NEWS BULLETIN

June 17, 1998 --- Vol. 4, No. 33June 1998

BP projects 20 percent production increase

BP Exploration (Alaska) Inc. executives told financial and oil analysts meeting in Anchorage today that the company expects to boost oil output from its North Slope fields by 100,000 barrels a day over the next few years — more than a 20 percent increase.

BP currently produces approximately 460,000 barrels of North Slope oil a day. The company hopes to push production to more than 500,000 barrels a day by early next century and to sustain it at more than 500,000 barrels for the foreseeable future.

The increase would be fueled by four new fields scheduled to begin production by 2001 — Badami. Northstar, Liberty and Tarn — as well as ongoing drilling, enhanced oil recovery and satellite development projects in existing fields.

BP, ARCO and partners announce exploration success in Prudhoe Bay satellite area

BP Exploration (Alaska) Inc., ARCO Alaska Inc., Exxon Company USA, Mobil Exploration and Producing U.S. Inc., Chevron USA Inc. and Phillips Petroleum Co. have confirmed two oil accumulations in the Northwest Eileen area of the Prudhoe Bay field, BP said in a statement today. The Northwest Eileen accumulation is estimated to contain 30-50 million barrels of recoverable oil in the Kuparuk sand. The Sag and Ivishak sands also are estimated to contain 30-50 million barrels of recoverable oil.

Three Northwest Eileen appraisal wells (NWE 1-01, NWE 1-02 and NWE 2-01) were drilled off ice pads during February, March and April. One objective was to define hydrocarbon-bearing sand in the Kuparuk formation originally penetrated in 1969 by a Mobil/Phillips well that flowed at 2,208 barrels of oil per day of 24.4 API gravity oil. The second objective was to define hydrocarbon-bearing sand in the Sag River and Ivishak formations, which originally were penetrated in 1969 by ARCO/Exxon and Mobil/Phillips wells.

Two successful appraisal wells encountered 60-65 feet of oil-bearing rock in high-quality Kuparuk sand. Fluid samples from both wells indicate 24-26 API gravity oil.

One successful appraisal well encountered 48 feet (gross) of oil-bearing rock in the Sag River sand and 54 feet (gross) of oil-bearing rock in the Ivishak formation. Fluid samples indicate 38 API gravity oil in the Sag and 32 API gravity oil in the Ivishak.

Working with the state of Alaska, Northwest Eileen owners plan to drill additional appraisal and development wells in 1999-2000.

BP, as Prudhoe Bay western operator, served as drilling operator of these wells on behalf of the Northwest Eileen and Prudhoe Bay owners. The six companies also hold leases adjacent to the Northwest Eileen Kuparuk and Sag/Ivishak discoveries.

The Northwest Eileen accumulation is part of the ongoing satellite drilling program within the Prudhoe Bay field. As many as three additional Prudhoe Bay satellite wells could be drilled in 1998, said BP.

Satellite accumulation discovered at Endicott

BP Exploration (Alaska) Inc. has discovered a new satellite oil accumulation near the Endicott field, about 10 miles northeast of Prudhoe Bay, the company said in a statement today..

The “Eider” field, owned 100 percent by BP, is estimated to contain eight million barrels of recoverable oil. It currently is producing about 3,000 barrels of oil a day under a long-term test arrangement. BP, operator of Endicott, expects it to continue full-time production following the test.


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