Independent oil and gas company, Anadarko Petroleum Corporation (APC) reported promising results at its Owo-1 sidetrack well, confirming the existence of a significant oil accumulation in the region. The company has discovered additional 115 net feet of oil, including 52 net feet of high-quality oil at its Owo-1 sidetrack well, which compliments production at the Owo-1 discovery well.
Apart from the additional oil discovered, the Owo-1 sidetrack well also came across an additional 43 net feet of condensate and 20 net feet of natural gas in a deeper sandstone section.
The Owo-1 sidetrack is located about 2,000 feet to the east of the Owo-1 discovery well in the Deepwater Tano Block, offshore Ghana. The well was drilled to a total depth of nearly 13,120 feet in the Deepwater Tano Block. To date, the company has witnessed more than 225 net feet of high-quality oil pay and a gross oil column of more than 655 feet, collectively, at the Owo-1 discovery well and the Owo-1 sidetrack well.
The deepwater Tano Block is jointly owned by Tullow Oil, Europe’s largest independent oil explorer by market value (49.95% working interest, Operator), Anadarko (18% working interest), Kosmos Energy (18% working interest), Sabre Oil & Gas (4.05% working interest) and the Ghana National Petroleum Corporation (10% carried interest).
Anadarko believes that the Owo field offers another promising oil development project for the partnership as well as for the Republic of Ghana. Further, this field depicts the potential of Anadarko’s large acreage position in the West African Cretaceous Trend, where the company owns more than 7 million gross acres.
Looking ahead, the company expects to actively continue its exploration and appraisal drilling program in the trend by mobilizing the Deepwater Millennium drillship from Brazil. Additionally, the company expects to start drilling a second exploration well offshore Sierra Leone in the third quarter.
Texas-based 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). The company’s mission is to deliver a competitive and sustainable rate of return to shareholders by exploring, acquiring and developing oil and natural gas resources.
The company aims to achieve over 3 billion barrels of oil equivalent (BBOE) of proved reserves in five years, dig roughly 30 deepwater exploration and appraisal wells in 2010, make six significant discoveries by 2016, and maintain a strong balance sheet.
For full year 2010, the company expects sales volumes in the range of 232– 236 million barrels of oil equivalent (MMBOE) and 55– 58 MMBOE range for the third quarter. Capital spending for 2010 is estimated in the range of $5.17– $5.47 billion.
Currently, we have a short-term Zacks #3 Rank (Hold) on the stock. We retain our long-term Neutral recommendation on Anadarko.
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