Conoco Announces Discovery in U.K.; North Sea Success from Low-Cost Drilling Technique.

Business/Energy Editors

ABERDEEN, Scotland--(BUSINESS WIRE)--May 15, 2000

Conoco (NYSE:COCA) (NYSE:COCB) announced today the discovery of crude oil and natural gas in the North Sea. The company used a unique exploration approach, recently adopted in the U.K. by industry and government, that can reduce drilling costs by 30 percent on average.

Currently known as the Kappa discovery, the find was made in block 15/29b and extends into block 21/4a-North. It lies in the central North Sea, 125 miles (200 kilometres) northeast of Aberdeen, Scotland. The co-venturers are Conoco (U.K.) Limited, operator, with 80 percent and 86.3 percent respectively of blocks 15/29b and 21/4a-North; and Chevron U.K. Limited with 20-percent and 13.7-percent respectively.

"We encountered a total hydrocarbon column of 150 feet (45.7 metres)," said John Williams, general manager of exploration, at Conoco (U.K.) Limited. "An appraisal well is planned for late 2000 to determine economic viability. Nearby discoveries suggest the oil will be sweet and light, and we are optimistic about the likelihood of commercial development."

Using advanced geophysical techniques, Conoco created seismic images of the prospect which indicated the presence of hydrocarbons. The company drilled what the U.K. petroleum industry is calling a "finder well," which is designed to confirm the presence of hydrocarbons at a minimum cost. In the event of a discovery -- as is the case with Kappa -- more comprehensive testing and evaluation can be conducted during the appraisal stage.

"The North Sea, which is a mature exploration province, has the potential for many more productive years, provided we get the cost base right. What we call the finder well approach is helping us to do that," Williams said. "In the case of the Kappa well, we logged the discovery but did not test it. As a result, we saved time and money."

The Kappa exploration well was drilled by the semi-submersible rig "Drillstar" to a depth of 7,024 feet (2,140 metres) into late Palaeocene Forties Formation sandstone during October and November of 1999. It has been plugged and abandoned while the company evaluates the find.

The discovery is about 10 miles (16 kilometres) from the Britannia gas field, which is operated by Britannia Operator Limited (BOL), a Conoco and Chevron joint venture. The Alba oil field, operated by Chevron and in which Conoco has a 11.68-percent equity, is 15 miles (24 kilometres) away.

Conoco is a major, integrated energy company active in more than 40 countries. Conoco (U.K.) Limited, its British-based upstream subsidiary, has an extensive portfolio of both U.K. and international exploration and production assets.

This release contains forward-looking statements about Conoco's operations and business plans. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Actual outcomes and results may differ materially from what is expressed herein. Among the factors that could cause such differences are technical difficulties; changes in crude oil and natural gas prices; changes in anticipated construction and manufacturing costs; or political events. Such matters are detailed in Conoco's publicly available filings with the Securities and Exchange Commission.