Anadarko Petroleum Corp. and Chevron U.S.A. Inc. have begun a joint exploration venture on 200,000 net mineral acres Chevron owns within the Delaware Basin of West Texas, acreage that overlaps and extends westward from Anadarko’s existing leasehold, which includes the rapidly growing Haley natural gas field. The targeted area, noted Anadarko, has already produced a cumulative 2 Tcf of natural gas.
Under the agreement, Anadarko will serve as operator and earn up to a 100% working interest in the Chevron-owned acreage. Chevron will retain royalty interests on its mineral acres, as well as hold an option to take up to a 25% working interest in each well. No financial details were disclosed.
“Anadarko has ramped up our gross operated gas production in the Haley field from zero in 2003 to 175 MMcf/d currently, making it one of our largest and fastest-growing onshore gas plays,” Anadarko Senior Vice President Karl Kurz said. “The new venture with Chevron will allow us to apply our play concept farther westward, with the Chevron acreage essentially more than doubling our net land position in the highly prospective Delaware Basin.”
Anadarko’s existing holdings in the region total 264,000 gross acres (140,000 net), of which the Haley field represents about 60,000 gross acres (44,000 net).
“The Pennsylvanian zones we are targeting in the Delaware Basin have already produced a cumulative 2 Tcf of natural gas, and we believe more than 10 Tcf of gross resource potential remains just on our captured land position, inclusive of the Chevron acreage,” Kurz said. “We expect to be operating as many as 13 drilling rigs in the region by year-end, up from the six rigs we had working through May and the nine rigs currently drilling in the play.”
The ramped-up activity, said Kurz, “allows for continued development of the Haley field, where we have grown gas production nearly 50% so far this year, as well as the drilling of three to five significant exploration wells in 2006, which could include our first test of the Chevron acreage.”
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