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. O ceanee r ing  I n t e r na t ional P a ge  13 2003AnnualRepo r t Medusa Production Spar