Third Quarter 2001 Quick Facts from Key Producing Regions Company-wide Portfolio ............... 2 Rig Activity ............. 3 Gulf of Mexico ......... 4-6 Algeria................. 7 Alaska ................. 8 Bossier ............. 9-10 Central Texas ........ 11-12 Canada ............... 13 Rocky Mountains ..... 14-16 Gulf Coast ............. 17 Mid-Continent .......... 18 West & Southwest ....... 19 Gulfstream............. 20 Other International ...... 21 Table of Contents Third Quarter 2001 Investor Relations Contacts: A. Paul Taylor, Jr. Vice President, Investor Relations Phone: 281-874-3471 David R. Larson Manager, Investor Relations Phone: 281-874-3265 Stewart Lawrence Manager, Investor Relations Phone: 281-874-3326 www.anadarko.com (NYSE: APC)
Transcript
Third Quarter 2001
Quick Factsfrom
Key Producing RegionsCompany-wide
Portfolio . . . . . . . . . . . . . . . 2
Rig Activity . . . . . . . . . . . . . 3
Gulf of Mexico . . . . . . . . . 4-6
Algeria. . . . . . . . . . . . . . . . . 7
Alaska . . . . . . . . . . . . . . . . . 8
Bossier . . . . . . . . . . . . . 9-10
Central Texas . . . . . . . . 11-12
Canada . . . . . . . . . . . . . . . 13
Rocky Mountains . . . . . 14-16
Gulf Coast . . . . . . . . . . . . . 17
Mid-Continent . . . . . . . . . . 18
West & Southwest . . . . . . . 19
Gulfstream. . . . . . . . . . . . . 20
Other International . . . . . . 21
Table of Contents
Third Quarter 2001
Investor Relations Contacts:
A. Paul Taylor, Jr.Vice President, Investor RelationsPhone: 281-874-3471
David R. LarsonManager, Investor RelationsPhone: 281-874-3265
Stewart LawrenceManager, Investor RelationsPhone: 281-874-3326
www.anadarko.com(NYSE: APC)
Third Quarter 2001
Portfolio
2
In response to relatively weak natural gas prices and higher drilling and service costs over the last several months, Anadarko
The portfolio made a strategic move during the quarter to shift is divided into focus and concentrate more on exploration and 3 general "oil" projects instead of aggressive gas categories. In development. With its broad portfolio of projects, the first the Company easily made the necessary changes in category are capital allocations to favor long-term reserve the long-term additions. Anadarko is maintaining capital exploration discipline and will continually adjust to market projects. These projects feature limited up-front conditions to maximize value for the shareholders. capital investment and huge "home-run" potential.
Anadarko maintains a portfolio of properties and Some of these projects will fail but the ones that prospects with varying time frames and risk succeed could be significant to Anadarko. The exposures. This portfolio is essentially the second group is medium cycle-time projects - the Company's business model and capital allocation major exploration and development drilling model. The way it works is high-risk, high-reward projects. Finally, in the last column is "bread & projects come in on the left and are worked until, butter" development or exploitation projects. They hopefully, they reach the column on the right. feature short cycle-times with low risk - projects Some fall out along the way, but they are replaced that give you almost instantaneous production with new opportunities. growth.
Home Run, Long-Term High Potential, Near-Term Low Risk, Immediate Impact“Bread & Butter”
EAST TEXAS / LOUISIANA
GULF OF MEXICO
ROCKIES
CANADA
INTERNATIONAL
Bossier Wildcats Cotton Valley Wildcats Georgetown / Glen Rose Continental Land & Fur
Shallow Water Exploration Sub-salt (Prospect Inventory) Deepwater (Prospect Inventory)
Coalbed Methane Deep Basin Gas Overthrust Plays
NE British Columbia Alberta Foothills NW Territories
Shallow Water Exploitation Sub-salt (Hickory, Tanzanite)
Alpine
Green River Basin Wamsutter Area
Hugoton Golden Trend Enhanced Recovery Ozona
Dawson Wild Hay SE / SW Saskatchewan Heavy Oil
Algeria Venezuela Oman Qatar
ALASKA
ALGERIA
CANADA
NORTH ATLANTIC
AUSTRALIA
GEORGIA
QATAR
STEALTH #1
North Slope Foothills
New Contract
Mackenzie Delta Nova Scotia Shelf
1
2
3
Third Quarter 2001
Rig Activity
3
Anadarko has slowed the pace of activity. Current operated rig activity in North America stands at 74 rigs. That's down from 93 just three months ago. But, now there are more rigs working in Canada and more high-impact exploration wells drilling.
Anadarko's production volumes have grown steadily over the year. Third quarter production
East Texas and the Rockies. Production would was just over 51 million BOE. That's above the have been even higher but, in July Guatemala was Company's forecast mainly due to higher sold - reducing third quarter volume by about 1 production from our oil properties in Alaska and million BOE. Volumes are down but the Company Algeria and increased recoveries of NGLs in both
upgraded its operating margins.
Fourth quarter volumes are expected to be flat with the third quarter, at about 51 million BOE. That brings our full-year volumes to about 202 million BOE, which is lower than previous guidance by 1%. It is lower because the Company shifted spending and bought in nearly 1% of stock.
