Conoco Announces Success in the North Sea

Conoco announced that two appraisal wells drilled in the U.K. central North Sea have confirmed discoveries which when developed could yield estimated gross reserves of more than 100 million barrels of oil equivalent.

The company is now evaluating the discoveries, one consisting mainly of crude oil and the other of natural gas, with the intention of aggressive development leading to production in late 2003 or early 2004.

The development will add significantly to Conoco's existing holdings in the strategically important area around the Britannia gas condensate field, the largest in the U.K., in which the company already has the majority equity interest of 51 percent.

"The Greater Britannia area of the North Sea is very important to our portfolio," said Steve Theede, president of Conoco exploration production - Europe. "As a long-time partner and owner in the adjacent Britannia and Alba fields, we know the area well. These discoveries add yet more value to a Conoco core area, which we enhanced earlier this year by purchasing Saga UK Limited."

The oil discovery, known currently as Kappa, also has a small natural gas cap. The find was made in block 15/29b and extends into block 21/4a-North. It is located 125 miles northeast of Aberdeen. Kappa lies only 16 miles from the Britannia production platform and 13 miles from the Chevron-operated Alba oil field in which Conoco holds the largest equity interest of 23 percent.

Kappa was discovered late in 1999 and confirmed in November 2000 by appraisal well 15/29b-13 which was drilled by Noble Drilling's semisubmersible, Noble Ton Van Langeveld. The well encountered 135 feet of hydrocarbons. A 25-foot interval of reservoir was perforated for test purposes and the well flowed at a restricted rate of 1,400 barrels of oil per day through a 24/64-inch choke. The reservoir quality is good, and it is expected that each Kappa production well could deliver up to 20,000 barrels of oil per day.

The natural gas discovery, which was made in 1985 in block 21/3a, lies 26 miles from Britannia and 23 miles from Alba. It was confirmed this year by the 21/3a-7 appraisal well, which encountered a 120-foot gas column. A drill stem test, carried out over an 87-foot interval, flowed at a rate of 20 million cubic feet of gas per day through a 44/64-inch choke.

It is expected that, once developed, the field will have a peak production rate of between 100 million and 200 million standard cubic feet of natural gas per day.

Conoco has 80 percent of 15/29b and 86 percent of 21/4a-North. It holds 75 percent of block 21/3a and is operator in both instances. Chevron U.K. Limited is the sole co-venturer in both licences.

In making the Kappa discovery, Conoco used advanced geophysical techniques to create seismic images and drilled what the U.K. petroleum industry is calling a finder well, which is designed to confirm the presence of hydrocarbons at a minimum cost.