Daily GPI / NGI All News Access

Anadarko in Gulf With Texaco, Has Strong 2Q

Anadarko in Gulf With Texaco, Has Strong 2Q

Anadarko Petroleum Corp. is gaining Gulf of Mexico sub-salt exploration rights through an agreement with Texaco Exploration and Production Inc. Anadarko also just announced significantly improved second quarter results and a nearly 60% boost to its current capital spending program.

Anadarko will acquire rights to future exploration in certain depths on 82 lease blocks in which Texaco has interests. The tracts are located offshore Louisiana, where water depths range from 85 to 2,400 feet. The 82 blocks make up about 400,000 gross acres.

"The agreement with Texaco represents an important addition to Anadarko's sub-salt exploration portfolio," said John N. Seitz, Anadarko president. "This relationship doubles our acreage in the sub-salt trend, which was one of our major objectives for 1999. We are planning to move aggressively on these blocks with seismic and drilling activities. With this agreement, we now have more running room in this very successful and economic play."

Anadarko's working interests in new prospects that it identifies and drills will vary depending on current Texaco partners. As part of the agreement, Texaco has the option to retain a working interest in each exploratory prospect by participating in the initial exploration well drilled by Anadarko. Texaco has an average working interest of 50% in the 82 blocks, which are subject to the agreement. Financial terms of the agreement were not disclosed. The transaction is expected to close by the end of July.

"This agreement allows Texaco to increase its exploration activity in the Gulf of Mexico and leverage the assessment of this sub-salt acreage earlier than anticipated," said Matt Cabell, vice president for exploration of Texaco's Gulf unit.

Encouraged by improved commodity prices and cost-cutting initiatives, Anadarko upped its capital spending budget by nearly 60% from $410 million to $650 million.

"We plan to accelerate activity in both exploration and development-primarily gas development projects," said Robert J. Allison Jr., Anadarko CEO.

"We now expect that our production volumes in 1999 will be at least level with 1998. However, today's higher commodity prices should give us significantly better financial results this year-cash flow could be 20% higher than 1998. And we're moving quickly to reinvest these dollars in projects that will begin to contribute to Anadarko's production volumes over the next several months."

Anadarko's second quarter gas production averaged 461 MMcf/d, essentially level with the same period in 1998. The company's wellhead price for gas was $1.95/Mcf for the second quarter of 1999, off slightly from $1.98/Mcf a year ago. Anadarko reported net income of $8 million on $161.5 million of revenues in 2Q99, compared to net income of $2.7 million on $137.6 million of revenues in 2Q98.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus