press release


Discovery Among Largest Single Finds in Deepwater West Africa


Nigeria Map

WHITE PLAINS, N.Y., Jan. 6 - Texaco announced today the completion of testing on the Agbami-2 appraisal well, which confirmed that the Agbami structure is a giant discovery with potential recoverable reserves in excess of one billion oil equivalent barrels. The well test surpassed expectations and, together with other technical data, suggests that the Agbami discovery likely ranks among the largest single finds to date in deepwater West Africa. The structure spans an area of 45,000 acres and extends from Block 216 into Block 217, offshore Nigeria. Texaco's share of the production from this resource is expected to exceed 50 percent.

The Agbami-2 appraisal well, located in Block 216 approximately 220 miles southeast of Lagos, was drilled in 4,800 feet of water to a total depth of 15,683 feet. The well encountered 534 feet of pay in five separate oil-bearing zones, one of which flowed at a maximum rate of 10,000 barrels of oil per day with a well-head pressure of 2,200 psi (pounds per square inch). Surface equipment limitations prevented the achievement of a higher flow rate. Oil from the reservoir is light, sweet crude (45 degree API gravity) with no contaminants.

The Agbami-2 well delineated the discovery announced in January 1999. The initial well, Agbami-1, encountered 420 feet of oil pay in multiple zones. Complete appraisal of the field will require further delineation drilling and technical studies.

Commenting on the announcement John J. O'Connor, Senior Vice President of Texaco Inc. and President of Worldwide Exploration and Production said, "The successful conclusion of the well test sets the stage for development of a world-class project that will add substantially to the company's resource base and will significantly increase Texaco's future production. Additionally, it will further enhance Nigeria's position as an important oil producing nation."

Texaco has interests in a total of five contiguous deepwater blocks offshore Nigeria, all of which have significant undrilled potential. In Block 216 the interest owners are Famfa Oil, an independent Nigerian oil company - operator, Texaco's wholly owned affiliate Star Deep Water Petroleum Limited - technical advisor, and Braspetro-Petrobras Internacional S.A. In Block 217 the interest owners are Statoil - operator and Texaco Nigeria Outer Shelf Ltd. Texaco also has interests in Blocks 213, 215 and 218.

With the completion of Agbami-2, the drill ship Glomar Explorer will move 13 miles west to test another very large exploration prospect also located in Block 216. This well, Ikija-1X, is expected to spud this month.

Note to Editors:Texaco has had a presence in Nigeria since 1913 and as operator of Texaco Overseas (Nigeria) Petroleum Company Unlimited (TOPCON), it produces some 55,000 barrels of oil per day from offshore operations in the Pennington and adjacent fields.

On March 9, 1999 Texaco and Statoil announced a wildcat discovery in Block 218. The discovery well, Nnwa-1, was spudded on December 11, 1998, in 4,206 feet of water, and well operations were completed in February 1999. The Nnwa-1 well encountered more than 310 net feet of pay in multiple zones from 8,700 feet to the total depth of 14,645 feet.

This press release contains forward-looking statements about our expectations for potential recoverable reserves in the Agbami structure and our share of these potential reserves. Our actual production from this structure may prove to be smaller than we currently estimate, and may be different than we currently expect, if business conditions, such as energy prices, world economic conditions, demand growth, and inventory levels, change. For a further discussion of additional factors that could cause actual results to materially differ from those in the forward-looking statement, please refer to the section entitled "Forward-Looking Statements and Factors That May Affect Our Business" in Texaco's 1998 Annual Report on Form 10-K.

Updated: January 2000