Kerr-McGee Begins Production at Deepwater Constitution Field

Kerr-McGee reports that its 100%-owned Constitution field in the deepwater Gulf of Mexico achieved initial production on March 27, from the field's first dry-tree well. The Constitution field, located in Green Canyon blocks 679 and 680 in approximately 5,000 feet of water, is being developed with six dry-tree wells, which are processed through the Constitution truss spar floating production facility located in Green Canyon block 680. The initial well is expected to ramp up to a production rate of approximately 15,000 barrels of oil per day (b/d) and 12 million cubic feet of natural gas per day (MMcf/d) by Friday.

"The efficient development of this deepwater field is a tremendous achievement by our employees and contractors," said David A. Hager, Kerr-McGee chief operating officer. "The project team was able to bring production on stream safely, cost-effectively and ahead of schedule, maintaining the momentum gained with early startup of the nearby Ticonderoga field. What makes this even more extraordinary is the fact that it was accomplished in an environment that had strong loop currents and the most active hurricane season ever recorded."

The Constitution field has estimated resources of approximately 110 million barrels of oil equivalent. The company expects to reach peak production volumes of approximately 40,000 b/d and 75 MMcf/d from all six dry- tree wells by year-end 2006.

The Constitution truss spar was expanded during fabrication to accommodate the additional production from the nearby Ticonderoga field, which was discovered after Constitution was sanctioned. The spar currently has processing capacity of 70,000 b/d and 200 MMcf/d. Kerr-McGee started production from two subsea wells in the Ticonderoga field in February 2006. Ticonderoga currently is producing at a peak rate of approximately 22,000 b/d and 19 MMcf/d. Kerr-McGee is the operator of the Ticonderoga field with a 50% working interest. Noble Energy owns the remaining 50% working interest.

"The Constitution and Ticonderoga fields add significant volumes to our overall production portfolio," added Hager. "As a result of Constitution and two other major deepwater developments that currently are under construction at Independence Hub and Blind Faith, we have identified double-digit volume growth over the next few years from the deepwater Gulf of Mexico."

Kerr-McGee has interests in three subsea developments that will be tied into the Independence Hub facility, to be installed in the Atwater Valley area of the eastern gulf with first production expected in mid-2007. The company also holds a 37.5% working interest in the Blind Faith development located on Mississippi Canyon blocks 695 and 696. First production from Blind Faith is anticipated in mid-2008.

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