HOUSTON, Jan. 22 /PRNewswire/ -- Anadarko Petroleum Corporation
(NYSE: APC), along with its partners LASMO and Maersk Oil, today announced
1998 drilling and production results for the venture's operations in the
Sahara Desert of Algeria. Anadarko's operations in Algeria are conducted in
partnership with SONATRACH, the country's national oil and gas enterprise.
During 1998, Anadarko and its partners commenced first oil production and
recorded the highest level of drilling activity since work began in the
program in 1989. Key events for the year include the following:
-- Anadarko and its partners completed a record 21 exploration,
delineation and development wells on Blocks 404 and 208 in 1998. By
comparison, the group drilled 33 total wells in the project between
1991-1997. Up to five drilling rigs were active in field delineation
and development drilling during 1998.
-- 18 of the 21 wells drilled in 1998 were successful. The breakdown is
as follows: one exploration prospect was drilled and was successful --
the El Merk North discovery was announced in March 1998 (details
below). Ten delineation wells were drilled with eight successful. Ten
development wells were drilled with nine successful.
-- First oil production began May 4, 1998, from Stage I facilities at the
Hassi Berkine South (HBNS) Field. Current production from the HBNS
field is about 55,000 barrels of oil per day (gross) and is moving to
market through SONATRACH's new 30-inch oil pipeline which became
operational in December 1998.
-- During 1998, about 1.4 million barrels of oil were produced net to
Anadarko. Two cargoes of crude were lifted and sold to a major
refiner in southern Europe. Other partners lifted separate cargoes.
-- In 1998, Anadarko and its partners acquired 941 square kilometers (363
square miles) of 3-D seismic data essential for future development of
new field discoveries in Algeria. According to the seismic
contractor, the 3-D seismic survey across Blocks 208 and 405 in the
Sahara is the world's largest 3-D seismic acquisition program ever
undertaken on land.
-- In November 1998, Anadarko submitted, for approval by SONATRACH,
detailed field development plans (called Commerciality Reports)
covering nine recent discoveries. When Algerian authorities approve
these plans, Exploitation Licenses will be issued for field
development.
-- Recently, SONATRACH said that Anadarko and its partners are not
entitled to share in future production from four wells -- the EMN-3,
EME-4, EKT-3 and HBNS-16; results of these wells are discussed below.
Anadarko strongly disagrees with SONATRACH's position and discussions
to resolve this dispute are underway (See Further Information, below).
-- On Blocks 401a and 402a, operated by BHP Petroleum (Algerie), Inc.,
six wells were drilled. Three exploratory wells were drilled with two
discoveries (BSF and SFNE) and three delineation wells were drilled
(all dry holes). The companies acquired 574 kilometers of 2-D seismic
data for use in future exploration and field development. The
partners plan to drill additional delineation wells in 1999 and one
exploration well is currently drilling.
Under a Production Sharing Agreement (PSA), Anadarko has a 50% interest
covering Blocks 404 and 208, before participation at the exploitation phase by
SONATRACH. The Company's two partners in this PSA are LASMO Oil (Algerie)
Limited and Maersk Olie Algeriet AS. Under the terms of the agreement, liquid
hydrocarbons discovered, developed and produced will be shared by SONATRACH,
Anadarko and its two partners. Under a separate PSA, Anadarko has a
27.5% interest in the Blocks 401a and 402a which are operated by BHP. The
Company's other two partners are LASMO and Maersk.
Background Fact Sheet on major Fields in Algeria:
The Hassi Berkine South Field - HBNS
-- To date, 15 development wells have been drilled in the HBNS Field.
Two drilling rigs are currently being used solely for development
drilling operations.
-- Bids were received and opened in late 1998 for construction of
Stage II production facilities at the HBNS Field. By the end of
1999's first quarter, Anadarko expects to award an Engineering,
Procurement and Construction contract for the Stage II facilities,
which will increase production from the HBNS Field to 135,000 barrels
of oil per day (BOPD) beginning in 2001.
-- Development drilling will continue in 1999 at the HBNS Field.
-- The HBNS-6 well encountered 25 meters (82 feet) of pay and tested
7,442 BOPD of 41.5 degree API gravity oil and 8.5 MMcf/d of gas.
-- The HBNS-7 well encountered 24 meters (77 feet) of pay and tested
3,708 BOPD of 42 degree API gravity oil and 4.3 MMcf/d of gas.
-- The HBNS-8 well encountered 31 meters (102 feet) of pay and tested
3,513 BOPD of 41.5 degree API gravity oil and 3.6 MMcf/d of gas.
