Oil and natural gas exploration and production company, Anadarko Petroleum Corporation (APC), announced that its exploration well, Mercury 1, has discovered oil in offshore Sierra Leone.
The exploration wells were drilled in offshore Sierra Leone-Liberian Basin at a total depth of approximately 15,950 feet in about 5,250 feet of water. Anadarko expects the well to have 135 net feet of oil pay in two Cretaceous-age fan systems.
The new discovery is located in offshore block SL-07B-10, which is around 40 miles east-southeast of Anadarko’s previously announced Venus discovery. Anadarko has a 65% working interest in this block.
Anadarko has additional working interest in other fields in this region following the completion of its operations in the Mercury well. The company will move its drillship to Ghana to speed up work at the Owo and Tweneboa fields, which the company anticipates sanctioning in 2011.
The company continues to swell its existing reserves through discovery of oil and gas in areas it has a working interest. The other recent discoveries include a 416 net feet of natural gas pay, in the Offshore Area 1 of Mozambique’s Rovuma Basin, discovered on October 19, 2010, and a 115 net feet of oil pay in the Owo-1 sidetrack well offshore Ghana, found on September 13, 2010.
The adjusted earnings of Anadarko at the end of the third quarter 2010 were 21 cents a share compared with a net loss of 11 cents in the year-ago comparable period. The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 are 21 cents per share, $1.78 per share and $2.12 per share, respectively.
Anadarko currently retains a Zacks #3 Rank (short-term Hold rating). The present constrained commodity environment and the drilling moratorium will likely have a negative impact on the company’s performance in the near term. Hence, we maintain a Neutral rating on the stock.
One of Anadarko’s major peers, BP Plc (BP), returned to profit in the third quarter 2010, after incurring huge losses during the second quarter because of the Gulf of Mexico oil spill.
Based in Texas, Anadarko Petroleum is an independent oil and gas company engaged in the acquisition, exploration and production of oil and gas primarily in the United States, the deepwater Gulf of Mexico, and Algeria. The company ended 2009 with a proved reserve of 2.3 billion barrels equivalent.
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