Capco acquires GoM gas field from ExxonMobil

Capco Energy Inc. purchased Exxon Mobil Corp.'s High Island block 196 field area interests, in federal waters of the Gulf of Mexico. The acquisition includes the producing field interest in Lease OCS-G 6168 along with the associated field infrastructure at High Island block 176. The field has produced in excess of 70 bcf of gas to date from multiple reservoirs and is currently producing approximately 2.4 MMcf/d from three wells. Capco plans to be the field operator.

The purchase price of the property was $4 million. Additionally, a $3.5 million bond was posted with the MMS. Funding for the acquisition, including bond deposits, was provided by an investor group, who will initially own the entire acquired interest.

After meeting certain covenants, the investor group will retain one-third of the production income and Capco will hold a two-thirds interest in the production income. In addition, Capco has the right to acquire the investor group's remaining one-third interest for a predetermined purchase price within a prearranged time period.

2/10/05