Even with a lower level of activity, the goal continues to be “double’digit” growth for next year.
Third Quarter 2001
Drilling is underway on 4 high potential wildcats.
Gulf of Mexico
4
Texas
Louisiana
Gulf of Mex ico
New Orle ansAnadarko / BP Joint Venture Exploration BlocksAnadarko AcreageNew Anadarko Blocks
During the third quarter net production from encountered 80 net feet of pay Anadarko’s Gulf of Mexico properties averaged in five intervals. Completion operations are 347 MMcf/d of gas and 24,000 B/d of oil underway and the well should be producing to compared to 373 MMcf/d and 29,000 B/d from the sales the second quarter of 2002. The Company is second quarter. The lower volumes were due to evaluating the possibility of a multi-well scheduled maintenance downtime, normal development program. (APC 58% W.I.)production declines and some minor disruptions
encountered 69 net feet resulting from storms in the Gulf.of pay and is online flowing 14.7 MMcf/d of gas
Currently 11 rigs are operating in the Gulf, and 300 B/d of condensate from the E sand. (APC including 6 in shallow water, 3 sub-salt and 2 60% W.I.) deepwater.
logged pay in the UM1 C series sand and 12 sand - the same sand found in the #6 well (a discovery announced last
Shallow water projects in the Gulf of Mexico quarter). The Company is continuing to drill continue to report outstanding results as the deeper to a proposed depth of about 16,000 feet. Company exploits the huge potential around (APC 50% W.I.) several of its larger and more mature fields. Re-mapping and re-processing have generated Workover and recompletions were also performed numerous prospects adding to the Company's large on several wells at SMI 281, EI 87 and SMI 268 inventory of projects identified from extensive fields during the quarter.field studies. During the third quarter, 4 discoveries were made.
Shallow Water
Ship Shoal 129 #4
South Timbalier 143 #5
South Marsh Island 280 #7
White Ash
Tarantula
Blues Image
Eiger Sanction
Marco Polo
SazeracMahogany
South Marsh 280
Tanzanite
Hickory
Ship Shoal 129S. Timbalier 143
Third Quarter 2001
Gulf of Mexico
5
Sub-salt
Sazerac
Eiger Sanction
(Eugene Island 346) was down several days during the quarter for diagnostic well
(Green Canyon 99), a prospect acquired work. The platform is back online producing at 62 in OCS sale 178, was spud the end of July by MMcf/d of gas and 9,000 B/d of oil. (APC 100% Transocean's Amirante rig in 1,200 feet of water. W.I.) The well just finished drilling through salt and is below 15,000 feet. The proposed well depth is 23,000 feet which should be reached within the next 30 days. (APC 100% W.I.) The Company is targeting Miocene sands in a sub-salt inversion structure.
(Ship Shoal 359), successfully drilled in the second quarter, has been completed in the R sand and X sands. The R sand tested 2,800
(Mississippi Canyon Block 667) is B/d of oil and 4.5 MMcf/d of gas. The well is in 2,950 feet of water and is currently drilling at currently producing from the X sand at a rate of 20,000 feet - not yet to the top of the prospective 2.9 MMcf/d of gas and 1,100 B/d of condensate. A interval. The well, with a targeted depth of 29,000 recompletion to the R sand will be performed in feet, has been difficult and expensive to drill. The the near future. The A-11 well encountered about prospect is a 4-way turtle structure with Miocene 130 net feet of pay in 6 intervals. Anadarko age sands. The well being drilled with Diamond operates this well. (APC 41% W.I.)Offshore’s Ocean America rig is anticipated to TD
Anadarko is drilling the first offset well to its most in the next 60 days. The prospect is located at the recent sub-salt discovery - the south end of an earlier deepwater Gomez
located at South Timbalier 308. Results discovery. (APC 100% W.I.) of the #2 well, spud in October, will be used to
(Grand Isle 110/111/116) continues evaluate a commercial development plan for the to exceed production forecasts with sustained flow field. In addition, the well will test deeper potential rates of 225 MMcf/d of gas and 13,000 B/d of on the proven trap. (APC 100% W.I.)condensate. (APC 50% W.I.)
Tanzanite field
Mahogany A-11
Tarantula prospect
Hickory field
G. nepenthes
Disc. A
Basal NebraskanBasal Nebraskan
G. nepenthes
Disc. A
Salt
Sazerac
Third Quarter 2001
Gulf of Mexico
6
Deepwater
OCS Lease Sale
Joint Venture
Blues Image
White Ash
95 deepwaterGarden Banks Keathley Canyon
Port Isabel Alaminos Canyon
Marco Polo
(Mississippi Canyon 587) spudded at the end of September. The well, located in 2,250 feet of water, will be drilled to a depth of 24,000 feet. The prospect is targeting Middle and Lower Miocene sands in a large 3-way closure against salt. BP is the operator using Transocean’s Deepwater Horizon rig. (APC 50% W.I.)
(Mississippi Canyon 392) is located on the eastern edge of Mississippi Canyon - bordering the Sale 181 leasing area in nearly 7,300 feet of water. The well, spudded in late September, is being drilled with the ENSCO 7500 rig to a proposed depth of 18,000 feet which is expected to take 60 days. (APC 100% W.I.)
