HOUSTON, Feb. 1 /PRNewswire/ -- The Board of Directors of Anadarko
Petroleum Corporation (NYSE: APC) have approved a capital spending program
totaling $2.8 billion for 2001, representing a 65 percent increase over
capital outlays in 2000.
"Natural gas is and will continue to be in tremendous demand in North
America," said Robert J. Allison, Jr., Chairman and Chief Executive Officer.
"Therefore, the primary focus of this 2001 budget is to find new natural gas
reserves and increase gas production in the Lower 48, the Gulf of Mexico and
in Canada.
"Given our current outlook for commodity prices, we expect Anadarko's cash
flow to be significantly higher than this initial spending plan," Allison
said. The company is looking at potential uses for additional capital,
including acquisitions of producing properties in core operating areas,
improvements to the Company's balance sheet, repurchase of common stock and
other strategies. "We'd like to have that cash in hand before we commit to a
specific plan," Allison said.
More than half of this year's capital budget is earmarked primarily for
ongoing development drilling and construction to increase production from
existing fields in Texas, the Gulf of Mexico, the Rockies, Western Canada, the
North Slope of Alaska and Algeria.
Roughly 30 percent of the capital budget will be spent on ongoing
exploration programs primarily in the sub-salt and deep waters of the Gulf of
Mexico, Canada and in Texas, but also on new prospects in the North Atlantic,
West Africa, Tunisia, Australia and the former Soviet Republic of Georgia.
Another 5 percent is budgeted for construction of plants, gathering and
treating facilities and pipelines.
"Anadarko has set ambitious performance goals for the company in 2001.
This is the capital spending plan that will get us there," Allison added. "To
achieve our goal of double-digit growth in production, we need to produce
almost 200 million barrels equivalent. We want to both grow our reserves by
10 percent and add reserves at costs below the industry average.
"The diverse portfolio of opportunities we have will enable us to allocate
capital in a way that will maximize our production and reserve growth," he
added.
Development
Anadarko has allocated $1.4 billion to development, with 79 percent
dedicated to projects in North America, another 12 percent to development
drilling and construction of production facilities in Algeria, and the
remainder to other international ventures, most notably in Venezuela.
The company plans to spend approximately $420 million to continue
development drilling and build additional infrastructure in the Bossier field
in East Texas and North Louisiana, where net gas production is expected to
reach 90 Bcf in 2001, compared to 60 Bcf in 2000. Approximately
186 development wells are planned in the Bossier play this year.
The company also plans significant gas drilling below the Austin Chalk oil
play in Central Texas in the Georgetown, Buda and Glenrose formations.
More than $100 million is budgeted for development drilling in this play,
where 90 net wells are planned for 2001, the majority of which will be
re-entries and recompletions of existing Austin Chalk wells.
Offshore, $135 million is allocated to drill and complete 21 development
wells, mainly in shallow waters, including additional well completions at the
Hickory and Tanzanite fields; to upgrade existing production platforms; and to
conduct preliminary engineering studies for future field developments for
recent deep water discoveries.
Anadarko's oil and gas production from Gulf of Mexico fields is expected
to increase from an average of 32,500 barrels of oil equivalent (BOE) per day
to 73,100 BOE per day in 2001.
In Algeria, the company expects to spend $175 million to drill
38 development wells and construct additional production facilities. The
Stage II production train at Hassi Berkine South, scheduled for completion in
the third quarter of this year, will increase gross production capacity from
70,000 barrels of oil a day to more than 140,000 barrels a day. Three
additional production trains -- at Hassi Berkine, Ourhoud and the Block 404
satellite fields -- are under construction and are expected to raise gross
production capacity by an additional 380,000 barrels a day by late 2002.
More than $130 million is budgeted for development projects in Canada this
year -- primarily heavy oil reserves and shallow gas fields in Southeast
Alberta and Southwest Saskatchewan. More than 490 net development wells have
been budgeted for 2001. Production from Canada is expected average 74,400 BOE
per day in 2001.
Roughly $95 million is earmarked for field development projects in the
Oritupano-Leona field in Venezuela, in which Anadarko holds a 45 percent
working interest. Twenty-three new development wells are planned this year,
and 87 are scheduled to be recompleted and reactivated. The capital
investment program also includes construction of extensive surface production
handling facilities. Net oil production from this field is expected to
increase from 9,700 barrels per day in 2000 to 23,750 barrels per day in 2001.
