press release

Texaco Press Release - Texaco Announces Oil and Gas Discovery in Gulf of Mexico

Project Team Evaluating Development Options


NEW ORLEANS, Dec. 11 - Texaco announced today the discovery of additional oil and gas reserves in High Island (HI) Block A-582, located in the Gulf of Mexico, approximately 300 miles southwest of New Orleans.

Named the Cyrus Prospect, the discovery well is situated in 440 feet of water and was drilled to a total depth of 15,147 feet into a faulted structure on the south end of the Block A-582. The discovery is currently being evaluated by the drilling of a second and possibly a third well, and a project team has been formed to further evaluate development of the prospect. Texaco is operator with a 47-percent interest in the discovery. Devon Energy Corporation holds a 37-percent interest, with six other parties holding the remaining ownership interests.

Commenting on the discovery, Robert S. Lane, Texaco's New Orleans Business Unit Vice-President, said, "Cyrus is an excellent example of Texaco people working with Devon and others using state-of-the-art seismic technology to find new resources in a mature area of the Gulf of Mexico. This discovery will have a positive impact on our existing strong portfolio of assets in the Gulf, which is a focus area of our global upstream strategy."

Oil and gas were first discovered in this structure in 1982 near the northern boundary of block HI-582. More than 230 feet of pay was encountered in four sands in the HI A-582 #4 well. Productivity of these sands has been established in the area of this discovery through well tests.

While development plans are not yet finalized, this additional discovery is expected to require the installation of a new, Texaco-operated, platform. Construction of a new platform would take 12-18 months once the decision has been made to pursue this development plan. First production from a new platform would occur sometime in the second half of 2002.

Cyrus is located on the southern flank of Texaco's Krypton field, which encompasses HI Block A-563, and the northern half of HI Block A-582. Krypton is a prolific field that has cumulative production of 588 billion cubic feet of natural gas and 12.1 million barrels of oil in its 18-year history.

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 forward-looking statements are subject to risk factors associated with oil, gas, power, chemicals, coal and renewables businesses. It is believed that the expectations reflected in these statements are reasonable, but may be affected that by a variety of variables which could cause actual results or trends to differ materially, including, but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. 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: December 2000