Anadarko was apparent high bidder on 26 tracts in the Western Gulf of Mexico . The company high bids represent a total investment of Anadarko entered into a joint venture with BP to about $5.5 million. The tracts cover more than explore blocks held by BP in the 133,000 acres in deep water, mainly around the and areas of the
and areas. All the Central Gulf of Mexico. The 95 blocks, held 100% bids were for a 100% working interest. Anadarko by BP, are within a larger 640-block area of mutual holds a total of 300 leases in the Gulf of Mexico. interest where the two companies will license and With the BP joint venture, Anadarko now has reprocess 3D seismic data. These blocks are in access to 164 deepwater blocks.water depths ranging from 3,000 to 6,000 feet.
The agreement gives Anadarko the option to earn 33 to 66% working interest in the blocks. Anadarko will fund 100% of the licensing and re-processing costs and pay a disproportionately larger share of the first 4 wells drilled.
Also as part of the agreement, BP will assign Anadarko its rights in 8 blocks in the Green Canyon area near the discovery. The Company is working on the development plan and options to commercialize Marco Polo.
Lease Sale 180
Third Quarter 2001
208
404
EMEEMN
EKT
BKNE
HBNSHBN
RBK
QBN
HBNSE
211EMK
Algeria
Tunisia
Libya
ORD
APC Concession Area
Oil Field
Gas Field
Central Processing Facility
Future Processing Facility
Existing Pipeline
Future Pipeline
Algeria
7
406b
ORD CPF
Development
Exploration
tested 4,900 B/d of oil and 4.0
Another milestone in the development plan was MMcf/d of gas.reached when production from the second processing unit for the began August tested
th26 . In September, the central 4,600 B/d of oil and 4.4 MMcf/d of gas.production facility (CPF) achieved a monthly
tested 4,900 B/d of oil and 5.0 MMcf/d average production rate of 108,000 B/d and a of gas. on
stOctober 1 .
Construction continued on 2 other 75,000 B/d The Company moved ahead with its "new" processing units at the Hassi Berkine CPF located exploration program in Algeria under the successor at the northern end of Block 404. These units will exploration license for Blocks 404, 211, and 208. process oil produced from the HBN and 5 smaller Work commenced on reprocessing the existing 2D satellite fields to the south and east. Both units are seismic database and planning is underway for on schedule for completion and first oil production 1,100 kilometers of new 2D seismic. Exploration next year. Additionally, a CPF with 3 processing drilling is expected to begin during 2002.units is under construction at the . Full
Anadarko signed a new exploration contract for production of 230,000 B/d of oil is expected in in Algeria's recent licensing round. 2003.
The license has a 3-year initial term. A work During the third quarter, Anadarko continued its program commitment includes seismic acquisition development drilling activity in Algeria utilizing 6 and an exploraton well, initially planned for 2003. rigs, completing 3 wells in HBN, 3 wells in HBNS, Anadarko has 100% working interest in this 1 in HBNSE and 4 wells in ORD. Notable 687,000 acre block. The Company now controls a completions in the quarter include: total of 3.6 million acres in the oil-rich region of
the Sahara. tested 5,400 B/d of oil and 5.5 MMcf/d of gas.
HBN-9
HBNS field HBNS-33Hassi Berkine
HBNS-38peak one-day production rate of 136,000 B/d
ORD field
Block 406b
HBN-7
Third Quarter 20018
Alaska
Anadarko and Phillips announced the Nanuq discovery.
Alaska
Map Area
NPR-ACentralArctic
Foothills
Beaufort Sea
FIORD
ALPINE
NANUQ
Alpine West
Anadarko Acreage
Oil Field
Pad 2
Pad 1
Moose’s Tooth
Altamura
Alpine Field
Exploration
Satellite Fields
The Alpine field produced an average of 94,000 B/d of oil in the third quarter. Alpine continued to set field production records, producing more than
during a single day (September 25th) and averaging over 97,000 B/d in July. With Alpine’s higher than expected production capacity and the new production anticipated from the satellite fields, Alpine’s facility is expected to be further expanded to . The expansion should be completed by mid to late 2003.
Plans are being finalized for this coming winter The development drilling rig was moved to P
drilling season. Anadarko expects to drill its first and began development of the western part of the
operated wildcat on the North Slope using Nabors field in the quarter. One of the first wells to be
Rig 14E, which is under contract. The exploration drilled was , a step out well to identify
well will be the (APC 100% W.I.) the western boundary of the field . (APC 22%
and is located in the NPR-A just south of the W.I.)
Moose's Tooth discovery. The Company plans to participate this winter in the acquisition of 1,900 square miles of 3D and 600 square miles of 2D
Anadarko and Phillips announced the seismic and continue the company-operated , a satellite oil field about 4 miles south Foothills exploration program.
of Alpine field. The Nanuq accumulation is The Company also expects to participate in up to estimated to contain about and is 11 additional exploration wells with partners, the second satellite field to be discovered near including Alpine. The previously announced delineation of last is estimated to contain about , year’s announced located about 8 miles north of Alpine. discoveries at
Both of these Alpine satellites will be developed Moose’s Tooth. and produced through the expanded Alpine facility beginning in the 2005-2006 time frame. Construction should begin in 2002. Each project will consist of separate drilling pads and infrastructure. (APC 22% W.I.)
