Texaco Announces Gulf of Mexico Discoveries

Texaco announced three discoveries in the Gulf of Mexico and Louisiana Gulf Coast; the North Tern Deep prospect in the Gulf of Mexico's Eugene Island Block 193, and the Bay St. Elaine and Vermilion Bay fields in coastal Louisiana.

These discoveries are part of Texaco's Gulf of Mexico shelf exploration program and follow the December 11th announcement of a discovery at its Cyrus prospect in the Gulf of Mexico. The Cyrus prospect is located approximately 300 miles southwest of New Orleans in High Island Block A-582.

Commenting on the discoveries, Robert Lane, vice president of Texaco's New Orleans Business Unit, said, "These wells strengthen our position in the Gulf of Mexico and South Louisiana. All three of these discoveries are located in shallow water, close to existing infrastructure with access to natural gas markets. It is expected that these three discoveries will add 5,000 barrels of oil equivalent production per day."

Texaco holds a 43.75 percent working interest in the Eugene Island 193 No. 3 North Tern Deep prospect operated by McMoRan Exploration Co. Located 50 miles off the Louisiana coast in 90 feet of water, the North Tern Deep exploration well has strong natural gas reserve potential. Two productive sands were encountered in the initial discovery well with approximately 200 feet of total pay. The well is expected to be put on production in the second quarter of this year. Texaco and McMoRan plan to drill additional exploratory wells across the shelf and flexture trend of the Gulf of Mexico as part of the Offshore Exploration Agreement signed by the two companies in January of 2000.

Texaco's Oscar prospect is located in the Bay St. Elaine field in Terrebone Parish. This on-structure wildcat has evaluated prolific producing sands of Upper Miocene age on the northwest flank. The well encountered two oil sands and two gas sands with another three potentially gas productive sands being evaluated. During the life of the field, other sands have produced over 400 billion cubic feet of gas and 15 million barrels of oil, respectively. Texaco is operator with 50 percent working interest and Burlington Resources has the remaining 50 percent working interest.

In Vermilion Bay field, the State Lease 334 B No. 110 on-structure wildcat well encountered three Lower Miocene oil reservoir sands with a total of 200 net feet of pay. Located 110 miles southwest of New Orleans, the well was drilled in the northeast portion of the field extending the southern trend and providing additional development opportunities. The southern portion of the field has sands that have cumulative production of approximately 5 million barrels of oil equivalent. The well is currently producing 1,000 barrels of oil and 547 thousand cubic feet of gas per day. Texaco is operator and holds a 100 percent working interest.