Approximately $40 million is budgeted for additional development drilling
and production facilities at the Alpine oil field in Alaska, which began
producing in November 2000, and in the Cook Inlet, where the company made a
gas discovery in 1998. Sixteen development wells are planned this year in
Alpine.
Oil production from the Alpine field is currently more than 80,000 barrels
a day. Anadarko holds a 22 percent working interest in the Alpine field and a
50 percent working interest in the Cook Inlet discovery.
Exploration
The company has budgeted $830 million for exploration in 2001, of which
90 percent will be invested in North America.
Approximately $300 million is allocated for onshore exploration in the
Lower 48. More than $80 million of that is earmarked for exploratory
drilling, seismic and lease acquisition in the Bossier play, which is the most
active play in the U.S. today. Thirty-six exploratory wells are planned for
this year in the Bossier. Significant exploration work is also planned in the
Austin Chalk area of Central Texas and in the Texas Gulf Coast area, where the
company is actively exploring the other Cretaceous objectives for new natural
gas reserves.
Another $280 million is allocated for exploration in the Gulf of Mexico.
The company expects to drill 25 wildcat wells, including seven in the sub-salt
and eight in deep water. The remainder are in shallow water.
More than $110 million is budgeted for exploration in Canada -- primarily
for drilling in the Klua, Jean Marie, Conroy, Jedney Buckinghorse and Sullivan
Creek prospects in Northeast British Columbia and Western Alberta. The budget
also includes smaller outlays for 2-D seismic surveying in the MacKenzie Delta
area of the Canadian Arctic, where Anadarko acquired license acreage in the
fall of 2000. Anadarko expects to drill approximately 110 net exploratory
wells in Canada this year.
Nearly $50 million is budgeted for exploration in Alaska this year,
primarily on the North Slope. Additional seismic processing work is under way
in and around the Alpine field, and as many as six additional wells may be
drilled around the Alpine field this year, depending on weather and
permitting. Seismic work also is planned in the Brooks Range Foothills and the
National Petroleum Reserve - Alaska in anticipation of drilling in the next
winter season.
"We have a substantial acreage position around Alpine, and we think
there's good potential to find some satellite fields," Allison said. "If we
do find smaller fields nearby, we could piggyback on the existing production
and transportation infrastructure we have in place at Alpine to develop them
economically," he added.
Additional exploratory dollars are budgeted for projects in South America,
North and West Africa, Australia, the North Atlantic and the Black Sea.
Houston-based Anadarko Petroleum Corporation is the world's largest
independent E&P company, with proved reserves totaling 2.06 billion barrels
equivalent. Domestically, it has operations in Texas, Louisiana, the
Mid-Continent and Rocky Mountain regions, Alaska and in the shallow and deep
waters of the Gulf of Mexico. Anadarko currently is the most active driller
in North America. Internationally, it is active in Canada, Algeria, Tunisia,
West Africa, Guatemala, Venezuela, Brazil, Georgia, the North Atlantic and
Australia.
Anadarko Petroleum Corporation
Capital Spending
($ in millions)
2001 Budget 2000 Actual 1999 Actual 1998 Actual
Exploration 830 429 189 257
Development 1,426 921 311 344
Gas Gathering
And Other 245 134 77 201
Capitalized Interest
And Overhead 327 243 103 115
This news release contains forward-looking statements and projections made
in reliance of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Anadarko believes that these forward-looking statements
are based on current, reasonable and complete information and assumptions.
However, a number of factors could cause actual results to differ materially
from the projections, anticipated results or other expectations expressed in
this release. While Anadarko makes these forward-looking statements in good
faith, neither Anadarko nor its management can guarantee that the anticipated
future results will be achieved. Reference should be made to Anadarko's
Securities and Exchange Commission filings for additional important factors
that may affect actual results, including the section entitled "Additional
Factors Affecting Business" in the Management's Discussion and Analysis (MD&A)
included in the company's 1999 Annual Report on Form 10-K.
SOURCE Anadarko Petroleum Corporation
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CONTACT:
media, Teresa Wong, 281-873-1203, or Anne
Pearson, 281-876-8368, or investors, Paul Taylor, 281-874-3471,
or David Larson, 281-874-3265, all of Anadarko Petroleum
Corporation
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