gross hydrocarbon column of lower Miocene reservoir sandstones.

Phil Aiken, CEO of BHP Billiton Petroleum said, "We have drilled a successful appraisal well on one of our operated discoveries, and this well result, with excellent quality reservoirs that were appreciably thicker than those encountered in the first Shenzi well, has significantly extended the scale of the oil accumulation discovered by Shenzi-1. The discovery is located along the same geologic trend as our Mad Dog, Atlantis and Neptune fields, and whilst further appraisal drilling will be required to fully define the reserve size, we will be working with our partners to begin studying possible development options."

Following well logging operations and other data collection activities, the partners are planning to drill a sidetrack out of the existing well bore.

BHP Billiton is the designated operator at Shenzi and holds a 44 percent interest in the field. Amerada Hess (NYSE: AHC) and BP each hold 28 percent interest. Shenzi-2 is located approximately two miles southwest of the discovery well Shenzi-1, which encountered a gross hydrocarbon column of 465 feet with 140 feet of net pay.

BHP Billiton's exploration and development portfolio in the Gulf of Mexico includes the development of the Mad Dog (BHP Billiton share 23.9%) and Atlantis (BHP Billiton share 44%) fields that are due to start production in 2005 and 2006 respectively, and a full appraisal programme on its operated discoveries at Neptune, Vortex, Cascade, and Chinook. BHP Billiton is among the top leaseholders in the deepwater Gulf with interests in more than 400 blocks.

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