press release

French/U.S. group signs production-sharing contracts in two deepwater blocks offshore Gabon

NOTE: The following news release was issued by the Vanco Gabon Group.

Houston, Texas, Nov. 12, 1998 - The Vanco Gabon Group, comprised of French and U.S. oil and gas exploration companies, has entered into production-sharing contracts for two exploration blocks located in deep water offshore Gabon, West Africa.

France-based Total S.A. (28%) and affiliates of U.S.-based Unocal Corporation (25%) and Kerr-McGee Corp. (14%), have joined Vanco Energy Company (22%) and Reading & Bates Development Co. (11%) to form the Vanco Gabon Group.

The two adjacent exploration blocks, known as Astrid Marin and Anton Marin, respectively cover 6,000 square kilometers and 6,600 square kilometers. To be operated by a subsidiary of Total S.A., both blocks are located in water depths of 1,000 to 3,000 meters, 80 kilometers from the southern Gabonese coast in the northern part of the lower Congo oil basin.

The group is assembling an integrated project team to provide exploration and production expertise for the project. A 3D seismic program is scheduled to begin in 1999, followed by the drilling of several exploration wells starting in 2000.

For Total, this transaction comes after major discoveries on Block 14 offshore Cabinda, Angola, and the acquisition of an interest in the Nigerian OPL246 exploration block located south of the Niger delta.

"The Gabon blocks offer significant opportunity to apply Unocal's expertise in these types of oil-bearing tertiary sedimentary basins," said Andrew Fawthrop, vice president of Unocal New Ventures. "The Astrid and Anton blocks are on trend in the Congo Fan Basin where discoveries have been made. As part of an integrated operations team, we believe Unocal's low-cost drilling and deepwater engineering and construction expertise will contribute to the success of both the exploration and production phases of the project."

"These contracts are the first ventures by Kerr-McGee in the prolific deepwater areas offshore West Africa," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "This world-class exploration opportunity is a continuation of Kerr-McGee's long-term strategy to expand our deepwater exploration and production program around the world."

Group Participants

Total S.A. is one of the world's largest integrated oil and gas companies. The French company's operations include exploration, development and production of crude oil and gas, refining and marketing of petroleum products, and trading and transport of both crude and finished products. It also makes specialty chemicals and runs more than 7,000 Premier service stations, located primarily in Europe and Africa.

California-based Unocal Corporation is a leading global oil and gas exploration and production company with significant pipeline and power plant project developments worldwide.

Kerr-McGee Corp., based in Oklahoma City, Okla., explores for and produces oil and natural gas in the Gulf of Mexico, the North Sea, China, Indonesia, Thailand and Yemen, and is the world's fifth largest producer of titanium dioxide pigment.

Houston-based Vanco Energy Company is currently involved in activities in the Netherlands portion of the North Sea and Morocco, as well as in Gabon.

Houston-based Reading & Bates Development Co., an affiliate of the world's largest marine drilling contractor, R&B Falcon Corporation, is involved in oil and gas exploration in the Gulf of Mexico, West Africa, South America and the Mediterranean Sea.

Forward-looking statements and estimates regarding exploration activities in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially.

Updated: November 1998