press release

Chevron Press Release - Chevron Discovers Promising New Natural Gas Trend In U.S. Gulf

Gas trend map in Gulf

NEW ORLEANS, April 22, 1998 -- Chevron U.S.A. Production Co., a unit of Chevron Corp., today announced the discovery of a significant new natural gas trend offshore Mississippi in the Gulf of Mexico.

The Viosca Knoll Carbonate Trend is exciting and unique to the Gulf of Mexico -- in part because of its size, and in part because exploratory drilling has discovered the first offshore natural gas reserves to originate from Lower Cretaceous reservoirs. These particular geologic aged reservoirs have never before produced in the U.S. Gulf, however, they have been highly productive onshore in Texas, Louisiana and in Mexico.

Peter Robertson, president of Chevron U.S.A. Production Co., explained that the significance of this lies in the probability that there are additional, yet-undiscovered reserves of Lower Cretaceous natural gas in the area.

"We are extremely pleased to have discovered this exciting new trend on the mature shelf, and are tremendously optimistic about its upside potential," said the Chevron executive, who suggested that reserves in Viosca Knoll could measure in excess of one trillion cubic feet of natural gas for Chevron. Robertson said that Chevron will continue exploration and development activities in the area in 1998 and 1999 to better determine and fully exploit the reserve potential of the Carbonate Trend.

"Chevron is batting a thousand in this area of the Gulf," said Robertson, who noted that in the past 18 months the company has made four successive discoveries in the four wildcat exploratory wells it has drilled. Robertson pointed out that through its discoveries over the past four years, Chevron has compiled the largest contiguous leasehold by any single company in the shallow waters of the U.S. Gulf.

Since 1994, Chevron has made five "new field" discoveries -- four within the past 18 months -- in the Carbonate trend: one in Mobile Block 991, and the remainder at Viosca Knoll in Blocks 68, 114, 251, and 252. Combined, these five discoveries have recoverable reserve potential of over 600 billion cubic feet (gross trend) of natural gas.

The wildcat discovery wells have encountered intervals of natural gas ranging in thickness between 35 and 115 feet, at depths of approximately 15,000 feet, from Lower Cretaceous reservoirs in the James Formation. The wells are located approximately 25 miles south of Pascagoula, Miss., in water approximately 120 feet deep.

The Viosca Knoll Block 68 discovery well, drilled in June 1997, will be the first of the five discovery wells to begin production, and is expected to be brought onstream in early May.

Viosca Knoll is contiguous to and lies due south of the giant Norphlet natural gas trend, which is also operated in part by Chevron and estimated to contain nine trillion cubic feet of natural gas. Due to its proximity to Norphlet and other offshore production, natural gas from Viosca Knoll could be tied into existing infrastructure, an highly positive economic feature of producing from the new trend.

The discovery well on Mobile Block 991 will be brought onto production in June. Two of the other Viosca Knoll discovery wells (Blocks 114 and 251) will be tested later this year.

Chevron is operator and holds the dominant working interest in 71 leases (350,000 gross acres) in the Carbonate Trend, extending from Northwest to Southeast, with five additional leases yet to be awarded from the March 18, 1998, Federal OCS lease sale. In more than half the leases, Chevron holds a 100 percent working interest; in the remaining leases, the company holds working interests ranging from 50 percent to 80 percent, primarily in partnership with Samedan Oil Corp., a subsidiary of Noble Affiliates, Inc., headquartered in Ardmore, Okla.

Updated: April 1998