EEX Agrees To Transfer Operatorship of Llano Field

EEX Corporation and the other owners of the Llano Field have agreed on the next operations, subject to Minerals Management Service (MMS) approval. Enterprise Oil will be named as the operator for Garden Banks Blocks 385 and 386, with full operational responsibility for the Llano Field located in the deep water Gulf of Mexico. EEX will remain as operator for Garden Banks Blocks 344, 387, 388 and the western half of Block 345, where the Jason discovery and the Travis and Devil's Island prospects are located.

The Llano owners have submitted an application to the MMS for approval to add Garden Banks Block 385 to the existing unit of Blocks 344, 386, 387 and 388. If the MMS approves the application, Enterprise Oil intends to begin drilling the next Llano appraisal well, the Garden Banks Block 385 No. 1, with the semisubmersible drilling rig, Glomar Arctic I, in early June.

Furthermore, the Llano owners have agreed to normalize their interests over Blocks 385 and 386. EEX and Enterprise Oil will each hold a 27.5% interest, and PanCanadian Gulf of Mexico Inc. and ExxonMobil will each hold a 22.5% interest in these two blocks. This normalization will be subject to possible re-determination at a later date based upon reservoir information obtained in the future. Previously EEX held a 30% interest on Block 386 and a 25% interest on Block 385. EEX will fund future spending at a 25% working interest until equalization of previously invested costs is reached among all partners.

"These actions by the Llano owners are the next steps in reaching our goal of an agreed development plan at Llano, while maintaining EEX's plans for the Jason discovery and Travis prospect," said Tom Hamilton, chairman and president, chief executive officer.