Kerr-McGee Brings Two North Sea Fields On Stream

Kerr-McGee has successfully commenced production from the Tullich and Maclure fields utilizing the company's existing infrastructure in quadrant 9 in the United Kingdom sector of the North Sea. Both fields were developed as subsea tiebacks to the Kerr-McGee-operated Gryphon 'A' floating production, storage and offloading (FPSO) facility.

The Tullich field, 100%-owned and operated by Kerr-McGee, achieved first production Aug. 28 and is currently producing at a rate of about 7,500 barrels of oil per day (b/d) from two wells. Production from Tullich, located in block 9/23a, is expected to peak at approximately 15,000 b/d from four wells in the first quarter of 2003. The third development well for the field has been completed and is awaiting final hookup, and a fourth well is currently drilling.

The Maclure field (Kerr-McGee 33.33% interest) came on stream as a tieback to Gryphon in July. The BP-operated Maclure field in block 9/19 is currently producing through a single well at approximately 12,000 b/d.

In addition to the Maclure and Tullich tiebacks to Gryphon, Kerr-McGee installed a new gas pipeline system linking the Gryphon (Kerr-McGee 61.50%), Tullich (Kerr-McGee 100%) and Maclure (Kerr-McGee 33.33%) fields to the SAGE gas export system at the Beryl Alpha platform operated by Mobil North Sea. This pipeline system allows for the export of additional gas from these fields to the U.K. market and also supplies fuel gas to Leadon.

"Tullich, Maclure and the new pipeline system enhance our quadrant 9 operations and optimize our investment in the Gryphon area," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "The Gryphon and Leadon FPSOs provide key infrastructure for future developments in this highly prospective area. I commend our Aberdeen-based project team for their success and commitment to completing these developments safely, on time and within budget."

Commenting on the start-up of production from these two fields, Brian Wilson, United Kingdom Energy Minister, said, "This is the culmination of a key infrastructure project which also involves enhanced capabilities on the Gryphon floating production facility. This combined project is an excellent example of UK Operators maximizing the value of existing assets and bringing forward undeveloped discoveries to production. These fields also fall within the UK-Norway co-operation corridor as highlighted in the recent UK-Norway North Sea Co-operation report which I launched at Offshore Northern Seas Conference on August 28th. Although not co-operation projects themselves, they demonstrate that the new value is there to be tapped from other prospects in this promising zone."

Other Kerr-McGee assets in Quadrant 9 include Skene (33.33% interest), Buckland (33.33%), Harding (25%) and various exploration licenses.

In addition to Kerr-McGee, partners in Maclure are BP (operator, with 33.33%); Mobil North Sea Limited (16.67%); Enterprise Oil plc, acquired in 2002 by the Royal Dutch Shell group (7.59%); Amerada Hess Limited (7.41%); and OMV (U.K.) Limited (1.67%).

Partners in the Kerr-McGee-operated Gryphon FPSO are Conoco (U.K.) Limited (25.00%); Cairn Energy PLC (10.00%); and Oranje-Nassau (U.K.) Limited (3.50%).