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NEWS BULLETIN

August 01, 2005 --- Vol. 11, No. 65August 2005

Pioneer to acquire up to 50 percent of Cosmopolitan

Pioneer Natural Resources said today that its Alaska subsidiary has signed an agreement with ConocoPhillips Alaska to acquire up to 50 percent working interest and potentially assume operatorship of the Cosmopolitan unit in Cook Inlet offshore the lower Kenai Peninsula.

Three wells and a sidetrack have been drilled in the unit, Pioneer said, “establishing a significant oil column.” A 3-D seismic survey will be shot later this year to refine the estimate of recoverable reserves.

Pioneer acquired a 10 percent working interest in the unit from ConocoPhillips earlier this year, along with “the option to acquire up to an additional 40 percent working interest and possibly succeed ConocoPhillips as operator of the unit after the new 3-D seismic data has been acquired and interpreted,” Pioneer said in an Aug. 1 press release. Pioneer said it would pay “a disproportionate share of the seismic acquisition and processing in exchange for the 10 percent working interest and option.” The new 3-D survey is expected to be completed this November.

Pioneer said the option gives it the right to acquire up to an additional 40 percent working interest and potentially become the unit operator “by paying cash or a disproportionate share of ConocoPhillips’ future costs.”

TAPS carriers ask FERC to investigate intrastate rates

The trans-Alaska oil pipeline carriers have petitioned the Federal Energy Regulatory Commission, alleging that 2005 rates set by the Regulatory Commission of Alaska for intrastate transportation on the trans-Alaska pipeline system are unlawful because they create an undue preference in favor of intrastate shippers.

The commission said July 29 that in a petition filed July 20 the carriers (BP Pipelines (Alaska), ConocoPhillips Transportation Alaska, ExxonMobil Pipeline, Koch Alaska Pipeline and Unocal Pipeline) said the intrastate rates are unjustly discriminatory against and an undue burden on interstate commerce, and asked FERC to investigate the RCA-set intrastate rates and set new intrastate rates equal to or comparable to interstate rates.

Anadarko applies for unit at Jacob’s Ladder prospect

Anadarko Petroleum has applied to form a unit at its Jacob’s Ladder prospect on the North Slope. The 37,982-acre unit area lies south of existing production on the North Slope, and is almost due south of the Duck Island unit (Endicott) and southeast of Prudhoe Bay.

Anadarko said in its July 21 application to the Alaska Department of Natural Resources that it holds 100 percent working interest ownership in the 18 state oil and gas leases proposed for inclusion in the unit.

Anadarko told the state it “will endeavor to secure a three-party partnership” for the unit prior to June 1, 2006, and will notify the state of its 2007 exploration program by June 1, 2006.

Anadarko said “if” the working interest owners decide to drill an exploratory well in the unit by June 15, 2006, they would complete operations by June 1, 2007. If the well is not drilled, they would pay the state a cash penalty of $275,000.

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