Kerr-McGee Takes 63 Tracts at Gulf of Mexico Lease Sale

Kerr-McGee Oil & Gas Corp. and partners were the high bidders on 63 blocks, of which 30 are in deepwater, in the Central Gulf of Mexico Lease Sale 185. The company's net total exposure for all high bids was approximately $28 million. Kerr-McGee led the industry in both number of bids submitted, 69, and number of high bids, 63. The bids are subject to approval by the U.S. Interior Department's Minerals Management Service. Kerr-McGee will be designated operator of at least 70% of the high-bid blocks with an average working interest of about 78%.

"Our multi-year strategic plan focuses on growth through exploration success in the Gulf of Mexico, in particular in deep water, where our expertise and extensive acreage inventory give us a competitive edge," said David A. Hager, Kerr-McGee senior vice president of exploration and production. "This new acreage will provide additional deepwater and shelf opportunities for continuous highgrading of our drilling prospects."

Kerr-McGee maintains its position as the largest independent and fifth-largest industry leaseholder in the Gulf of Mexico and the largest independent producer and leaseholder in the deepwater gulf. Including these blocks, Kerr-McGee will hold interests in 698 leases in the Gulf of Mexico and will operate more than 71% of these leases with an average working interest of 56%. Award of the 63 high-bid blocks would increase the company's total leaseholdings in the gulf by about 332,000 gross acres to more than 3.1 million gross undeveloped acres.