Conoco To Develop Deepwater Magnolia Field

Conoco, in partnership with Ocean Energy Inc., will develop the Magnolia Field in nearly 4,700 feet of water in the Gulf of Mexico. Initial estimates call for the $600 million deepwater development project, located in Garden Banks blocks 783 and 784, to deliver 150 million barrels of oil equivalent (MMBOE). Conoco, as operator, holds a 75-percent working interest in the field with Ocean owning the remaining 25-percent.

The Magnolia Field was discovered with the first well drilled by Transocean Sedco Forex's drill ship, Deepwater Pathfinder in May 1999, and two further appraisal wells confirmed the field's commerciality. All previously drilled wells will be converted to production wells as part of the eight wells required to bring the Magnolia Field into full production.

A platform capable of supporting a completion rig will be installed during the summer of 2004, some 180 miles south of Cameron, La. The location of the Magnolia facilities, approximately 30 miles from existing infrastructure, will enable Magnolia to be a regional off-take point for future Conoco-operated developments or third party tie-ins located in Southeastern Garden Banks. Commercial negotiations are underway to determine whether a Tension Leg Platform (TLP) or a Spar will be utilized, and to determine the off-take provider and route.

The design capacity of the production facilities will be 50,000 barrels of oil per day and 150 million standard cubic feet of gas per day. First production from the field is anticipated in the fourth quarter of 2004, with peak production occurring in 2005.

"The Magnolia facilities will strategically position Conoco by providing early infrastructure in a very active part of the deepwater Gulf of Mexico to handle the tie-in of future production," said Rob McKee, Conoco's executive vice president, exploration and production. "The deepwater Gulf is one of the foundations for Conoco's growth in North America, and the rapid development of fields such as Magnolia supports that growth strategy."

"This development project represents another successful milestone in Ocean's Gulf of Mexico deepwater program, and our partnership with Conoco continues to produce sound and profitable technical and commercial results," said James T. Hackett, Ocean Energy chairman, president and chief executive officer.