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StatoilHydro Builds Lower Tertiary, Brazil Stakes in $1.8B Deal

Just a day after StatoilHydro ASA announced a deal to expand its presence in U.S. natural gas markets, the Norwegian producer moved to build its presence in the deepwater Gulf of Mexico (GOM) and in Brazil in a $1.8 billion agreement with Anadarko Petroleum Corp.

Last Monday StatoilHydro agreed to purchase 1 billion cubic meters of liquefied natural gas from the Cove Point, MD, receiving terminal from 2009 to 2014 (see related story). StatoilHydro has secured all of the terminal's new capacity, which would amount to about 10 billion cubic meters of gas annually beginning next year.

The agreement announced Tuesday would give StatoilHydro sole ownership of Brazil's Peregrino field; it had held the field 50-50 with Anadarko. StatoilHydro also gains a 25% stake in one of the largest GOM deepwater discoveries, Kaskida, which is operated by BP plc. BP holds a 55% stake and Devon Energy Corp. has a 20% stake; the partners have preemption rights within 30 days.

Anadarko's nonoperated interest in Kaskida is located on Keathley Canyon Block 292 in 5,860 feet of water, which is about 250 miles southwest of New Orleans. Keathley Canyon, which is located in the Lower Tertiary trend of the deepwater GOM, has attracted a lot of interest in recent Minerals Management Service lease sales. The block in which StatoilHydro is gaining a stake was the site of the first Lower Tertiary discovery in 2006 (see NGI, Sept. 11, 2006). In the same trend and around the same time, Devon, Chevron and the former Statoil ASA completed the deepest extended drill stem test in history on the Jack No. 2 well at Walker Ridge Block 758.

StatoilHydro has been expanding its footprint in the deepwater GOM for several years. In 2006 the producer paid $700 million to acquire the working interests in two discoveries and one deepwater project from Plains Exploration & Production Co. (see NGI, Sept. 25, 2006). Potential production from its acquisition was not disclosed then, but the company estimated that the purchase would contribute to its target of 100,000 boe/d from the GOM after 2012.

Anadarko plans to use the sale to reduce debt.

"This transaction is the result of an unsolicited offer from StatoilHydro that enables us to accelerate the value of these longer-term projects while focusing our capital back into our nearer-term captured resource potential," said Anadarko CEO Jim Hackett. "With our anticipated double-digit production growth in the Rockies and the inventory of high-impact projects in our development pipeline, we are confident in our ability to achieve our targeted production growth rate of 5-9% annually -- combined with organic reserve growth -- over the next five years."

Anadarko is still committed to its deepwater exploration programs, said Hackett, who noted that the company continues to hold a considerable property base in Brazil, the deepwater GOM and offshore West Africa.

In addition to the $1.8 billion sales price, Anadarko would be paid an additional $300 million maximum pretax value for the Peregrino oilfield, to be earned by 2020 conditional on future oil prices, StatoilHydro said.

The latest transaction is in line with StatoilHydro's focus on deepwater exploration and heavy oil, and the properties significantly increase reserves and resources, said Executive Vice President Peter Mellbye.

Peregrino, which is located in the Campos Basin offshore Brazil, holds estimated reserves of around 500 million bbl and is scheduled to ramp up in 2010. StatoilHydro said it "sees significant upside in the recoverable resources" there. Plateau production of 100,000 b/d is projected to be reached within the first year.

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