Kerr-McGee Strikes Twice in Bohai Bay

Kerr-McGee Corp. continues a successful exploratory program on Block 04/36 in Bohai Bay. The company-operated CFD 11-3-1 and CFD 16-1-1 exploratory wells each encountered hydrocarbons. CFD 11-3-1, located in 90 feet of water just 10 kilometers north of the company's CFD 11-2 field, encountered 32-38 degree API hydrocarbons in the Guantao sandstone interval. CFD 16-1-1, located in 74 feet of water, 15 kilometers southwest of the CFD 11-1 field, encountered 16-21 degree API hydrocarbons in the Minghuazhen and Dongying reservoir.

"We are encouraged by the initial results from these wells," said Kenneth Crouch, Kerr-McGee senior vice president, responsible for oil and gas operations. "We expect to begin appraisal drilling to evaluate potential commerciality later this year."

In May, Kerr-McGee sanctioned development of its CFD 11-1, CFD 11-2 and CFD 2-1 fields in Block 04/36 using a centrally located floating production, storage and offloading facility. Kerr-McGee operates Block 04/36 with an 81.8% foreign contractor's interest. The remaining interest is held by Sino- American Energy Corp., a wholly owned subsidiary of Ultra Petroleum.