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Lucius Sidetrack May Confirm 'Major' Deepwater Discovery

A deepwater Gulf of Mexico (GOM) sidetrack appraisal well south of the Lucius discovery well in Keathley Canyon Block 875 appears to confirm a "major discovery with substantial resource potential," an executive with Anadarko Petroleum Corp. said Wednesday.

The Lucius discovery well was announced in December by Anadarko and its partners (see NGI, Dec. 14, 2009). Anadarko operates the Lucius well with a 50% stake; co-owners are Plains Exploration & Production Co. (33.33%) and Mariner Energy Inc. (16.67%).

The sidetrack well encountered almost 600 net feet of oil pay with additional natural gas condensate pay in thick subsalt Pliocene and Miocene sands, said Bob Daniels, Anadarko senior vice president of Worldwide Exploration.

"We were very encouraged by what we saw in the discovery well, and the results from this appraisal further heighten our enthusiasm," Daniels said. "The reservoirs are characterized by excellent porosity and permeability and contain high-quality oil. We anticipate additional appraisal activity in 2010 as we continue to evaluate development options for this very large accumulation."

The appraisal well was drilled as an up-dip sidetrack, about 3,200 feet south of the Lucius discovery, and was drilled to a total depth of 20,600 feet in 7,100 feet of water. The Lucius discovery well was drilled to a total depth of about 20,000 feet and encountered more than 200 net feet of pay.

Once operations are complete at the Lucius appraisal well, Anadarko plans to move the rig to drill an appraisal of Anadarko's subsalt Miocene Heidelberg discovery in the Green Canyon area of the GOM, which was announced in early 2009 (see NGI, Feb. 9, 2009).

Anadarko also operates Heidelberg and holds a 44.25% working interest, while Mariner Energy Inc. and Eni S.p.A. each holds a 12.5% stake. Statoil ASA holds a 12% stake; ExxonMobil Corp. and Cobalt International Energy LP each hold a 9.375% interest in the prospect.

The results of the Lucius sidetrack well "were absolutely stellar," said Motley Fool energy analyst Toby Shute. Compared with the initial discovery, the sidetrack well "found roughly three times as much net oil pay, with an extra gas condensate trove to top it off...The initial well thus only hinted at the total prize in Keathley Canyon.

"How much could Lucius be worth?," asked Shute. He suggested that investors take a look at Mariner's trading for a hint. Mariner, which holds almost a 17% stake in the well, saw its shares shoot up almost 16% the day that the sidetrack results were announced last Wednesday. "That's $217 million of added share value. I take that as the market saying Lucius is worth $1.3 billion more than it was the day before."

Shute said Anadarko also "should be front and center on anyone's deepwater radar. Not only is the company hitting home runs here at home, but offshore Brazil and West Africa as well...As for Mariner, riding Anadarko's coattails on discoveries like Lucius and Heidelberg may be the best move this company has ever made."

Anadarko also is readying its Phobos prospect, which is three blocks south of Lucius. Anadarko and Plains each holds half of that prospect. "Given these companies' recent luck, expect it to be a gusher," said Forbes.

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