103,000 B/d
ad 2
Alpine West
135,000 B/d
Altamura#1
Nanuq discovery
40 million BOE
Fiord satellite50 million BOE
Third Quarter 2001
Bossier Play - Texas
9
Anadarko’s exploration efforts extend the boundaries of the Bossier Play in Texas and Louisiana.
Gulf of Mexico
Texas
Louisiana
Bossier
Vernon
FREESTONE
LIMESTONE
NAVARRO ANDERSON
LEON HOUSTON
MADISONROBERTSON
SHELF
DEEP B
ASIN
MIN
I BASIN
Nan-Su-Gail
Dowdy Ranch
Mimms Creek
Dew
Bear Grass
BaldPraire
Louetta Parker A-1
Burgher C-12
Hartley 5
Cecil Reagan #2
Merryman A-3
Bobbie Bonner A-1
Belin A-1
Rainbolt Ranch A-1
Producing Field
Exploration Area
Exploration Well
Development Well
Average gas production from Anadarko's Bossier in Dowdy field. (APC 100% W.I.) play in both Texas and Louisiana during the third
tested 13.1 MMcf/d of gas, located quarter was 346 MMcf/d (258 MMcf/d net), in Dowdy field. (APC 100% W.I.) essentially flat from the second quarter even as
drilling activity slowed. tested 11.9 MMcf/d of gas, located in Dowdy field. (APC 100% W.I.) Rig activity in the Bossier declined from 33 rigs
last quarter to 21 currently as natural gas prices fell tested 7.4 MMcf/d of gas, located in in the quarter. Dowdy field. (APC 100% W.I.)
tested 5.6 MMcf/d of gas, located in th Mimms Creek field. (APC 100% W.I.)Anadarko spud its 400 well in the East Texas
portion of the play during August with the While development drilling slowed, exploration located in the Reagan field of efforts continued to extend the boundaries of the
Robertson County. A total of 35 wells were Bossier play. In the third quarter, 7 exploration completed in the quarter giving the Company a wells were drilled, 5 of which were discoveries; total of 404 producers. The Company has 17 and 4 more exploration wells are drilling now. The operated rigs in the area. was one of the more
significant discoveries in the third quarter. The was completed at a rate of 11.3 well, a 1 mile step-out extending the Bald Prairie MMcf/d of gas, the highest test rate to date in the field to the south, tested at a rate of 3.2 MMcf/d of Bald Prairie field. Other notable completions gas. The , a previously during the third quarter of 2001 include:announced discovery deeper in the basin, came
tested 14.4 MMcf/d of gas, located online this quarter at a rate of 5.2 MMcf/d of gas. in Dowdy field. (APC 100% W.I.) Two of the drilling wildcats are the Devil's Lake
and Hilltop Lake tested 13.5 MMcf/d of gas, located prospects.
activity to a peak level of 9 rigs. Although an average Vernon well costs more due to its drilling depth, it adds proportionally more gross reserves and has a higher initial production rate. Early evaluations suggest the greater Vernon area has potential similar to the East Texas Bossier play (over of proved reserves).
Anadarko completed 4 wells, and acquired another 2 wells during the quarter bringing the total well count to 38. Initial production from wells drilled in the southwestern part of Vernon indicates there is
Anadarko has successfully pushed the Bossier play opportunity to extend the field limits.into northwest Louisiana with development of the
in Jackson Parish, Louisiana, and is tested 10.6 MMcf/d of gas. (APC now actively doing exploration. 100% W.I.)
Two key wildcat wells were spudded in the third tested 4.7 MMcf/d of gas. (APC quarter. The in the 98% W.I.)and the in the
tested 4.1 MMcf/d of gas. (APC .87% W.I.)
Development well economics in the Vernon field During the quarter, dehydration capacity in Vernon now exceed the returns the Company receives in was doubled to 100 MMcf/d. The field is currently East Texas and help justify an increase in drilling producing 59 MMcf/d gross (43 MMcf/d net).
1 Tcf
Vernon Field Davis Bros. 29-1
Davis Bros. 20-1Davis Bros. 11-1 Ansley area
La Minerals 33-1 Kelley’s Davis Bros. Q2prospect
Gulf of Mexico
Texas
Louisiana
Bossier
Vernon
Third Quarter 2001
Central Texas
11
Anadarko continues to exploit multiple pay zones in Central Texas, utilizing horizontal drilling.
