AEC joins Conoco in deepwater Gulf of Mexico exploration

Oct. 18, 2001
Conoco Inc. has signed a deepwater Gulf of Mexico exploration joint venture agreement with AEC Gulf of Mexico Inc. The agreement overlaps with some prospects included in a similar September agreement with Norsk Hydro USA Oil & Gas Inc. Conoco said the joint ventures are part of a strategic development plan.

By the OGJ Online Staff

HOUSTON, Oct. 18 -- Conoco Inc. has signed a deepwater Gulf of Mexico exploration joint venture agreement with AEC Gulf of Mexico Inc.

The agreement overlaps with some prospects included in a similar September agreement with Norsk Hydro USA Oil & Gas Inc. (OGJ Online, Sept. 5, 2001). Conoco said the joint ventures are part of a strategic development plan.

AEC is a subsidiary of Alberta Energy Co. Ltd., Calgary. It agreed to participate, with 12.5-15% interest, in four exploration wells to earn an interest in 26 leases held by Conoco. AEC also has the right to participate in six potential wells in 35 other leases, with working interests of 12.5-25%, and in one shallow-water prospect at a 50% working interest. That prospect covers two leases in 240 ft of water.

With the September agreement, Norsk Hydro acquired a 25% working interest in five firm and three contingent exploration wells covering 55 leases held by Conoco. Norsk Hydro has the option through 2005 to participate in wells on other prospects in Conoco's inventory, with working interests ranging from 12.5% to 25%.

Gary Merriman, president of Conoco's US and South America exploration and production unit, said, "Our strategy upon entering the deepwater Gulf of Mexico in 1996 was to acquire large prospective acreage positions at high working interest levels and bring in partners with terms deemed favorable to Conoco. We have now secured both our target working interest and cost interest levels in all exploration prospects included in these two agreements. "

Conoco will remain operator of all the prospects it currently operates, retaining working interests that range from 25% to 60%.