Kerr-McGee Corp. has added hedge positions for 2004 sales. They include 100,000 MMBtu/d with a floor price of $5/MMBtu and a ceiling price of $6.06/MMBtu for the first quarter; 565,000 MMBtu/d through fixed-price swaps at an average price of $4.75 for the second quarter; and 575,000 MMBtu/d through fixed-price swaps at an average price of $4.75 for the third and fourth quarter. With the additional hedges, Kerr-McGee has hedged approximately 70% of its projected 2004 U.S. oil volumes at an average WTI price of $27.69/bbl and approximately 70% of its 2004 North Sea oil volumes at an average Brent price of $25.99/bbl. Approximately 75% of the projected 2004 U.S. gas sales have been hedged through a combination of fixed-price swaps and costless collars. Details on Kerr-McGee’s oil and gas hedges for the remainder of 2003 and for 2004 are available at www.kerr-mcgee.com/guidance.html.

The Interior Department’s Minerals Management Service reported that it received 16 bids on 14 tracts from four companies in the Eastern Gulf of Mexico Lease Sale 189. The lease sale will take place Wednesday at 9 a.m. in New Orleans. The sale is the 12th Eastern GOM Outer Continental Shelf lease offering, and the configuration of is the same as MMS Eastern GOM Sale 181 held in December 2001. The proposed sale area encompasses 256 blocks in the Eastern GOM Planning Area and covers 1.47 million acres. Available unleased blocks in the planning area currently number 138 and cover about 0.79 million acres and are located from 100 to about 196 miles offshore in water depths of about 1,600 to more than 3,425 meters. Estimates of undiscovered economically recoverable hydrocarbons in this proposal range from 65 to 85 million bbl of oil and 0.265 to 0.34 Tcf of natural gas. The MMS estimates the net economic value for this proposed sale to be between $100 million and $500 million in 2003 dollars. A royalty suspension of 12 MMboe for a lease in water depths of 1,600 meters and deeper has been continued in this Notice of proposed sale. In addition, lessees can apply for added discretionary royalty relief on these leases, if needed.

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