Independent oil and gas company Anadarko Petroleum Corporation (APC) made its fourth natural gas discovery in the offshore Rovuma Basin. This natural gas discovery adds another feather to Anadarko’s series of major deepwater discoveries offshore Mozambique, over a period of time.
The discovery well at the Tubarao prospect, drilled to a total depth of 13,900 feet (4,237 meters), encountered more than 110 net feet (34 meters) of natural gas pay and no water in a high-quality Eocene-age reservoir. The well was drilled in water depths of approximately 2,950 feet (898 meters), approximately 18 miles (29 kilometers) off the Mozambique coast.
The Tubarao discovery is detached and different from the hydrocarbon accumulations in Anadarko’s three previous discoveries in the Offshore Area 1 of the Rovuma Basin. This discovery opens an entirely new play style, which has additional opportunities in Mozambique’s 2.6-million-acre Offshore Area 1. It further strengthens Anadarko’s confidence in geologic and geophysical models of the basin.
The company continues to safely enhance its drilling efficiencies, procedures and methodology in Mozambique. The company said it drilled this well in half the time required for its first exploration wells in the region.
Anadarko is the operator of the Offshore Area 1 with a 36.5% working interest. Other owners in the consortium include the Mitsui E&P Mozambique Area 1 Limited (20% interest), BPRL Ventures Mozambique B.V. (10%), Videocon Mozambique Rovuma 1 Limited (10%) and Cove Energy Mozambique Rovuma Offshore Ltd. (8.5%). Additionally, Empresa Nacional de Hidrocarbonetos E.P. carries a 15% interest through the exploration phase.
Based in The Woodlands, Texas, Anadarko Petroleum is primarily engaged in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs). Anadarko mainly competes with ConocoPhillips (COP) and Exxon Mobil Corp. (XOM).
Anadarko’s deep and diversified asset base, low-risk and predictable production profile, global business development approach and brilliant execution capability reflect upside over the medium-to-long run.
We maintain our Neutral recommendation on Anadarko shares. Also, the company retains a short term Zacks #3 Rank (Hold).
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