GRIMES
ROBERTSON
LEON
MADISON
WALKER
HOUSTON
BURLESON
WASHINGTON
AUSTIN
COLORADO
FAYETTE
LAVACA
WALLER
FT BEND
WHARTON
MONTGOMERY
HARRIS
LEE
MILAM
BRAZOS
Houston
Coffield-Osage #2 RE
Holle #2
Becker 1 RE
Zwernemann #1 RE
W.B. Hicks #1
Rib Eye #1
Existing FieldsGlen RoseGeorgetownBuda
Joannah #1 RE
Anadarko continued to exploit the multiple pay exploration. Two wells have been completed to zones in Central Texas utilizing horizontal drilling date. The tested gas with rates of 6 technology. Currently, Anadarko has 8 rigs MMcf/d. (APC 75% W.I.) and the operating throughout its Central Texas play; 1 in flowed 5.6 MMcf/d of gas. (APC 63% W.I.) the Georgetown, 6 in the Buda / Austin Chalk and A horizontal lateral is being drilled in the 1 in the Glen Rose. Anadarko's net volumes in and the well has had some encouraging Central Texas averaged 210 MMcf/d of gas and shows. , a key expansion well 13,000 B/d of oil for the quarter, down slightly north of deep Giddings, was spud in October.from the second quarter because of the normal production declines inherent with these fractured carbonate reservoirs.
Anadarko drilled 4 wells (Holle, Heideman, Witt and Cassidy) in the deep Giddings over-pressured area. The best well this quarter was the , which tested 30.2 MMcf/d of gas. (APC 100% W.I.) The (APC 100% W.I.) is being completed and the (APC 42% W.I.) is drilling. This area, known as the “Becker area”, is producing 79 MMcf/d gross from 9 wells.
A shallow normal pressure Georgetown play is being evaluated by the Company using re-entries to minimize risk dollars at this stage of
Georgetown Play
Heather #1 REZwernemann
#1 REJoannah
#1 REL.S. Wade #1 RE
Holle #2
HeckmanD.J. Yarborough #2
Third Quarter 2001
Central Texas
12
Buda and Austin Chalk Play
Glen Rose Play
Third quarter completions included the testing 3.1 MMcf/d of gas and
The Company continued its successful 300 B/d of oil (APC 99% W.I.) and the redevelopment program of the Buda and Austin testing 1.1 MMcf/d of gas and 1,016 B/d of oil Chalk formations in the located in (APC 69% W.I.).Lee, Fayette, Washington, Brazos, and Burleson Counties of Texas. During the quarter, 4 wells The Company recently made its initial tests of the were re-entered and deepened to the Buda Austin Chalk "D" zone, which had very formation. encouraging results. The tested
1,100 B/d of oil and 1.2 MMcf/d of gas (APC 82% tested 600 B/d of oil and W.I.) and the flowed 89 B/d of oil
0.6 MMcf/d of gas. (APC 67% W.I.) and 1.5 MMcf/d of gas (APC 99% W.I.). The cost to re-enter a well is about half the cost of a grass tested 800 B/d of oil and 0.9 roots well. The future potential for this type of MMcf/d of gas. (APC 66% W.I.)horizontal testing could extend throughout
tested 140 B/d of oil and 2.1 Anadarko's Austin Chalk holdings of over 750,000 MMcfc/d of gas. (APC 50% W.I.) net acres and 1,200 existing operated wellbores.
tested 530 B/d of oil and 0.9 MMcf/d of gas. (APC 100% W.I.)
One rig is drilling in the Glen Rose play on the Within the Austin Chalk formation, Anadarko has , an opposing horizontal lateral well, in mapped multiple stratigraphic zones and the Mossy Grove Field of Madison County, Texas. successfully exploited the "A" and "B" zones with The well will be completed early in the fourth a low cost re-entry program utilizing existing quarter and the rig moved to a Glen Rose wellbores as kick-off points for horizontal laterals. exploration well.
Colorado Bend Unit #1 RE
Peggy #1 RE
Giddings field
Coffield-Osage #2
Golden Triangle #1 RE Dodie #1 RE
W.B. Hicks #1 RE
Hullabaloo #1 RE
Beluga #1 RE
Ribeye #1
Third Quarter 2001
Canada
13
Canada benefited from the modest shift in the Company's capital program during the third quarter. Drilling activity increased to a record 22 operated rigs resulting in 110 wells being spud. Activity was focused primarily on Alberta, British Columbia and Saskatchewan area.
Anadarko has completed a deal with Canadian Forest to explore on several exploration licenses in the Fort Laird sub basin adjacent to the 1999 Ft. Laird Nahanni-70 MMcf/d discovery. (APC 21% W.I.) Under the deal, Anadarko will acquire 3D and 2D seismic this winter and drill a Devonian Nahanni formation test the following year with the potential to earn interest, via rolling options in up to 71,000 acres.
The Company also entered into an agreement with Canadian Natural Resources (CNR) to evaluate seismic over 24 sections (15,300 acres) CNR holds in N.E. British Columbia and then drill a Mississippi Debolt test to earn an interest in 8
In the Wild Hay area, Anadarko dually completed sections with a similar option on the remaining
the in Cadomin and Bluesky acreage. This acreage is near the Company's recent
formations with a combined test rate of 5.1 Altares discovery, which came online in early
MMcf/d of gas. (APC 60% W.I.) October at a rate of 5.3 MMcf/d of gas. (APC 100% W.I.) The , also located in northern Alberta,
drilled the Halfway formation and tested 7.6 In northeast British Columbia, Anadarko continued
MMcf/d of gas. (APC 75% W.I.) its Jean Marie horizontal program. Two horizontal laterals were drilled in the . The first In Central Alberta, the Company is testing various lateral tested at 2.9 MMcf/d of gas and the second formations in this multi-play area. one at 3.8 MMcf/d of gas. Gunnel 38-B tested 3 , a Diog completion, flowed 528 B/d of oil MMcf/d of gas. (APC 100% W.I.) and 3 MMcf/d of gas and the
tested 2 MMcf/d of gas from the Belloy formation.In northern Alberta, 8 successful oil wells were drilled to the Slave Point formation in the Dawson Anadarko continued to exploit shallow oil in area. The tested at 250 B/d of oil southeast Saskatchewan. These shallow oil zones and the 12-13 produced 370 B/d of oil. (APC 75% are being developed using multiple lateral W.I.) The Company has a 4-rig drilling program horizontal wells. The and underway focusing on new pool wildcats and field wells were completed in the Winnipegosis extensions. The , a new Devonian formation and flowed 400 and 600 B/d, Slave Point prospect, spudded in October and early respectively. (APC 50% W.I.) The indications are that it is a discovery. A dozen offset tested at 466 B/d from the Frobisher Coteau locations have already been identified. formation. (APC 100% W.I.)
