press release

Chevron Press Release - Chevron Adds 75 Gulf Of Mexico Deepwater Tracts; Expands Project Group

NEW ORLEANS, March 5, 1997 - Chevron today increased its commitment to the Gulf of Mexico's booming "deepwater" oil and gas industry, placing $52 million in high bids on 75 new tracts in a major federal offshore lease auction here.

Bidding in Outer Continental Shelf (OCS) Sale No. 166 for the central gulf, Chevron exposed $69 million on 117 tracts and was high bidder on 75, mostly in waters over 1,000 feet deep. Government acceptance of the bids will take about 120 days.

Chevron's high bids encompassed seven of its top nine exploratory prospects identified by its exploration team. In addition, the sale results are expected to boost Chevron's deepwater lease inventory by 30 percent to a total of 300 tracts (a "prospect" or exploration target can consist of several tracts). The increase underscores a commitment signaled in 1994 and 1995, when Chevron tripled its lease inventory and became one of the five largest lease holders in the deepwater gulf.

Chevron drilled four deepwater exploratory wells last year, and plans to drill up to six this year and up to eight next year. The company in 1996 signed long-term contracts for three deepwater exploratory drilling rigs to test new prospects and drill production wells on existing discoveries.

Chevron is steadily increasing staff for its deepwater project development team, expected to exceed 100 people by the end of 1998. The company also has created a deepwater operations unit to manage future production. Both groups are in New Orleans and are part of Chevron Production Co.

Deepwater developments under way include the previously announced $750 million, 160-million-barrel "Genesis" project. Operated by Chevron, Genesis is located 150 miles off New Orleans in waters half-a-mile deep. Production should start in late 1998 and peak at about 55,000 barrels of oil and 72 million cubic feet of natural gas per day. Chevron holds 56.67 percent.

In addition to Genesis, Chevron is a participant in two other major deepwater projects operated by others.

Updated: March 1997