Development Plan Application filed for Terra Nova Oil Field.

FAIRFAX, Va.--(BUSINESS WIRE)--Aug. 5, 1996--Mobil Oil Canada Properties, and other participants in the Terra Nova oil field, today filed a Development Plan Application for the Terra Nova oil field with the Canada-Newfoundland Offshore Petroleum Board (C-NOPB) in St. Johns, Newfoundland.

The Terra Nova oil field, which is located about 285 miles southeast of St. Johns in the Jeanne d'Arc Basin on the Grand Banks of Newfoundland, is estimated to contain about 300-400 million barrels of recoverable crude oil. Initial production is expected by 2001, with average annual production anticipated to be about 100,000 barrels per day.

About $400 million (Canadian) has been spent to date on exploration, delineation and preliminary engineering of the field. The estimated capital cost to start-up is approximately $1.6 billion (Canadian).

The Development Application includes:

-- A development plan containing technical information on the development of the field

-- a Canada-Newfoundland Benefits Plan

-- an Environmental Impact Statement

-- a Socio-Economic Impact Statement

-- a Development Application Summary

A letter of intent was signed today with the Government of Newfoundland and Labrador covering benefits principles and various key fiscal terms, including royalties and taxes. This is sufficient to allow the participants to file the Development Plan Application.

The public and regulatory review of the project is expected to take about a year. The Terra Nova participants would make a decision on whether to proceed with construction once approval is received from the C-NOPB.

Participants in the project besides Mobil would include Petro- Canada (operator), Husky Oil Operations Limited, Murphy Oil Company Limited and Mosbacher Operating Limited. Individual company interests are not yet finalized, but Mobil expects to have at least a 21% interest.

Paul J. Hoenmans, president of Mobil's Exploration and Producing division, said that "Mobil is pleased with the progress that is being made on the Terra Nova project. Mobil has been active on the East Coast of Canada since the start of exploration in the early 1960s, and is presently one of the largest players in terms of acreage, discoveries and ongoing projects. The East Coast is expected to develop into a new core producing area for Mobil, with potential production, amounting to as much as 100,000 barrels per day oil equivalent around the turn of the century. The production would come from Hibernia, currently under construction and the Sable Offshore Energy Project, where a Development Plan Application was recently filed with the Province of Nova Scotia and Terra Nova. These projects are expected to provide attractive returns, with upside potential from deeper zones in some of the main fields, in satellite fields, and from future exploration."

CONTACT: Mobil Oil Canada

Heather Douglas, 403/260-7255 or

Gail Campbell Woolley and Christopher Springham,

703/846-2500