Wild River 1-29
Knopcik 4-6
Gunnel B-51
Pouce Coupe S 14-3
Saddle Hills 13-27
Dawson 14-25
Steelman 15-23 10-26
Dawson 13-2
Weyburn 4-34
BRITISHCOLOMBIA
ALBERTA
SASKATCHEWAN
YUKON
NORTHWEST TERRITORIES
F.t Laird
Wild Hay
Dawson
SE Sask.
Jean Marie
Third Quarter 2001
Rocky Mountains
Anadarko is doubling exploration and development drilling activity in the Rocky Mountain area.
14
Sweetwater Carbon
PlatteGoshen
Albany
Uinta
Laramie
Park
Big Horn
Sheridan
Teton
Campbell
Crook
JohnsonWashakie
Fremont
Hot Springs Weston
SubletteLincoln Natrona Converse Niobrara
Atlantic Rim
PowderRiverBasin
Gillette
Operated CBM Projects
Operated CBM Acreage
Non-Operated CBM Projects
Casper
WYOMINGGreenRiverBasin
Rock Ridge
Oyster RidgePipeline
Hanna Basin
House Creeks
Hanna Draw
Big George Unit
2001 Wells
This year, Anadarko is doubling exploration and CBM exploratory CBM wells in Wyoming, as well development activity in the Rocky Mountain area as evaluating activity in 6 CBM pilot projects on gathering over 1,000 of miles of seismic data, the Land Grant. drilling more than 100 new wells and adding to its
, located in the extensive land base. Net production in the quarter Power River Basin of Wyoming, came online in averaged 286 MMcf/d of gas, 12,000 B/d of oil August with gas sales from 21 wells. Another 64 and 18,000 B/d of NGLs, down 6% from the wells have been drilled and should begin second quarter. Volumes were impacted by producing in the fourth quarter. The field is pipeline constraints for facilities upgrades, third-producing 3.4 MMcf/d of gas. Additional party gathering problems and maintenance completion and facilities work is in progress. Gas turnaround at a gas processing plant.production from this first phase of development is expected to reach about 35 MMcf/d . Anadarko is operator and holds interests in 30,000 gross acres
CBM is becoming an increasingly important play in the County Line prospect and Big George for Anadarko, which is reflected by the Company's Federal unit. A second phase of development is strong acreage position in key areas of Utah and scheduled to being in late 2002, following the Wyoming, and overlying the Austin Chalk trend in BLM Environmental Impact Study, and should Texas. Anadarko has 3 operated projects in various result in the drilling of 200 or more wells. (APC stages of development. This includes the first 50% W.I.)commercial production established from the Big George coal at the County Line project in the Powder River basin. Anadarko has been actively acquiring exploration core data to evaluate new
Coalbed Methane
The County Line CBM project
CountyLine
Third Quarter 2001
Exploration
Anadarko began a significant new exploration push in the Rocky Mountains during the quarter. Two regional 2D seismic programs were approved with acquisition anticipated to begin in October. One program, located in the
basins of SE Wyoming, covers about 300 linear miles and the other is
data. The Company plans to use its expertise in a 250-mile program located seismic pre-stack depth migration to image more in the . These proprietary regional accurately complex structural targets.programs feature acquisition technology that has
been used sparingly in the Rocky Mountains and Two non-exclusive 3D seismic programs are also
should improve data quality over existing seismic being acquired. The 125 square mile program is designed to identify potential basin center gas plays and should begin shooting this month. The 290 square mile 3D program, which will support stratigraphically trapped sandstone plays, began acquisition in early September.
Anadarko will also participate in an exploration well in the Wyoming Overthrust belt. Anschutz, the operator, should spud the Clifton Hollow prospect in late October.
Hanna and Laramie
Overthrust Belt
Haystacks
Patrick Draw
Rocky Mountains
15
Colorado
Utah
Wyoming
Cheyenne
Salt Lake City
RawlinsRock
Springs
Denver
County Line (CBM)
Wamsutter
Helper (CBM)
Drunkards Wash (CBM)
Anadarko Acreage
Gas Fields
Oil Fields
Coalbed
DarbySubthrust
2D Seismic
LaramideSubthrust
2D Seismic
Third Quarter 2001
Wamsutter Area The Company has had initial success east of Echo Springs field targeting the Almond and Lewis
Drilling continued in the Red Desert area, a sands in the Fillmore field area. The western extension of the Wamsutter area. The encountered gas in both sands and tested 2.7 quarter was highlighted by the successful drilling MMcf/d from the Almond. The Lewis pay remains of the Red Desert 17-1 and 17-2 wells, which behind pipe and will be commingled at a later date. further extended productive limits of the field. A (APC 31% W.I.) Two additional wells were drilled total of 11 wells have been drilled in the Red in the quarter and await completion. Drilling Desert area to date, with another 15 wells commenced in September on the first of two other authorized and awaiting federal drilling permits. A Fillmore area wells that have been authorized. The total of 5 Red Desert wells were completed during Company has identified two more locations that the third quarter. may be drilled during the fourth quarter. Anadarko
is the operator of these wells.The was completed in July flowing 2.3 MMcf/d of gas and 12 B/d of Anadarko also participated in 30 Wamsutter area condensate. The was completed wells with BP and others, which brings the year-to-in September flowing 3.4 MMcf/d of gas and 65 date total for that program to 87 wells, with a 98% B/d of condensate. Both wells produce from success rate. (APC 25% average W.I.)commingled Almond and Lewis formations. (APC 89-100% W.I.)
Fillmore #3-19
Red Desert 17-1
Red Desert 17-2
Rocky Mountains
16
Anadarko Acreage
Gas Fields
Oil Fields
Third Quarter 2001
Gulf of Mexico
Texas
Louisiana
Glen Rose
Giddings
Vernon
Masters Creek
Map Area
Carthage
Bossier Brookeland
Beignet
Kent Bayou
Gulf Coast
17
3DSurveys
Kent Bayou
Beignet
Brookeland Field
South Louisiana
Carthage
, about six miles southwest of Kent Bayou, spudded in October. The proposed depth is 20,500 feet and is targeting the Rob L sands in an upthrown fault closure syncline separated from Kent Bayou. The Company expects the well to reach TD in early January 2002. (APC 67% W.I.)
The Company's development program in the Brookeland field of Jasper and Newton Counties, Texas resulted in two significant completions in the quarter. Two other horizontal wells are in various stages of operations. The field is being selectively down spaced from 8,000 to 4,000 acres. So far the program has gone better
Development of the in than expected with higher reported reserves Terrebonne Parish, Louisiana, continued in the recovery and reservoir pressure. third quarter. The
tested at about 9 MMcf/d logged 163 feet of net pay and flow of gas and 850 B/d of condensate. (APC 97% W.I.)tested at a rate of 1,000 B/d of condensate and
1.3MMcf/d of gas from the lower Etouffee #3 tested at 7.7 MMcf/d of gas and sand. First production was in October. 300 B/d of condensate. (APC 100% W.I.)
The field is producing 63 MMcf/d of gas and 13,000 B/d of condensate. The production facility was recently upgraded to handle a maximum During the quarter, a total of 10 Cotton Valley capacity of 110 MMcf/d of gas and 24,000 B/d of wells were completed in the Carthage area as liquids. In addition, a salt-water disposal well was Anadarko continued a multi-rig infill program. The drilled to improve water-handling capabilities and application of a new frac "recipe" or technique has to reduce disposal costs. (APC 67% W.I.) resulted in significantly better well performance
and economics from these tight sand wells. By Exploration efforts in South Louisiana were aided spending an extra $100,000 the Company is able when the Company merged and re-processed to increase initial production rates
as well as surveys in the increase ultimate reserves from the
CL&F area. The pre- well. Current drilling activity is down stack time migrated to 1 operated rig.data has dramatically improved imaging tested 4.8 MMcf/d of below 15,000 feet gas. (APC 61% W.I.)and will be key in
tested 4.5 MMcf/d of gas. identifying future (APC 55% W.I.)prospects in the
survey area. tested 4.8 MMcf/d of gas. (APC 61% W.I.)
The Beignet prospect
Austin Chalk
Kent Bayou field
Continental Land and Fur Donner Brown A-83 #1(CL&F) #6
Vastar Fee A-15
500 2 to 3 times square miles of 3D above historical ratesseismic
CGU 25-14
Garrett #9
CGU 25-12
Third Quarter 2001
Mid-Continent
18
KANSAS
OKLAHOMA
HugotonEmbayment
GoldenTrend
Hugoton Embayment
Central Oklahoma
Anadarko proved in the quarter that potential still remains in one of its oldest operating areas. Using 1,300 square miles of 3D seismic data in the Hugoton Embayment, the Company has been able to identify and high-grade prospects in deeper zones. A total of 6 discoveries were drilled during the quarter in Stevens and Morton Counties of southwestern Kansas, each having potential development offsets.
logged over 40 feet of net pay in the lower Morrow and flowed 1.9 MMcf/d of gas and 13 B/d of oil. (APC 100% W.I.)
