Anadarko Petroleum Corp. apparently is soliciting bids for all of its operated coalbed methane (CBM) assets in the Atlantic Rim project in Wyoming, according to Warren Resources Inc., which says it has a partnership interest and preferential rights on Anadarko’s share.
Warren executives indicated the assets were for sale in a press release detailing Warren’s 2Q2012 operations. Warren’s management team also elaborated on the possible sale during an earnings conference call on Tuesday. Warren is a working partner in the Anadarko-operated Spyglass Hill Unit in the Eastern Washakie Basin in Wyoming, which covers around 113,000 acres in the Doty Mountain, Sun Dog, Jack Sparrow and Brown Cow units.
Anadarko had no comment about the sale. The producer wrote down $978 million in 2Q2012 in part because of low natural gas prices for CBM (see Daily GPI, Aug. 1).
Anadarko has “solicited and received bids to sell its assets in the Atlantic Rim, including all of their operated CBM assets, 50% interest in the midstream gathering, compression and pipeline assets (Warren owns the other 50%), and mineral rights in the deeper formations prospective for Niobrara oil,” according to Warren. “Once Warren is notified by Anadarko of the results of the bids, the company will make a decision regarding exercising its preferential rights to purchase an interest in Anadarko’s CBM assets, their share of the midstream assets and deep mineral rights.”
Warren CEO Espy P. Price told energy analysts during the conference call that the company is “looking” at the Anadarko assets for sale as part of its future plans to work in the Niobrara and Green River formations.
“We certainly don’t have any plans to do anything,” Price said. “As far as the deep potential at this point, we are curious as to see what Anadarko does and the other operators in the area. We feel like we are in a good position with our leases there and we are just trying to get additional data all of the time, but we certainly don’t have plans to do any deep testing.”
The Atlantic Rim has long been on the to-do list for Anadarko and several other U.S. producers. The Atlantic Rim Project Area (ARPA), which comprises more than 270,000 acres of land in south-central Wyoming, has been under development since the 1950s. In 2001 a consortium of producers that ultimately included Anadarko, Warren and Double Eagle Petroleum Co. submitted a proposal to the Bureau of Land Management (BLM) to drill more than 3,880 gas wells in the ARPA. The project has been expected to produce 1.35 Tcf over its 30-50 year life span.
Following several years of study the BLM in May 2007 issued a record of decision for the Atlantic Rim Final Environmental Impact Statement (see Daily GPI, May 22, 2007). However, the ROD has been challenged several times in the courts by conservation groups. Last year a federal environmental assessment (EA) determined there would be no significant impact from developing 51 CBM wells within the ARPA (see Daily GPI, July 8, 2011). The EA was required because portions of the project are within year-round crucial winter range for pronghorn antelope and mule deer.
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