Kerr-McGee Begins Production at Red Hawk Field

Kerr-McGee reports that the Red Hawk field in the deepwater Gulf of Mexico achieved first production on schedule using the world's first cell spar facility. Red Hawk, Kerr-McGee's deepest development to date located in 5,300 feet of water on Garden Banks 877, started production from the first of its two subsea wells just 24 months after sanctioning. Kerr-McGee operates Red Hawk with a 50% interest. Devon Energy owns the remaining 50% interest.

Production from the field, with an estimated resource base of approximately 250 billion cubic feet of natural gas, is expected to ramp up to a peak of 120 million cubic feet of natural gas per day (MMcf/d) in early August after the second well is placed on production.

"Red Hawk, which is Kerr-McGee's fifth operated deepwater hub in the gulf, is consistent with our strategy of creating hubs in core areas to provide infrastructure for the economic development of future discoveries," said Dave Hager, Kerr-McGee senior vice president responsible for oil and gas exploration and production. "Our core area strategy has proven successful at our deepwater Neptune, Nansen, Boomvang and Gunnison hubs, with satellite discoveries and third-party processing adding significant value to these developments."

The cell spar, a floating production facility, is the third generation of the spar systems, all of which were pioneered by Kerr-McGee. This innovative technology further reduces the reserve threshold for economical development of deepwater fields. Measuring 64 feet in diameter and 560 feet in length, the facility, named the Kerr-McGee Global Producer IX, can be expanded to a production capacity of 300 MMcf/d. The design features six tubes surrounding a seventh tube, each 20 feet in diameter and connected by structural steel.

"I commend our employees, our partner, contractors and vendors for achieving first production using a new technology on schedule, just 24 months after project sanction," said Hager.

Kerr-McGee holds interests in more than 18 blocks in the Red Hawk area. The company may potentially drill an additional well in the Red Hawk field and explore nearby satellite opportunities, which could be subsea tiebacks to the cell spar.

In the deepwater gulf, Kerr-McGee also is developing the Constitution and Ticonderoga fields, with first production from Constitution expected in mid-2006. Constitution, operated by Kerr-McGee with 100% interest, is being developed using a truss spar facility with capacity to process approximately 70,000 barrels of oil per day. Ticonderoga, also operated by Kerr-McGee with a 50% interest, will be developed as a subsea tieback to Constitution.