Shell, Ocean Energy form Gulf of Mexico alliance

Shell Offshore Inc. and Ocean Energy Inc., Baton Rouge, La., have signed a third Gulf of Mexico exploration alliance. The new alliance, called Gulf of Mexico Exploration Alliance, follows two agreements already signed by the firms: Delta Exploratory Joint Venture and South Pass Alliance. Under the newest alliance, the companies initially will drill 25 prospects, all delineated by 3D seismic. The prospects are in 141,000 gross acres in the Gulf of Mexico.

March 16, 1998

Shell Offshore Inc. and Ocean Energy Inc., Baton Rouge, La., have signed a third Gulf of Mexico exploration alliance.

The new alliance, called Gulf of Mexico Exploration Alliance, follows two agreements already signed by the firms: Delta Exploratory Joint Venture and South Pass Alliance.

Under the newest alliance, the companies initially will drill 25 prospects, all delineated by 3D seismic. The prospects are in 141,000 gross acres in the Gulf of Mexico.

Under the terms of the agreement, Ocean Energy will hold 25% of Shell Offshore's working interest in 25 prospects on the OCS and in state waters off Louisiana and Texas. Water depths range to 1,300 ft.

The firms will coordinate their rig fleets to increase efficiency and gain economies of scale. They will drill more than 50 exploratory wells in the next 3 years through the three alliances.

Ocean Energy's share of expenditures for the new alliance will be met out of its announced 1998 capital budget.