Anadarko to drill 600 wells in Western Canada this year

Anadarko Petroleum Corp. said Friday it plans to invest $380 million (Can.) this year through Anadarko Canada Corp. to drill 600 wells in Western Canada. About $265 million (Can.) of the capital budget will go for development and exploratory wells.

HOUSTON, Feb. 9�Anadarko Petroleum Corp. said Friday it plans to invest $380 million (Can.) this year through Anadarko Canada Corp. to drill 600 wells in Western Canada, mostly on gas prospects.

The company expects its 2001 Canadian production at 74,000 boe/d.

Operators drilled an estimated 16,596 holes in 2000 (OGJ, Jan. 29, 2001, p. 86).

Jim Emme, president of Anadarko Canada, said, "Our primary focus will be in our major operating areas in Alberta, British Columbia, and Saskatchewan, where we plan to apply new advances in exploration and drilling technologies. In addition to expanding our existing core areas, we will also increase activity in our frontier plays in the Foothills, Mackenzie Delta and the East Coast within the next 2 years.''

Anadarko's core Western Canadian programs include the Moose Hills/Kehewin heavy oil program in Northeastern Alberta, the Jean Marie gas play in Northeast British Columbia, and the Hatton shallow gas play in southwestern Saskatchewan.

About $265 million (Can.) of the capital budget will go for development and exploratory wells. In the Moose Hills area, a 300 sq km 3D seismic program is close to completion. The data will be used to delineate recent discoveries on 80,000 net undeveloped acres. The company will have one rig running in the heavy oil project areas in March and up to four rigs by June.

The company also has two rigs active in Western Alberta at Blackstone and Pouce Coupe, and nine active rigs in British Columbia. A winter drilling program for the Hatton shallow gas play is expected to begin mid-February, with up to three rigs scheduled. A shallow gas program is planned for the summer with up to six rigs.

Northeastern British Columbia is one of Anadarko's busiest core areas, and an active drilling season is under way in the area. The Jean Marie play is one of British Columbia's most active plays, with more than 700 bcf of recoverable gas reserves discovered by the industry to date.

In the late fall of 2000, one of the Anadarko's Jean Marie dual horizontal exploratory wells produced at an average test rate of 6 MMcfd while drilling. One follow-up well was drilled with similar test results, and a third well was completed in late January, with testing to begin shortly.

Within the Jean Marie play, Anadarko had five exploratory wells in different stages of drilling. At the peak of this year's winter drilling program seven rigs will be in operation. A total of 15 wells are expected to be drilled in the Jean Marie this season, with eight of those expected to be on production by summer 2001.

Exploration is under way in the Jedney/Buckinghorse area in Northeast British Columbia, adjacent to the Jean Marie play. The company completed an all-weather road in late 2000 prior to the start of drilling to ensure year-round access to the area. The 44-a Buckinghorse well tested at a stabilized rate of 5.5 MMcfd and a second well is drilling. Five development wells will be drilled in the Jedney/Buckinghorse area in 2001. Significant outpost exploration wells at the Conroy and Kobes projects are drilling.

In the coming months, Anadarko's Canadian activity is expected to peak at 14 active rigs, 10 of which will be in Northeast British Columbia. In 2001-2002, this is expected to increase to 22 rigs.

Beyond its core operations in Western Canada, Anadarko's growth strategy for 2001 includes a focused effort on frontier exploration.

In the Mackenzie Delta, Anadarko holds a net 400,000 acres where 9 tcf has been discovered by others, and up to 60 tcf remains to be discovered, according to National Energy Board estimates.

Anadarko said the most significant of the company's acreage in the north consists of two onshore blocks adjacent to Parson's Lake gas field, with partners Alberta Energy Co. Ltd. and Gulf Canada Ltd. It also holds an exploration license immediately northwest of giant Taglu field. The company expects to acquire seismic data this winter and have drillable prospects in these areas by 2002.

On the East Coast, Anadarko, and its partner BP, committed $97 million (Can.) in late 2000 for Exploration Parcel No. 6 in the Scotian offshore. The 458,000-acre license is in 6,562 ft of water 100 km east of Sable Island, where resources are estimated at more than 3 tcf. A work program for the parcel will be developed in the second quarter.

Anadarko Canada's yearend 2000 proved reserves were 220 million boe.

Anadarko Corp. has already announced plans to double spending to $131 million (US) in the Rocky Mountain area (OGJ Online, Feb. 6, 2001).

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