Anadarko enters West Texas exploration venture with Chevron

Anadarko Petroleum Corporation has entered an exploration joint venture with Chevron U.S.A. Inc. on approximately 200,000 net mineral acres Chevron owns within the Delaware Basin in west Texas. The acreage overlaps and extends westward from Anadarko’s existing leasehold, which includes the rapidly growing Haley natural gas field.

Under the agreement, Anadarko will serve as operator and earn up to a 100 percent working interest in the Chevron-owned acreage. Chevron will retain royalty interests on its mineral acres, as well as hold an option to take up to a 25 percent working interest in each well.

“Anadarko has ramped up our gross operated gas production in the Haley field from zero in 2003 to 175 million cubic feet per day currently, making it one of our largest and fastest-growing onshore gas plays,” Anadarko Senior Vice President Karl Kurz said. “The new venture with Chevron will allow us to apply our play concept farther westward, with the Chevron acreage essentially more than doubling our net land position in the highly prospective Delaware Basin.”

Anadarko’s existing holdings in the region total 264,000 gross acres (140,000 net), of which the Haley field represents about 60,000 gross acres (44,000 net).

“The Pennsylvanian zones we are targeting in the Delaware Basin have already produced a cumulative 2 trillion cubic feet of natural gas, and we believe more than 10 trillion cubic feet of gross resource potential remains just on our captured land position, inclusive of the Chevron acreage,” Kurz said. “We expect to be operating as many as 13 drilling rigs in the region by year-end, up from the six rigs we had working through May and the nine rigs currently drilling in the play. That activity level allows for continued development of the Haley field, where we have grown gas production nearly 50 percent so far this year, as well as the drilling of three to five significant exploration wells in 2006, which could include our first test of the Chevron acreage. We have been very pleased with the results of our drilling program so far, and are excited about the potential we see on the Chevron acreage.”

Source: www.oilonline.com