Anadarko’s Drill of Heidelberg-2 Well in GoM Successful
Anadako Corp. (NYSE:APC) announced that it has successfully drilled a second well off the U.S. Gulf of Mexico. [1] The Heidelberg-2 appraisal well, located in the Green Canyon Block 903, encountered around 250 feet of oil, reinforcing the company’s earlier model for the prospect. The Heidelberg discovery can hold about 200 million barrels of oil, according to the company. Anadarko has been actively participating in deepwater exploration in the GoM and at offshore locations in Africa and Asia. Oil major Exxon Mobil (NYSE:XOM) also holds a stake in the prospect. [2]
We have a $90 price estimate for Anadarko, which is approximately in line with the current market price.
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Deepwater Prospects
The latest appraisal well was drilled at a total depth of approximately 31,000 feet and under 5,000 feet of water. [1] The company reported that the initial data from the well indicated that the well had high-quality oil and that the underground reservoirs were continuous and pressure-connected. The earlier discovery of the well had encountered 200 feet of oil and the present drilling has provided additional support for Anadarko’s hopes that it has encountered a major find. Anadarko has been focusing on liquids rich and deepwater prospects since 2011 to offset the impact of low gas prices on its revenues.
Anadarko holds a 44.25% operating stake in the Heidelberg prospect. Competitors Apache Corp. and Italian firm Eni hold a 12.5% stake each. Statoil, Exxon Mobil and Cobalt Energy also have equity interests in the find. We expect Anadarko to continue with its successful exploration program that helped the company achieve a 159% reserve replacement ratio last year. A high replacement ration can help Anadarko increase production levels over the future.
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- Anadarko announces positive results of the Heidelberg-2 appraisal well, Theflyonthewall.com [↩] [↩]
- UPDATE 1-Anadarko drills successful Gulf of Mexico well, Reuters [↩]