Kerr-McGee Announces 2002 Capital Budget
Kerr-McGee Corp. is budgeting $170 million in exploration expense and $890 million for capital expenditures for 2002. The capital expenditures include the development of its 100%-owned Tullich field in the U.K. Sector of the North Sea, which was sanctioned by its Board of Directors.
The capital budget for exploration and production in 2002 is $780 million. Of this amount, $310 million is allocated to the North Sea, $280 million to the Gulf of Mexico, $125 million to U.S. onshore and $65 million to other international projects. The company is also budgeting $170 million for worldwide exploration expense, which is expected to fund the drilling of 20 to30 exploratory wells, including 10 to 15 in the deepwater Gulf of Mexico.
"We will be completing four major development projects that were started last year, Leadon, Skene, Nansen and Boomvang," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "The success of our exploration and appraisal program has resulted in two new developments for this year -- Gunnison, in the Gulf of Mexico, and Tullich, in the U.K. sector of the North Sea. We believe our drilling expertise and large inventory of worldwide drillable prospects will bring continued exploration success and new developments in the coming years."
Kerr-McGee's two new developments, Gunnison and Tullich, are scheduled to come online in early 2004 and fourth quarter 2002, respectively.
Kerr-McGee's Tullich field is being developed as a four-well horizontal subsea tie-back to the company-operated Gryphon 'A' facility. In 370 feet of water, the Tullich field is located approximately 3 miles southeast of Gryphon in Quadrant 9. The company estimates reserves at Tullich to be approximately 40 million barrels of oil equivalent. Peak production is estimated at 24,000 barrels of oil equivalent per day, with production beginning in the fourth quarter of 2002. The development is subject to approval by the U.K. Department of Trade and Industry.
Capital expenditures for chemical operations are budgeted at $90 million in 2002. Corporate capital expenditures will utilize the remaining $20 million. "The capital expenditures for our chemical business will allow us to enhance the cost-effectiveness of these operations and maximize their earnings as we continue to grow this business," Corbett said.