LINN Energy LLC, Houston, will fund $400 million of Anadarko Petroleum Corp.’s future development costs in giant Salt Creek oil field in Wyoming in exchange for being assigned a 23% interest in the carbon dioxide enhanced oil recovery project.
LINN Energy said it expects to invest $600 million overall in the next 3-6 years, including $200 million net to its assigned interest.
Salt Creek field averaged 10,800 b/d of oil in March, according to Wyoming Oil & Gas Commission statistics. Anadarko acquired the field in 2003, when production averaged 5,000 b/d for the year, and has been injecting CO2 since 2004.
Further development is expected to double current production by 2015, LINN Energy said. The company also believes it could apply knowledge and technology from Salt Creek to several of its existing legacy fields.
Mark Ellis, LINN Energy chairman, president, and chief executive officer, said, “We believe this long-life asset is unique because it is expected to deliver 10 years of steady production growth while, at the same time, providing a low base-decline rate. In addition, CO2 can potentially be used to enhance recovery in other reservoirs and portions of the field.”
LINN Energy listed characteristics expected from the joint venture:
• Average net production of 1,600 b/d of oil in the first 12 months.
• Net production of 3,800 b/d by 2016.
• Estimated reserve life of 28 years.
• Low base-decline rate of less than 7%.
• Total capital, including Anadarko’s interest, of $270 million in the first 12 months.
• Maintenance capital of $5 million to $15 million in the first 12 months.
• About 1 billion gross bbl of oil remaining in place.
• Some 4,000 gross wells and more than 22,000 gross acres.