-- The HBNS-9 well encountered 22 meters (73 feet) of pay and tested
3,712 BOPD of 42.1 degree API gravity oil and 3.9 MMcf/d of gas.
-- The HBNS-10 well encountered 7 meters (23 feet) of net oil pay and
tested 1,877 BOPD of 44.5 degree API gravity oil and 2.3 MMcf/d of
gas.
-- The HBNS-11 well encountered 27 meters (87 feet) of net oil pay and
tested 7,293 BOPD of 41.8 degree API gravity oil and 8.3 MMcf/d of
gas.
-- The HBNS-12 well encountered 14.3 meters (47 feet) of net oil pay and
is preparing to test.
-- The HBNS-13 well did not encounter hydrocarbon pay and was suspended
for use as a future water injection well.
-- The HBNS-16 well encountered 11.2 meters (37 feet) of net oil pay.
-- The HBNS-17 well did not encounter hydrocarbon pay and was plugged and
abandoned.
-- HBNS-14 and 15 are currently drilling.
The Hassi Berkine South East Field - HBNSE
-- HBNSE-2 delineation well was drilled three kilometers (two miles) from
the HBNSE-1 Field discovery well and tested 3,915 BOPD and 47 degree
API gravity oil and 12 MMcf/d of gas.
-- The HBNSE-1 well is located only 10 kilometers (6.2 miles) southeast
of the Central Production Facility for the HBNS Field. The HBNSE-1
well flowed 17,092 BOPD.
-- Anadarko and its partners have submitted a Commerciality Report for
the HBNSE Field to SONATRACH.
The El Merk North Field - EMN
-- Located on Block 208, the EMN-3 well encountered 22 meters (72 feet)
of net hydrocarbon pay in four separate zones. Flow rates from each of
the zones are as follows:
- Test No. 1 -- 2,764 BOPD, 42 degree API gravity and 4.3 MMcf/d of
gas
- Test No. 2 -- 2,100 barrels of condensate per day (BCPD), 55
degree API gravity and 30.5 MMcf/d of gas
- Test No. 3 -- 1,025 BCPD, 51 degree API gravity, and 53.6 MMcf/d
of gas
- Test No. 4 -- 677 BCPD, 57 degree API gravity and 10.7 MMcf/d of
gas.
-- The EMN-3 well was drilled as a delineation well to the EMN-1 Field
discovery well, located about 12.5 kilometers (8 miles) northeast.
-- A second field delineation well, the EMN-2 , encountered 15 meters
(49 feet) of net hydrocarbon pay in three separate intervals. Flow
rates from each of the zones are as follows:
- Test No. 1 -- 726 BOPD, 48 degree API gravity and 0.3 MMcf/d of
gas
- Test No. 2 -- 2,332 BOPD, 47 degree API gravity and 1.3 MMcf/d of
gas
- Test No. 3 -- 215 BCPD, 58 degree API gravity and 11.9 MMcf/d of
gas.
-- The EMN-2 well was drilled about 4.5 kilometers (2.8 miles) southwest
of EMN-1, which encountered 36 meters (119 feet) of net pay in the
Triassic formation and flowed 21,395 BOPD, the highest flow rate
achieved by Anadarko and its partners in Algeria.
-- Based on these three wells, Anadarko and its partners have submitted a
Commerciality Report to SONATRACH for the EMN Field.
The El Kheit Et Tessekha Field - EKT
-- The EKT-3 well, located in the northwest corner of Block 208,
encountered 7 meters (23 feet) of net hydrocarbon pay and tested 5,919
BOPD of 45 degree API gravity oil and 2.5 MMcf/d of gas from a single
zone. The delineation well was drilled about 3 kilometers (2 miles)
southwest of the EKT-1 field discovery well.
-- The EKT-2 delineation well was drilled 6 kilometers (4 miles)
northeast of the EKT-1 well and was a dry hole. A third delineation
well, EKT-4, was drilled 2 kilometers (1.2 miles) south of EKT-1 and
did not encounter hydrocarbon pay and has been suspended.
-- Anadarko and its partners have submitted a Commerciality Report to
SONATRACH for the EKT Field.
The El Merk/El Merk East/El Merk Central Complex - EMK/EME/EMC
-- Located in the southwest corner of Block 208, the EME-4 well was
drilled approximately 11.9 kilometers (7 miles) from the EME-1 Field
discovery well, announced in February 1994. The EME-4 well
encountered 48.4 meters (159 feet) of net hydrocarbon pay in three
separate zones. Flow rates from each of the zones are as follows:
- Test No. 1 -- 1,337 BCPD, 55 degree API gravity and 16.9 MMcf/d of
gas
- Test No. 2 -- 5,058 BCPD, 53 degree API gravity and 21.9 MMcf/d of
gas
- Test No. 3 -- 2,458 BCPD, 57 degree API gravity and 25.2 MMcf/d
of gas.
