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## Se p t e mb e r 

A nn o u n ce d i n t e n t t o i n ves t a pp roxi m a t ely $45 m illio n t o acq u ire t h e eq u ivale n t of a 37.5 % ow n ers h i p p osi t io n  i n t h e M e d u sa S p ar p ro d u c t io n p la t for m , w h ic h  i s m oore d  i n  over 2,200 fee t of wa t er o n t h e M e d u sa fiel d  i n t h e G u lf of M exico. 

T h is was s u bseq u e n t ly fi n alize d  i n D ece m ber by p ar t ici p a t i n g i n t h e for m a t io n  of M e d u sa S p ar LL C , a li m i t e d liabili t y co mp a n y, alo n g wi t h M u r p h y O il C or p ora t io n a n d C allo n Pe t role u m C o mp a n y. T h e LL C  will ear n  a t ariff base d  o n t h e h y d rocarbo n p ro d u c t io n  vol u m e t h ro u g h p u t p rocesse d by t h e s p ar fro m t h e M e d u sa fiel d a n d s u rro u n d i n g d e d i c a t e d blocks. T h ree of t h e i n i t ial six p la t for m  wells are n ow flowi n g, a n d t h e o t h er t h ree are ex p e c t e d t o be i n p ro d u c t io n  by t h e e n d  of t h e t h ir d  q u ar t er of 2004. 

W e are acco u n t i n g for o u r i n ves t m e n t i n t h e LL C a n d o u r s h a r e of t h e LL C ’s res u l t s of o p era t io n s u si n g t h e eq u i t y m e t h o d  of acco u n t i n g for u n co n soli d a t e d affilia t es. T h e LL C h as n o s p ar o p era t i n g, m ai n t e n a n ce, or re p air cos t  obliga t io n s. N o n reco u rse f i n a n ci n g for o n e- h alf of t h e LL C ’s t o t al i n ves t m e n t  i n t h e s p ar was ob t ai n e d . T h e loa n  is sec u re d by a m i n i m u m t h ro u g h p u t g u ara n t ee, w h ic h  we believe will be s u fficie n t t o ex t i n g u is h t h e d eb t , f r o m M u r p h y. 

W e believe t h e M e d u sa S p ar, wi t h  a 20-year d esig n  life, will p rove t o b e a n  ac t ive p ro d u c t io n h u b a n d  a key asse t  i n t h e d ee p wa t er i n fras t r u c t u re bei n g i n s t alle d  i n t h e G u lf of M exico. W i t h t h is i n m i n d t h e s p ar is fi tt e d  wi t h p rovisio n s for acco mm o d a t i n g u p t o t e n s u bsea well t ie-backs. T h is p osi t io n s u s t o p ar t ici p a t e i n o t h er p rojec t s s u rro u n d i n g t h e s p ar a n d p rovi d es o pp or t u n i t ies t o m arke t o u r e n gi n eeri n g a n d p rojec t m a n age m e n t services; s u bsea h ar d ware; a n d i n s t alla t io n , m ai n t e n a n ce, a n d  re p air services. 

