Texaco Announces Discovery

Texaco has announced the discovery of additional oil and gas reserves in High Island Block A-582, located in the Gulf of Mexico, approximately 300 miles southwest of New Orleans.

Named the Cyrus Prospect, the discovery well is situated in 440 feet of water and was drilled by Rowan Companies' jackup, Rowan Midland, to a total depth of 15,147 feet into a faulted structure on the south end of the Block A-582. The discovery is currently being evaluated by the drilling of a second and possibly a third well, and a project team has been formed to further evaluate development of the prospect. Texaco is operator with a 47-percent interest in the discovery. Devon Energy Corporation holds a 37-percent interest, with six other parties holding the remaining ownership interests.

Commenting on the discovery, Robert S. Lane, Texaco's New Orleans Business Unit Vice-President, said, "Cyrus is an excellent example of Texaco people working with Devon and others using state-of-the-art seismic technology to find new resources in a mature area of the Gulf of Mexico. This discovery will have a positive impact on our existing strong portfolio of assets in the Gulf, which is a focus area of our global upstream strategy."

Oil and gas were first discovered in this structure in 1982 near the northern boundary of block HI-582. More than 230 feet of pay was encountered in four sands in the HI A-582 No. 4 well. Productivity of these sands has been established in the area of this discovery through well tests.

While development plans are not yet finalized, this additional discovery is expected to require the installation of a new, Texaco-operated platform. Construction of a new platform would take 12-18 months once the decision has been made to pursue this development plan. First production from a new platform would occur sometime in the second half of 2002.

Cyrus is located on the southern flank of Texaco's Krypton field, which encompasses HI Block A-563, and the northern half of HI Block A-582. Krypton is a prolific field that has cumulative production of 588 billion cubic feet of natural gas and 12.1 million barrels of oil in its 18-year history.