Kerr-McGee Bids High on Four Deepwater Leases

Kerr-McGee and partners were high bidders on four deepwater leases in today's Central Planning Area Gulf of Mexico lease sale 198.

Kerr-McGee's net total exposure for all deepwater high bids is approximately $8.2 million. The bids are subject to approval by the US Interior Department's Minerals Management Service. Kerr-McGee currently is designated operator of all of the high-bid leases, with an average working interest of approximately 50 percent.

"These leases provide additional opportunities in our core area in the deepwater Gulf of Mexico," said David A. Hager, Kerr-McGee chief operating officer. "They also add to our growing inventory of sub-salt nonamplitude prospects and enhance our overall portfolio in deepwater, which is spread across multiple trends including the Miocene and Eocene."

With the new leases, Kerr-McGee will hold interests in 516 leases in the deepwater Gulf of Mexico and will operate more than 76 percent of these leases with an average working interest of 57 percent. Award of the four high-bid leases would increase the company's total undeveloped lease holdings in the deepwater Gulf by approximately 23,040 gross acres to nearly 2.75 million.

Kerr-McGee also was high bidder on one lease on the Gulf of Mexico shelf. This lease will be included in the company's sales agreement with W&T Offshore, which is expected to close in the second quarter of 2006.

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