press release

Chevron Press Release - Chevron U.S.A., Arco Alaska Form North Slope Alliance

ANCHORAGE, Alaska, Aug. 5, 1998 -- Chevron U.S.A. Inc. and ARCO Alaska, Inc. announced today the signing of two agreements that will quicken the pace of oil exploration in more than 2.8 million acres on Alaskas North Slope, between the Colville and Canning rivers. The agreements provide for equal ownership of leases recently acquired in Alaska State Lease Sale 87 and other leases on the North Slope of Alaska.

The first agreement provides for joint exploration and appraisal of an approximate 4,000-square-mile area that includes leases acquired by Chevron and ARCO during Lease Sale 87. Under the terms of the agreement, Chevron and ARCO will each own 50 percent interest in 35 tracts representing approximately 200,000 total gross acres located southwest of the existing Kuparuk and new Alpine oil fields. This includes 13 jointly acquired leases, in addition to four tracts purchased by Chevron and 18 tracts acquired by ARCO at the sale. ARCO has been designated as exploration and development operator in the agreement.

A second alignment agreement encompasses the McCovey/Salmon area, which includes 196,000 offshore acres north of the Prudhoe Bay oil field in the Beaufort Sea. Under the agreement, ARCO and Chevron will each have one-half interest in 16 tracts in this area. ARCO has been designated as exploration and development operator for the project.

Were pleased to be investing in Alaska and we enjoyed the opportunity to again bid with ARCO for North Slope leases, Chevron Vice President Espy Price said. We see a lot of technical synergy between Chevron and ARCO.

Were pleased to partner with Chevron on new exploration and growth opportunities, said ARCO Alaska President and CEO Kevin Meyers. We look forward to continuing the cooperation shown by the joint ARCO-Chevron team that prepared for Lease Sale 87.

Meyers and Price also cited Sale 87, the states first area-wide lease sale, as an excellent example of how the state is working to encourage oil exploration and development.

ARCO and Chevron are already partners in the Hammerhead and Kuvlum Units in the Beaufort Sea northeast of the Prudhoe Bay oil field. Chevron is the designated exploration and development operator in the Hammerhead and Kuvlum Units.

Updated: August 1998