-- The EME-3 delineation well encountered 11 meters (34 feet) of net
hydrocarbon pay and tested 4,996 BOPD of 42 degree API gravity oil and
6.5 MMcf/d of gas from a single zone.
-- The EMK-3 delineation well was drilled about 10 kilometers (6.2 miles)
southwest of EMK-1 and encountered 28 meters (92 feet) of net
hydrocarbon pay in three separate zones. Flow rates from each of the
zones are as follows:
- Test No. 1 -- 528 BCPD, 58 degree API gravity and 13.2 MMcf/d of
gas
- Test No. 2 -- 2,198 BOPD, 42 degree API gravity and 3.4 MMcf/d of
gas
- Test No. 3 -- 1,178 BCPD, 59 degree API gravity and 10.9 MMcf/d
of gas.
-- Based on the results of these wells, Anadarko and its partners have
submitted a Commerciality Report to SONATRACH for the EME and EMK/EMC
fields.
Further Information Regarding EMN-3, EME-4, EKT-3 and HBNS-16
-- Anadarko has been notified that SONATRACH believes Anadarko and its
partners are not entitled to share in future production from the
EMN-3, EME-4, EKT-3 and HBNS-16 wells. SONATRACH said its position is
based on a view that the productive intervals in these four wells are
not connected to reservoirs previously discovered by Anadarko and its
partners.
-- Anadarko strongly disagrees. The Company's position is that partners
should share in reserves and future production from these four wells
because the wells were drilled according to the terms of the PSA with
proper approval from SONATRACH, and because the four wells were
drilled to delineate or to develop discoveries previously made.
Nevertheless, the potential reserves, future production and potential
value related to these wells are not significant to the overall
reserves, expected future production or overall value of Anadarko's
Algeria project.
-- Anadarko and SONATRACH currently are discussing the status of these
four wells and the resolution of this dispute.
The Berkine Northeast Field - BKNE
-- The BKNE-2 delineation well, located on Block 404 about 18 kilometers
(11 miles) northwest of the Qoubba Field, encountered 15.4 meters (51
feet) of net hydrocarbon pay. The BKNE-2 well tested 4,624 BOPD of 49
degree API gravity oil and 17.2 MMcf/d of gas. The well was drilled 5
kilometers (3 miles) from the BKNE-1 Field discovery well, drilled in
May 1996.
-- Anadarko and its partners have submitted a Commerciality Report to
SONATRACH for the BKNE Field.
The Rhourde Berkine Field - RBK
-- The RBK-2 delineation well, located about 14 kilometers (9 miles)
north of the Qoubba Field, encountered 15.8 meters (52 feet) of net
hydrocarbon pay. The RBK-2 well tested 968 BOPD of 36 degree API oil
and 0.2 MMcf/d of gas. The RBK-2 well was drilled about 6 kilometers
(3.7 miles) north of the RBK Field discovery well.
-- The well was drilled to delineate the March 1997 Field discovery well,
RBK-1. Anadarko and its partners have submitted a Commerciality
Report to SONATRACH for the RBK Field.
Qoubba Field Development - QB
-- In the southern portion of Block 404, SONATRACH drilled and completed
the QB-2 development well, the first development well drilled in the
Field this year. The QB-2 well encountered 50 meters (164 feet) of
net hydrocarbon pay. The QB-2 well is located about 15 kilometers (10
miles) from the BKE-1 Field discovery well.
-- The second Qoubba development well, QB-1, has recently been drilled
and encountered 46 meters (152 feet) of net hydrocarbon pay. The QB-1
well was drilled about 10 kilometers (6.2 miles) southwest of the
BKE-1 Field discovery well.
-- A third well -- the QB-3 -- is presently drilling on the Block 404
portion of the field.
-- Development drilling will continue in 1999 at the QB Field and a
Commerciality Report was filed with SONATRACH in July 1997.
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Anadarko believes that its expectations are based on
reasonable assumptions. No assurances, however, can be given that its goals
will be achieved. See Additional Factors Affecting Business in the
Management's Discussion and Analysis (MD&A) included in the Company's 1997
Annual Report on Form 10-K.
For more information about Anadarko's worldwide operations, please visit
our web site at http://www.anadarko.com on the Internet.
SOURCE Anadarko Petroleum Corporation
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CONTACT:
analysts and investors, A. Paul Taylor, Jr.,
281-874-3471, or Steve C. Campbell, 281-874-3260, or media, Carol
L. Cox, 281-873-3855, all of Anadarko Petroleum Corporation
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