Treasure Bay **
Petrobras Also to Participate in Blackbeard West Prospect
HOUSTON, April 28 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) announced today that Petroleo Brasileiro S.A. (PETROBRAS), through its subsidiary Petrobras America Inc., had entered into a letter of intent to participate in Newfield's ultra-deep Treasure Bay Project. Under the letter of intent, Petrobras will drill one firm exploration well and has the option to drill a second exploration well to earn an interest in all of Newfield's Treasure Bay leases. Treasure Bay is an "ultra-deep" exploration concept to explore for oil and gas in the shallow waters of the Gulf of Mexico.
Under the terms of the letter of intent, Petrobras will acquire a 30% working interest in the Treasure Bay Project area. BHP Billiton serves as operator with a 44% working interest and Newfield retains a 26% working interest. Substantially all of Newfield's interest in the initial well, and the option well if drilled, will be non-cost bearing. Initial drilling to test prospects in the Treasure Bay area is expected in 2005. Newfield and BHP Billiton Petroleum (Deepwater) Inc. jointly own 60 lease blocks associated with the Treasure Bay project. The Treasure Island Royalty Trust does not hold any interests in the Treasure Bay area.
In addition, Petrobras also will participate in the drilling of the Blackbeard West Prospect. As announced last week, Exxon Mobil Corporation, with BP Exploration and Production Inc. and Petrobras America Inc. holding interests, will operate the Blackbeard West Prospect. Petrobras' participation was previously announced as an "undisclosed third party," pending the recent approval from its board of directors. Under the terms of the letters of intent, the well will spud no later than January 31, 2005. The well is being designed to test prospective objectives that range from 27,000 feet to more than 30,000 feet. The prospect covers multiple blocks in the South Timbalier and Ship Shoal regions offshore Louisiana. Newfield will be carried for a 23% working interest in the Blackbeard West Prospect to the objective depth, subject to certain limitations. The Blackbeard West Prospect is subject to a 1.25% overriding royalty interest held by the Treasure Island Royalty Trust.
Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy that includes balancing acquisitions with drill bit opportunities. Areas of operation include the Gulf of Mexico, the onshore U.S. Gulf Coast, the Anadarko and Arkoma Basins and select international ventures.
**Certain of the statements set forth in this release regarding the drilling of exploration wells and their timing are based upon assumptions and anticipated results that are subject to numerous uncertainties. In addition, the drilling of oil and gas wells and the production of hydrocarbons are subject to governmental regulations and operating risks. Please refer to a more complete discussion of risks associated with drilling ultra-deep wells and other factors set forth in Newfield's Annual Report on Form 10-K for the year ended December 31, 2003.
Newfield Exploration Company For information, contact: 363 N. Sam Houston Parkway East, Ste. 2020 Steve Campbell Houston, TX 77060 (281) 847-6081 www.newfld.com email@example.com
SOURCE Newfield Exploration Company