Conoco to Acquire Interest in Giant Norwegian Field.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--Oct. 24, 2000

Conoco Inc. (NYSE:COCA) (NYSE:COCB) said its Norwegian affiliate Norske Conoco will strengthen the company's significant holdings in the North Sea by acquiring equity in the giant Grane Field. The 6.4 percent interest in the field will be purchased from Statoil for about $60 million (NOK 555 million).

The acquisition will be effective January 1, 2001, and is expected to close in first quarter 2001, subject to Norwegian government approvals. It is expected to add reserves of 51 million barrels of oil equivalent (BOE) over the next several years, 90 percent of which is oil.

The Grane field is located in the Norwegian sector of the North Sea, 115 miles west of Stavanger, in water depth of 417 feet.

"The Grane field, with estimated reserves of 800 million gross BOE, is the largest oil field in Norway currently under development. The gross development cost will be about $2 billion, or about $120 million net to Conoco over the next two to three years," said Tony Gordon, Norske Conoco president and managing director. "The project recently has been approved for development by the Norwegian Parliament and major contracts are now being awarded. The field, which is expected to produce for 30 years, is planned to begin production in 2003, and at plateau, will add more than 13,000 net barrels of oil per day to Conoco's Norwegian production."

"This acquisition is of the size and quality that we're interested in because it will strengthen what is already a very important business area for Conoco and add significant production with strong performance metrics," said Rob McKee, Conoco executive vice president, exploration and production.

"It adds to Conoco's already significant holdings in Norway, and will join other legacy assets such as the Heidrun, Statfjord, and Troll fields, which are the major contributors to Norske Conoco's current production of 100,000 net BOE's per day. Conoco's production in Norway is projected to grow 30 percent to 130,000 BOE's per day by 2002," he said.

Conoco is a major, integrated energy company active in more than 40 countries.

This release contains forward-looking statements about Conoco's business plans, operations, production rates and reserves. 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 changes in anticipated operating costs; changes in anticipated crude oil and natural gas prices; changes in product costs and margins; unexpected interruptions of the operation of the company's facilities; changes in estimated reserves; failure to achieve expected reserve or production levels due o operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; and unanticipated political events. Such matters are as well as other risks detailed in Conoco's publicly available filings with the Securities and Exchange Commission.