Anadarko, AEC exchange Arctic holdings

Anadarko Canada Corp. and Alberta Energy Co. Ltd. have struck a complex deal in which AEC has farmed out to Anadarko a portion of its interest in two licenses in the Mackenzie Delta region of the Canadian Arctic, and Anadarko has agreed to farm out to AEC part its stake in some Alaska North Slope acreage. The exchange gives both companies a more diverse asset portfolio in a region expected to be key to supplying North American markets with much-needed natural gas.


Anadarko Canada Corp. and Alberta Energy Co. Ltd. have struck a complex deal in which AEC has farmed out to Anadarko a portion of its interest in two licenses in the Mackenzie Delta region of the Canadian Arctic, and Anadarko has agreed to farm out to AEC part its stake in some Alaska North Slope acreage. The exchange gives both companies a more diverse asset portfolio in a region expected to be key to supplying North American markets with much-needed natural gas.

Anadarko acquisition
Anadarko Canada, a subsidiary of Houston's Anadarko Petroleum Corp., is expanding its Canadian holdings by purchasing from Calgary-based AEC interests in two exploration licenses in the hydrocarbon-rich MacKenzie Delta basin region of Canada's Northwest Territories. The price paid for the 37.5% interest in two exploration licenses covering 530,000 acres was not disclosed.

"Increasing our Canadian holdings in the MacKenzie Delta fits our long- term strategy of providing natural gas to North American markets," said Robert J. Allison Jr., Anadarko chairman and CEO. "We believe Arctic gas will find its way to Canadian and American consumers through one or more of the pipelines being proposed from Canada and Alaska."

Because Anadarko also holds a significant acreage position on the Alaska North Slope, this purchase puts the company in a better position to have gas available for delivery into whatever pipeline is ultimately built, whether from Alaska or Canada or both, Allison added.

The MacKenzie Delta acquisition consists of stakes in two onshore blocks adjacent to the natural gas-rich Parsons Lake field. AEC will retain a 37.5% interest and continue serving as operator; Gulf Canada owns the remaining 25%.

The purchase augments Anadarko's previous Canadian Arctic holdings. These consist of non-operated working interests ranging from 3.4% to 24% in 10 significant discovery licenses and one production license, which, combined, cover more than 142,000 acres. This acreage includes the Amauligak field, the largest offshore field in the Canadian portion of the Beaufort Sea, says Anadarko.

Anadarko Canada recently submitted a successful bid for an exploration license on one of the MacKenzie Delta-Beaufort Sea tracts offered in the Aug. 14 lease sale by the Minister of Indian Affairs and Northern Development. Anadarko acquired a 100% working interest in Exploration License No. 407, which is centrally located in a region where 53 fields with reserves of 9 tcf of gas and 1 billion bbl of oil already have been discovered, says the firm.

The license covers about 176,000 acres and is immediately northwest of the giant Taglu field and near the AEC-Anadarko MacKenzie blocks.

AEC acquisition
In a separate deal, AEC subsidiary AEC Oil & Gas (USA) Inc. is buying from Anadarko a 33.33% working interest in Alaska North Slope acreage held under exclusive lease option by Anadarko. The lease covers 3.1 million acres under option from the Arctic Slope Regional Corp. in the Foothills region south of Prudhoe Bay. The purchase price was not disclosed. Anadarko will remain as operator, retaining a 66.67% working interest.

"This exchange of interests with Anadarko, combined with our recently announced world-class oil exploration opportunities in northern Alaska, has the potential to establish this region as a new growth platform for AEC," said AEC Pres. and CEO Gwyn Morgan, referring to a North Slope exploration and development alliance formed by AEC, Phillips Petroleum Corp., and Chevron Corp. (OGJ Online, Aug. 4, 2000). "These basins have been recognized as having world-scale resource potential with exploration opportunities that will fuel our progress toward our goal of being a global 'superindependent' oil and gas company."

Undiscovered reserves for onshore Mackenzie Delta and Alaskan foothills are estimated by government agencies at up to 40 tcf. Active gas exploration programs in both areas provide AEC with the potential to supply significant long-term gas volumes from the Northern frontiers into the North American gas market. AEC said it stands to benefit from operations in both hydrocarbon regions, regardless of whether Canadian or Alaskan gas moves to markets first.

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