Anadarko Petroleum Corp., which last week set in motion anaggressive Rocky Mountain strategy, said Friday it would investC$380 million ($260 million) in its Calgary-based Canadiansubsidiary to drill 600 wells throughout western Canada in a pushto bring production there to 74,000 net boe/d in 2001.

The budget will focus on Anadarko’s core western Canadianprograms, which include the Moose Hills/Kehewin heavy oil programin northeastern Alberta, the Jean Marie gas play in northeastBritish Columbia and the Hatton shallow gas play in southwesternSaskatchewan. Year-end proved reserves for Canada in 2000 were 220MM boe.

“Anadarko has laid out an aggressive growth strategy for Canadathat ties in strategically with the company’s goal to grow itsNorth American gas business,” said Jim Emme, president of AnadarkoCanada Corp. “Our primary focus will be in our major operatingareas in Alberta, British Columbia and Saskatchewan where we planto apply new advances in exploration and drilling technologies. Inaddition to expanding our existing core areas, we will alsoincrease activity in our frontier plays in the Foothills, MackenzieDelta and the East Coast within the next two years.”

Nearly C$265 million (US$180 million) of the capital budget willbe spent on drilling development and exploratory wells. In theMoose Hills area, a 300-square kilometer (129 square miles) 3-Dseismic acquisition program is nearly completed, and the seismicdata will be used to delineate recent discoveries on about 80,000net undeveloped acres in the area. One rig will be running in theheavy oil project areas in March, with up to four by June.

Anadarko also has two active rigs in western Alberta atBlackstone and Pouce Coupe and another nine active rigs in BritishColumbia. A winter drilling program for the Hatton shallow gas playis expected to be ramped up this month, with up to three rigsscheduled. Another shallow gas program will begin this summer withsix rigs in operation.

In the Jean Marie play in northeastern British Columbia, whichis one of Anadarko’s busiest core areas, there are five exploratorywells in different stages of drilling, and a total of 15 wells areto be drilled there this season. Eight will be in production bythis summer.

Anadarko’s Canadian activity is expected to peak at 14 activerigs, 10 of which will be in northeast British Columbia. By 2002,Anadarko hopes to have 22 active rigs. However, the Houston-basedindependent also plans to grow its frontier exploration.

“The strategic combination of expanding existing plays in coreareas and significant entry into the frontier plays in theMackenzie Delta and East Coast of Canada will position Anadarkowell for future growth,” said Emme.

Anadarko holds 400,000 acres net in the Mackenzie Delta, where 9Tcf of natural gas has already been discovered by other companies.Up to 60 Tcf remains to be discovered, according to Canada’sNational Energy Board. Along the East Coast, Anadarko and itspartner BP, committed C$97 million (US$65 million) late last yearfor exploration parcel No. 6 located offshore Nova Scotia. The458,000-acre license is in deepwater, about 6,562 feet, and isabout 62 miles east of Sable Island where reserves are estimated tobe more than 3 Tcf. The work program for this parcel will bedeveloped in the second half of 2001.

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