INDEPENDENTS EYE U.S., NON-U.S. PROSPECTS

Several large U.S. independent operators voice enthusiasm about acquiring prospects and producing leases at home and abroad.

Chief officers of Anadarko Petroleum Corp., Louisiana Land & Exploration Co., Noble Affiliates Inc., Apache Corp., Maxus Energy Corp., Pogo Producing Co., and Santa Fe Energy Resources Inc. aired their views at a Merrill Lynch & Co. seminar for securities analysts in New York.

ANADARKO, LL&E

Robert Allison Jr., Anadarko chairman and chief executive officer, said his company has more than replaced reserves the past decade, and its U.S. finding costs were $2.62/bbl in 1991 vs. $5.75 for the industry.

In addition to U.S. exploration, Anadarko has ventures in Canada, Algeria, Yemen, and China.

Allison said in the Gulf of Mexico "it's been difficult, with oil and gas prices what they are, to get partners to go along in drilling wells."

He said, "We don't sell natural gas at just any price in the U.S. Since 1986 we have consistently shut in gas when prices were too low.

"We have not done much long term contracting for gas either. Buyers and sellers are still a long way apart on that."

LL&E officials said their company has reduced exploration expenditures 35% this year, increasing development funding the same percentage. It plans more non-U.S. exploration in 1993. They said LL&E is encouraged about its Uranium Peak subthrust wildcat in Colorado, with ARCO as a 50% partner. The hole, on trend with Wilson Creek field, is nearing its objective.

LL&E has been boosting revenues with workovers in U.S. fields. It also has interests in France, Yemen, Australia, Papua New Guinea, and in the Brae field block in the North Sea and is trying to acquire more non-U.S. properties in basins with known potential.

NOBLE, APACHE

Noble expects to increase its oil production to 20,000 b/d by the first of the year from 18,000 b/d in September. Its 1992 gas production is up to 201.7 MMcfd at present from 178.4 MMcfd.

Robert Kelley, president and CEO, said Noble has set aside $100 million for acquisitions and has some deals pending. It particularly wants to buy properties in the Gulf of Mexico, Midcontinent, West Texas, and Canada.

Kelley said, "I still think the majors are going to try to dispose of more property in the U.S."

He said smaller independents continue to enter the Gulf of Mexico. And majors are much more inclined to let independents buy into their prospects rather than offer independents less desirable farmouts.

Noble also has exploration acreage off Equatorial Guinea, in Tunisia, and Papua New Guinea.

Apache has bought $183 million worth of properties since July 1991 and plans to sell more marginal acreage as part of its program to reduce debt. Meanwhile, it is negotiating to buy Shell Offshore Inc.'s 92.6% working interest in Matagorda Island Blocks 681 and 682 in the Gulf of Mexico for $67 million.

To maintain production, it is focusing on workovers in fields it operates.

Wayne Murdy, senior vice-president for finance, said, "Our projects tend to be short lead time prospects so we can move capital flow from year to year. We are a moderate risk driller. We are not wildcatters by any means."

In overseas ventures, Apache invests only where it believes high risk is balanced by high potential.

Raymond Plank, Apache chairman and CEO, expects U.S. majors to continue focusing their exploration outside the U.S. and to sell more of their U.S. assets.

MAXUS, POGO

Maxus, with exploration and production holdings in 14 countries, is the second largest producer in Indonesia and second largest producer and aggregator of gas in the Texas Panhandle.

Charles Blackburn, chairman, president, and CEO, said in overseas ventures Maxus tries to make low front end investments with a lot of bailout points.

"We don't commit to a lot of expenditures up front. That's how you manage risk in this business."

Maxus plans a $300 million capital spending program for the next few years.

Paul Van Wagenen, Pogo chairman, president, and CEO, said, "We're no longer a regional gas producer with all its eggs in one basket."

Although its main focus still is in the Gulf of Mexico, northern New Mexico, and South Texas, Pogo has been reducing debt and diversifying its efforts.

Pogo is active in Thailand and is seeking more non-U.S. prospects.

It also is among producers that restrict gas sales when wellhead prices are low. "We won't liquidate shareholders' assets at below market prices," Van Wagenen said.

SANTA FE

James Payne, Santa Fe chairman, president, and CEO, said his firm has focused 90% of its operations in the Jan Joaquin Valley of California, the Permian basin, and Gulf of Mexico.

Net oil production has jumped to nearly 70,000 b/d today from about 55,000 b/d early in 1991. Gas production has risen to 140 MMcfd from 90 MMcfd in the same period.

It plans to participate in 10 wildcats in six countries outside the U.S. in 1993-94. It said success in any one prospect could increase the company's reserves by 10-50%.