Marking the start of a five-year, $400 million Gulf of Mexico(GOM) exploration and production (E&P) assault, Conocoannounced Monday the exchange of interest in several deep-waterblocks with Exxon and the debut of the Deepwater Pathfinder, adrillship capable of reaching 10,000-feet depths.

In the exchange, Conoco acquired 50% of 29 Exxon-owned blocksand Exxon acquired 50% of 30 Conoco-owned blocks. The undevelopedacreage is in Green Canyon, Garden Banks, Walker Ridge and KeathleyCanyon. Terms of the transaction were not disclosed. With thisaddition, Conoco holds interest in 295 blocks in the GOM, amountingto 1.2 million net acres.

“The Gulf of Mexico continues to be one of the great growthopportunities for oil and gas in the U.S.,” said Rob McKee,Conoco’s executive vice president, “and these newly acquiredinterests are perfectly aligned with our exploration strategy tofocus on deep-water. This exchange increases our access to acreageand at the same time spreads economic and geological risks.”

Monday’s announcement to debut the ultra-deepwater drillshipkicked-off the new program. “Really, this plan for the Gulf starts[when] the Pathfinder starts drilling,” said Lee Scurry, a Conocospokesperson. She added that the ship should sail to its first sitesome time before the end of the month, but the exact time and sitehave not been disclosed. The company said this new ship, which isjointly owned by Conoco and R & B Falcon, is the first of itskind to possess the capability of drilling in such deep waters. TheDeepwater Pathfinder will spend its first five years in the Gulf,and McKee said it will improve the company’s overall dailyperformance in the early stages of the drilling program.

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