Kerr-McGee Expects $510 Million from Divestment of Select US Onshore Assets

Kerr-McGee has entered into sales agreements with multiple parties as it proceeds with its previously announced divestiture program of select U.S. onshore oil and natural gas properties. Kerr-McGee expects to receive gross proceeds aggregating approximately $510 million under the agreements including estimated proceeds from the November auction of minor- value properties, cash received in a recently closed property trade and the previously announced sales agreement with Encore Acquisition Company. The transactions are subject to customary closing conditions and are expected to close by year end. Kerr-McGee expects to receive net after-tax cash proceeds of approximately $330 million.

Properties included in this divestiture program are noncore assets located in Texas, Oklahoma, Louisiana, Colorado and Wyoming. Kerr-McGee estimates proved reserves associated with the divestitures are approximately 48 million barrels of oil equivalent (BOE), of which approximately 50% are undeveloped, and production from the divestiture properties currently approximates 8,000 BOE per day. There are approximately 2,300 wells and 100 fields included in this program, which is part of the company's effort to high grade its oil and natural gas portfolio by divesting selected lower-growth properties.