Devon and ChevronTexaco Form Deepwater Joint Venture

Devon Energy has entered into an agreement to jointly participate with ChevronTexaco in a deepwater exploration program in the Gulf of Mexico. Under the terms of the agreement, Devon will participate in a four-well drilling program on a promoted basis. In exchange, Devon will earn a 25 percent working interest in 71 ChevronTexaco deepwater blocks. To date, 14 exploratory prospects have been identified on the joint-venture acreage.

The first well in the program, the Sierra prospect located in Atwater Valley block 187, is now drilling. Sierra is a sub-salt test with a target depth of 26,000 feet. The well, operated by ChevronTexaco, is utilizing the Transocean Discoverer Deep Seas drill ship.

The second well could be drilled as soon as the fourth quarter of 2002. The two remaining commitment wells are planned for 2003. The companies expect to drill additional prospects on the joint-venture acreage in subsequent years.

Each of the 14 prospects is located in one of Devon's deepwater focus areas: the Miocene Trend in Mississippi Canyon and Atwater Valley, the Western Fold Belt in Alaminos Canyon or the Walker Ridge Fold Belt. The Western Fold Belt in Alaminos Canyon is near a recent industry discovery at Trident. The Walker Ridge Fold Belt is on trend with Devon's recent Cascade discovery.

"This joint venture supplements our existing deepwater acreage, giving Devon a significant inventory of high-potential exploration prospects," said J. Michael Lacey, Devon's senior vice president - exploration and production. "It also fits our exploration strategy of partnering with proven deepwater operators and spreading our risks over a number of quality prospects."