Commitment for Deepwater Frontier

R&B Falcon Drilling has received a letter of intent from for Petroleo Brasiliero S.A. (Petrobas) for a two-year contract for DP drillship Deepwater Frontier, for operations offshore Brazil in up to approximately 8,900 ft. of water. Deepwater Frontier, capable of drilling in up to 10,000 ft. of water, is owned 60 percent by R&B Falcon Corp. and 40 percent by Conoco. The vessel will sail to Brazil upon completion of its current one-well commitment in West Africa. Operations for Petrobras are expected to commence in November 1999. The current well underway in West Africa and the Petrobras work, will essentially complete all of the R&B Falcon's 2.5-year drilling contract obligation with respect to the rig sharing agreement with Conoco. Conoco, Unocal Find Deepwater Oil Near New Orleans Conoco Inc. and Unocal Corp. discovered oil with their K2 exploration well in the Green Canyon Block 562 in deep water in the Gulf of Mexico, Conoco said. Work on the well, located about 180 miles south of New Orleans, has been suspended to study the significance of the find, a company spokesperson said. The K2 well, started May 17 in 3,900 ft. of water, was suspended to "allow us to plan a safe and cost effective appraisal of the hydrocarbon zone we have encountered, as well as continue to explore the deeper objectives," said Conoco Executive Vice-President Rob McKee. McKee also said the well had encountered oil in a high-quality reservoir and the company was encouraged by the results to date, although the commercial significance is yet to be determined. Conoco and Unocal each hold a 50-percent interest in the Green Canyon 562 block. Drillship Deepwater Pathfinder, which is being moved to Mississippi Canyon Block 1002, is expected to return to the location next spring, which is the earliest the ship's drilling schedule will allow, Conoco said. The Green Canyon prospect is the second well and second discovery drilled by the Conoco and R&B Falcon drillship. The ship's first well was on Garden Banks Block 783. McKee said the companies plan to penetrate some deeper objectives with a different well configuration when drilling is resumed.