News Release
July 06, 1999

Ocean Energy Announces Exploration Joint Venture with Duke Energy

HOUSTON – Ocean Energy, Inc. (NYSE: OEI) and Duke Energy Hydrocarbons LLC, a wholly owned subsidiary of Duke Energy (NYSE: DUK) announced today a joint venture agreement on the Outer Continental Shelf, offshore Louisiana and Texas.

Under the terms of the agreement, Duke Energy Hydrocarbons has agreed to participate with up to a 50 percent working interest in 13 of OEI’s exploratory drilling prospects. The venture anticipates drilling costs in excess of $40 million through the remainder of 1999.

Furthermore, the venture anticipates spudding all 13 exploratory wells during the second half of 1999 with one well currently drilling and two other wells scheduled to commence within the next two weeks. Additional wells could be recommended in 2000 contingent upon success in the 13-well program.

Duke Energy Hydrocarbons will also participate with a 50 percent working interest in OEI’s 1998 "Highside" discovery at Grand Isle 68.

James T. Hackett, Ocean Energy president and CEO, stated, "This venture is a great opportunity for Ocean Energy to expand its Gulf of Mexico shelf exploration program in 1999 as activity increases from one well to 14 wells in the next six months. In addition to expediting our drilling program, this JV also monetizes a small portion of one of Ocean’s most valuable hidden assets, namely its large inventory of projects. We could not be more delighted with the quality partner we have in Duke Energy."

Duke Energy Hydrocarbons is a sister company of Duke Energy Trading and Marketing (DETM), which is one of the nation’s largest energy marketers. DETM is the is the wholesale energy trading and marketing arm of Duke Energy and serves as the exclusive marketer for the North American natural gas production of Mobil Oil Corporation, which owns 40 percent interest in DETM.

"Duke Energy is pleased to be taking a significant step in addressing its natural gas open position management by entering into this agreement with Ocean Energy," said Brad Karp, president of Duke Energy Hydrocarbons. "We view this agreement as the cornerstone for an expansive business relationship between Ocean Energy and Duke Energy. The envisioned business relationship will seek to maximize the results of both companies by integrating the leading exploration and production capabilities of Ocean Energy with the advanced energy marketing and commodity price risk management capabilities of Duke Energy."

Duke Energy Corporation (NYSE:DUK) is a global energy company with more than $26 billion in assets. Headquartered in Charlotte, N.C., the company reaches into more than 50 countries, producing energy, transporting energy, marketing energy and providing energy services. In the United States, Duke Energy companies provide electric service to approximately two million customers in North Carolina and South Carolina; operate interstate pipelines that deliver natural gas to various regions of the country; and are leading marketers of electricity, natural gas and natural gas liquids. Additional information about the company is available on the Internet at:

Certain statements in this news release regarding future expectations, plans for acquisitions, dispositions, and oil and gas reserves, exploration, development, production and pricing may be regarded as "forward looking statements" within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company’s SEC filings, including the Annual Report on Form 10-K for the year ended December 31, 1998. Actual results may vary materially.

Ocean Energy, Inc. is an independent energy company engaged in the exploration, development, production, and acquisition of crude oil and natural gas. For more information, contact Investor Relations or mail requests to 1001 Fannin, Suite 1600, Houston, Texas 77002

Contact: John T. Raymond
Phone: (704) 382-8333
24 Hour Phone: (704) 382-8333
Contact: Liz Johnson
Phone: (713) 627-5011
24 Hour Phone: (704) 382-8333