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Anadarko Petroleum Corporation (APC)’s Latest Mind-Blowing Discovery

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Anadarko Petroleum CorporationAnadarko Petroleum Corporation (NYSE:APC) announced on April 27, that its Phobos-1 well in the deepwater Gulf of Mexico encountered about 250 net feet of high-quality oil play in Lower Tertiary-aged reservoirs.

The Phobos discovery, located in Sigsbee Escarpment block 39, was drilled to a total depth of 28,675 feet in approximately 8,500 feet of water, approximately 11 miles south of Anadarko Petroleum Corporation (NYSE:APC)’s Lucius discovery, which is under development. Anadarko currently is incorporating the data from the Phobos well to determine future activities.

Anadarko Petroleum Corporation (APC) Reported Its Phobos Discovery in the Deepwater Gulf of Mexico

Source: Anadarko Petroleum Corporation

Anadarko Petroleum Corporation (NYSE:APC)’s expertise and focused pursuit of large exploration targets in the Gulf of Mexico is one of the industry’s safest and most successful deepwater explorers. Anadarko has discovered more than 30 fields in the deepwater Gulf of Mexico. About 90% of its current leads and prospects in the Gulf of Mexico are located in the Miocene and Lower Tertiary plays. The company is spending about 15% of its capital allocation in this area.

Anadarko Petroleum Corporation (APC) Reported Its Phobos Discovery in the Deepwater Gulf of Mexico

Source: Anadarko’s Howard Weil AEC Presentation

“Our 2013 Gulf of Mexico exploration program is off to an outstanding start, as Phobos marks our third significant deepwater success this year,” Anadarko Sr. Vice President International and Deepwater Exploration Bob Daniels said. “Phobos is our first well in the previously untested Sigsbee Escarpment area of the Gulf of Mexico and successfully tested a significant four-way structure in the Lower Tertiary. Phobos’ close proximity to our Lucius project is expected to further enhance the economics of this potential future development”.


Anadarko's Howard Weil AEC Presentation

Source: Anadarko’s Howard Weil AEC Presentation

Anadarko Petroleum Corporation (NYSE:APC) is the operator of the Phobos discovery with a 30% working interest. Anadarko owns an average 64% working interest in 479 blocks in the Gulf of Mexico. The company operates seven active floating platforms, holds interests in 34 producing fields, and is in the process of delineating and developing six additional fields in the area. During 2012, the company continued an active deepwater exploration and appraisal program in the Gulf of Mexico and is continuing to take advantage of existing infrastructure to accelerate development activities at reduced cost.

As for its Lucius asset, according to its 2012 annual report, the company drilled a successful development well, confirming and extending the Lucius field along its western flank in December 2012. During 2013, the company plans to drill four additional development wells and begin completion operations. First production from Lucius is expected in 2014 and adding Phobos into the mix, Anadarko Petroleum Corporation (NYSE:APC) will consolidate a solid position in the area.

The Gulf of Mexico region achieved sales volumes of more than 118,000 Boe/d (barrels of oil equivalent per day) during the first quarter of 2013. Moreover, sales are expected to increase by 10% during the year.

Anadarko Petroleum Corporation (APC) Reported Its Phobos Discovery in the Deepwater Gulf of Mexico

Source: Anadarko’s Howard Weil AEC Presentation

Anadarko Petroleum Corporation (NYSE:APC) increased its exploration, appraisal and development drilling activity, surpassing pre-moratorium levels. For the current year, the appraisal has a 70% success rate. Four operated and two non-operated rigs are currently active.

As of April 23, 37 semi-submersibles and drillships are under contract in the deepwater Gulf of Mexico, according to RigLogix. Royal Dutch Shell plc (ADR) (NYSE:RDS.B) has seven deepwater rigs under contract, currently the highest number of rigs in the area. From the seven rigs, four are mobile offshore drilling units under contract, operating across the deepwater Gulf of Mexico. The region accounts for approximately 55% of Shell’s oil and gas production in the USA.

The company owns an interest in more than 423 licensed blocks in the area, of which 116 are producing on a unit, or are undergoing field development. Shell also operates ten manned platforms and numerous subsea systems with an average production of about 225 thousand boe/d (Shell’s share).

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