BHP Billiton to Develop Neptune Field In Gulf of Mexico

BHP Billiton has approved the capital expenditure for its 35 percent share of the costs to develop the Neptune oil and gas field in the Gulf of Mexico. The Neptune facility will have a design capacity to produce up to 50,000 barrels of oil and 50 million cubic feet of gas per day with gross costs for the development estimated at approximately US$850 million (BHP Billiton share approximately US$300 million).

The Neptune field is located in the deepwater GoM approximately 120 miles from the coast of Louisiana. The field comprises Atwater Blocks 573, 574, 575, 617, and 618, and water depths here range from 4,200 feet to 6,500 feet. The production facility will be located in approximately 4,250 feet of water.

"Neptune will be our first operated, deepwater standalone facility in the GoM and represents a significant milestone towards building a core business in that region," explained Philip Aiken, Group President of Energy for BHP Billiton. "This project will add to our expanding portfolio of producing assets in the Gulf of Mexico. With Mad Dog, which came onstream this year; Atlantis, which will start up in 2006, and now Neptune, BHP Billiton's net production from the Gulf of Mexico will exceed 100,000 barrels of oil equivalent (boe) per day by the end of 2007."

Recoverable reserves at the Neptune field are estimated by the Company in a range from 100 to 150 million boe. A standalone, tension leg platform (TLP) has been selected for the development. The proposed facilities, wells, and completions are proven designs that have been successfully implemented in the deepwater GoM.

First oil is expected by the end of calendar year 2007 with seven initial subsea wells tying back to the TLP. The wells, subsea systems, flowlines, floating systems, topsides and risers will be designed, procured, fabricated and operated by BHP Billiton on behalf of the Neptune joint venture partners. The oil and gas will be exported to shore via the existing Caesar and Cleopatra trunk lines.

BHP Billiton is the designated operator of the field with the other partners being Marathon Oil Corp. (30 percent), Woodside Energy (USA) Inc., a subsidiary of Woodside Petroleum Ltd. (20 percent); and Maxus (US) Exploration, a subsidiary of Repsol YPF (15 percent).