Texaco Press Release - Texaco and China United Coalbed Methane Corporation, Ltd. Sign Contract
FOR RELEASE: WEDNESDAY, NOVEMBER 8, 2000
BEIJING, PRC, Nov. 8 - Texaco announced today that it has signed three contracts with the China United Coalbed Methane Corporation, Ltd. (CUCBM) to expand Texaco's coalbed methane (CBM) program into China's Ordos Basin.
The contracts include an appraisal program to be carried out by the company over three prospective blocks covering 6,897 square kilometers in the northeastern portion of the Ordos Basin. The contract area is located along the Yellow River, stretching across the borders of Shaanxi and Shanxi Provinces, and the Inner Mongolia Autonomous Region. The contract provides for an exploration period to be followed, if deemed commercial, by phased development and production periods.
Including the new Zhungeer, Shenfu and Baode contracts, Texaco now has a CBM resource base encompassing more than 18,000 square kilometers in China. In 1998, Texaco was the first company to sign a production sharing contract with CUCBM.
Commenting on the agreement, Robert A. Solberg, President of Texaco Worldwide Upstream Commercial Development said, "As a result of these contracts, Texaco will have an interest in eight of 10 CBM license blocks awarded to date in China, contributing to Texaco's continued leadership role in coalbed methane technology and appraisal. In addition, these projects offer us the opportunity to supply a steady, long-term source of energy for the region along with the environmental benefits of being a clean-burning fuel alternative to coal."
Solberg continued, "The development of China's coalbed reserves for fuel is an important component of the country's energy and environmental development plan. Texaco is pleased to help develop a resource which complements our global energy development strategies and strengthens our long-standing business relationships with China."
The signing was held at the Great Hall of the People in Beijing. Mr. Huang Shao He, Chairman of CUCBM, signed the contract on behalf of CUCBM.
CUCBM was established in May 1996 to more effectively develop China's vast coalbed methane resources. China National Petroleum Corporation and China Coal Construction Group Corporation are each 50 percent share holders of CUCBM.
In the United States, Texaco's share of CBM production in the San Juan Basin of New Mexico and Colorado and in the Uinta Basin of Utah is currently more than 175 million cubic feet per day.
This press release contains a number of forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, statements made concerning Texaco's expected performance and financial results in future periods are based upon Texaco's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors known to Texaco, among others, could cause Texaco's actual results to differ materially from those described in the forward-looking statements: mechanical failures, worldwide and industry economic conditions, inaccurate forecasts of crude oil, natural gas and petroleum product prices, environmental, health and safety regulations, refined product specifications, divestiture of operations, and the outcome of pending and future litigation and government proceedings. In addition, you are encouraged to review Texaco's latest reports filed with the SEC, including Texaco's Annual Report on Form 10-K filed with the SEC on March 30, 2000, which describes a number of additional risks and uncertainties that could cause actual results to vary materially from those listed in the forward-looking statements made in this press release.
Updated: November 2000