Due to North Sea activity, Kerr-McGee Corp. is boosting its 1989 exporation and production budget by 40 percent with anticipation of increased oil and natural gas reserves from the United Kingdom sector.
Exploration and production has garnered $220 million in capital expenditures for 1989, more than half of the $435 million budget for the year.
"Most of the increase is for developing the large base of probable reserves that will move to the proved reserve category this year and next," said Frank McPherson, chairman of the board, at the annual stockholder's meeting in Oklahoma City Tuesday.
Probable reserves are projected to boost Kerr-McGee reserves by 72 percent for 1989. Proved and probable reserves are expected to make a 28 percent positive impact this year.
Oil reserves at year-end totaled 93.5 million barrels, up 4 percent from 89.6 million at the end of 1987. Gas reserves were 784 billion cubic feet at Dec. 31, a 10 percent increase from 712.9 billion cubic feet a year earlier.
In 1988, the North Sea accounted for 40 percent of Kerr-McGee's exploration and production with 15,000 barrels per day.
North Sea reserves are expected to increase 131 percent in 1989.
"We expect a significant increase in oil production and that proved oil and gas reserve additions will be substantially above production in both 1989 and 1990," said McPherson.
Only a portion of the North Sea blocks in which Kerr-McGee owns interests have been developed. Kerr-McGee holds interests in 17 leases in 19 blocks.
Those in production include the North Brae field, the Central Brae field, South Brae field and the Beatrice field.
Central Brae production will begin this summer, and is anticipated to reach 23,000 barrels of oil per day by 1990, said Jere McKenny, president of Kerr-McGee. South Brae produced an average of 103,000 barrels of oil per day in 1988. Beatrice produced 30,000 barrels of oil per day in 1988.
Production in North Brae, which began ahead of schedule last April, was at 90,000 barrels of condensate by the end of the year. …