Anadarko Corp. (NYSE:APC) announced that it had made a light oil discovery off the coast of Côte d’Ivoire.  The new find off the West African coast, adds to the list of wells that Anadarko has discovered in the region. The well is located in the CI-103 block and was drilled at a water depth of more than 2,000 meters. Anadarko has made a number of successful discoveries in Western Africa, which include the Jubilee well off Ghana and Mercury, Venus and Jupiter discoveries off the coast of Sierra Leone.  The company is now exploring blocks in Cote d’Ivoire and Liberia to add to its growing list of prospects in the region.
We have a $90 price estimate for Anadarko Corp., which is at a 45% premium to its current market price.
Anadarko owns a 40% working interest in the CI-103 block where the latest discovery was made.  The appraisal well encountered 31 net meters of oil pay, at a total depth 5090 meters. According to the company’s presentation. Anadarko plans to drill around 8-10 exploration and appraisal wells in western coast of Africa and holds 7 MM gross acres in the region. The explorer estimates that the West African region may hold up to 1 Billion Barrels of Oil Equivalent (BBoE) in bet risked resources.  In addition to discoveries off West Africa, Anadarko has also made significant discoveries in the eastern coast of the continent, particularly in Mozambique, where the company is developing the giant Prosperidade field.
In an effort to reduce its exposure to low gas prices in the U.S., Anadarko is actively pursuing opportunities to increase its liquids output. The company is targeting oil rich plays in the U.S. as well as deepwater prospects in the U.S. Gulf of Mexico and other regions around the world. The company is also planning to begin production at a number of offshore sites in a number of prospects over the next couple of years including the El Merk project in Algeria and The Lucius project in the U.S. GoM.  With its strong reserve replacement record, Anadarko expects to increase its output at a compounded rate between 5-9% over the next few years.Notes: