Kerr-McGee Success in Alaska Continues

Kerr-McGee announced the successful test of the Schrader Bluff reservoir at its Nikaitchuq #4 horizontal appraisal well on Alaska's North Slope. The well tested at rates of up to 1,200 barrels of oil per day during periods of the initial test. The oil tested at 16 to 17 degrees API. Kerr-McGee operates Nikaitchuq with a 70% working interest. Armstrong Alaska, Inc. holds the remaining 30%.

In addition, the company said it has encountered the same Schrader Bluff interval approximately three miles to the west of the Nikaitchuq #4 appraisal well at its Tuvaaq exploration well. Based on the results, the company is drilling a sidetrack, the Kigun well, to earn additional acreage. Kerr-McGee will operate Kigun with a 55% working interest upon completion of the drilling operations. Kerr-McGee also has increased its stake in Tuvaaq by acquiring an additional 40% working interest from Pioneer Natural Resources. As a result of the transaction, Kerr-McGee now holds an 82% working interest in Tuvaaq and is the operator.

"We are encouraged with the results we've seen thus far in Alaska," said Dave Hager, Kerr-McGee senior vice president responsible for oil and gas exploration and production. "Although we still need to complete the appraisal program, based on initial evaluations, it appears the Schrader Bluff interval might be developed throughout much of our 36,000 acres in the Nikaitchuq and Tuvaaq area."

During the 2005 drilling season, Kerr-McGee's Alaska program includes two appraisal wells at Nikaitchuq and the exploration well at the Tuvaaq prospect. The Nikaitchuq #4 horizontal appraisal well tested the Schrader Bluff interval, while the Nikaitchuq #3 horizontal appraisal well currently is being drilled to test the Sag River formation.

In 2004, the company announced successful exploration and appraisal wells on the Nikaitchuq prospect. The Nikaitchuq #1 vertical well tested at rates more than 960 barrels of oil per day of 38 degree API from the Sag River Formation. The Nikaitchuq #2 well was drilled 9,000 feet southeast of the discovery well and successfully extended the accumulation down dip.

Earlier this year, Kerr-McGee announced it had acquired a 50% working interest in the Ataruq prospect onshore Alaska, and is the operator. Kerr-McGee plans to drill the initial exploration well at Ataruq following the Nikaitchuq appraisal drilling.