Conoco proceeds with Magnolia development

Conoco Inc. will proceed with development of the Magnolia Field in the Gulf of Mexico at an estimated cost of USD 600 million. If all goes well, the deepwater development project on Garden Banks blocks 783 and 784, some 180 miles south of Cameron, Louisiana, will begin to deliver oil and natural gas in the fourth quarter of 2004, 5½ years after its discovery. Conoco, as operator, holds a 75% working interest in the field, which is in water nearly 4700 feet deep. Ocean Energy Inc. owns the remaining 25%. Conoco said it expects to instal a production platform during the summer of 2004. It also said the location, about 30 miles from existing pipelines and production facilities, will enable Magnolia to be a regional off-take point for future Conoco-operated developments or third-party tie-ins located in SE Garden Banks. Daily production is expected to reach the design rate of 50,000 barrels of oil and 150 million standard cubic feet of gas in 2005. Magnolia Field oil and gas reserves are estimated at the equivalent to 150 million barrels.

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