Kerr-McGee Boosts Reserves
|Tuesday, January 22, 2002
Kerr-McGee Corp. has replaced 490% of its 2001 worldwide production of 108 million barrels of oil equivalent (BOE) at an average finding, development and acquisition cost of $5.73 per BOE. Worldwide additions of proved oil and natural gas reserves, net of property sales, totaled 529 million BOE in 2001, resulting in an approximate 40% increase in reserves to 1.5 billion BOE at year-end 2001. "Our exploration and appraisal program recorded another year of outstanding success, adding 314 million BOE resulting in replacement of nearly 300% of our 2001 production from the drill bit alone," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "This success combined with the strategic addition of U.S. natural gas reserves through the acquisition of HS Resources, has resulted in our reserves per common share increasing more than 30% from year-end 2000, to 15.1 BOE per share." Reserve additions from the drill bit came primarily from the continued success of the company's deepwater program, accounting for approximately 44% of the total. The North Sea accounted for approximately 26% of the additions, primarily related to discoveries in the company's core Quadrant 9 area of focus. Nearly 22% of the additions came from U.S. onshore properties, including new discoveries in the Denver-Julesburg basin. Year-end 2001 reserves of 1.5 billion BOE were made up of 56% crude oil and liquids and 44% natural gas. Fifty-four percent of reserves were located in the United States and 31% in the United Kingdom sector of the North Sea. "We continue to follow our long-term strategy of developing core areas where we have the expertise and technological advantages for further success," Corbett added. "In addition to our 2001 drilling success, we also increased our worldwide gross undeveloped acreage by 50% in high-potential trends of the Atlantic Margin. This large inventory position allows us to continuously high-grade our drilling activities and grow our reserves at competitive finding costs." In 2002, Kerr-McGee has budgeted $170 million for exploration expense to drill approximately 20 to 30 exploratory wells, including 10 to 15 in the deepwater Gulf of Mexico.