tested 4.6 MMcf/d of gas from nearly 20 During the quarter, rig activity steadily dropped feet of net pay in the lower Morrow G formation. from 6 to 2 in the area as the Company re-(APC 100% W.I.) evaluated play economics in light of falling gas
prices and high well costs. The abundant inventory encountered nearly 50 feet of net of development drilling locations will be revisited pay in the lower Morrow formation. The well when market factors improve. tested 3 MMcf/d of gas and is part of Anadarko's
continuing Hugoton Joint Venture project that the Anadarko drilled and completed 6 wells in the company entered into in 1997 with Exxon/Mobil. . The play located in Grady, Garvin, (APC 100% W.I.) and McClain Counties of Oklahoma targets several
different formations including deeper Sycamore, In Beaver County, Oklahoma the Woodford, Hunton, Viola, and Bromide. encountered nearly 70 feet of net pay in the basal
Chester sand and recovered 870 B/d of oil and 1.9 tested 2.2 MMcf/d of gas and 130 MMcf/d of gas on a 24 hour production test. (APC B/d of oil. (APC 80% W.I.)86% W.I.)
tested 1.1 MMcf/d of gas and 95 B/d of oil. (APC 73% W.I.)
tested 2.3 MMcf/d of gas and 123 B/d of oil. (APC 90% W.I.)
Anadarko acquired Kerr McGee's interest in the in Grady County,
Oklahoma. Anadarko now operates this 124 well waterflood unit. Gross production at the end of the third quarter was 1,130 B/d of oil and 1.3 MMcfd of gas from the 58 active producing wells within the unit. (APC 46% W.I.)
Carpenter A-3
Dold A-2
HJV Muncy A-1
Golden Trend
Brown L-1
Despain A-1
Watson A-3
Selzer A-2
Norge Marchand Unit
Third Quarter 2001
West & Southwest
19
East LostHills Area
PyramidHills Area
SanJoaquin
Basin
SanJoaquin
Basin
California
West Texas
New Mexico
East Lost Hills
TXL South Unit
H.T. Boyd lease
ELH #1ELH #2
ELH #4
ELH #9
Pyramid Power prospect
Ozona field
Loco Hills field
Roy Parks B #34
the Dora Roberts field were successful and the well tested at 500 B/d. The well is located in Midland County, Texas. (APC 100% W.I.) Similar work is planned on 3 more wells in the field.Daily
production at During the quarter, work was finished to convert the end of 45 well bores to water injection wells at the September was in Ector County, Texas. The project 1.5 MMcf/d of was part of a waterflood expansion that began in gas, 40 B/d of 2000. condensate and 6,500 B/d of Anadarko commenced its first operated CO2 water. injection project at the in Cochran
thProduction is County, Texas on October 4 . The project is limited by expected to recover an additional 15% of the available original oil in place (about 7.5 million barrels) saltwater disposal capacity. from this lease, which has been producing since
1939.All current production is from the well.
is capable of producing about 1.5 MMcf/d of gas but is shut-in awaiting saltwater disposal.
reached total depth of 20,800 feet in the quarter. The Company is sidetracking the well to the upthrown side of the fault cut in the wellbore.
, an extension 2 miles to the south of the #4 well, is drilling ahead below 14,000 feet. A third rig will be added this fall to drill the
, located about 18 miles to the northwest of East Lost Hills.
In the of Crockett County, Texas development activity of the Canyon and Strawn sands continued, but at a lower level than previous quarters. Using 4 rigs, dropping to 2, the Company drilled 30 development wells during the quarter. Year-to-date 80 wells have been drilled.
Initial activities began on a Strawn and Ellenburger exploration program in West Texas with the
In New Mexico, the first of five Paddock shooting of 131 miles of 2D swath seismic south
development wells was spudded in late September. of the Ozona field.
Successful completion could lead to additional well locations in the . Efforts to reactivate the temporarily abandoned
Ellenburger formation in the , in
San AngeloSan Angelo
OzonaOzona
Loco HillsLoco Hills
MIDLAND
Parmer Castro Swisher Briscoe
Roosevelt
Hall Childress
Lincoln
Bailey Lamb Hale Floyd
Chaves
Motley Cottle
Cochran Hockley
Lubbock Crosby Dickens King
Lea
YoakumTerry Lynn Garza Kent Stonewall
Eddy
GainesDawson
Borden Scurry Fisher
AndrewsMartin Howard
Nolan
Culberson
Winkler
Reeves
EctorLoving
Midland Glasscock Sterling CokeRunnels
Ward
Crane
Upton
Tom GreenReagan ConchoIrion
PecosJeff Davis
Crockett
SchleicherMenard
Presidio
Brewster
Terrell
SuttonKimble
Val Verde Edwards
Real
Kinney Uvalde
OZONA
DORA ROBERTS
H.T. BOYD LEASE
LOCO HILLS
NEW MEXICO
TEXAS
Gas Field
Oil Field
TXL SOUTH UNIT
Third Quarter 2001
Qatar
SaudiArabia
Bahrain13
11
12Al Rayyan Field
WA Q-2
WA Q-1
NORTHFIELD
DUKHANFIELD
Gulfstream Acquisition
20
Qatar
Oman
regarding the boundaries for Block 13 was formally resolved in spring 2001. Like Block 12,
Production from the field, located on Block 13 is operated by BP. (APC 65% W.I.) offshore Block 12, averaged about 11,800 B/d of oil for September. A redevelopment program, which includes increasing existing facility
Anadarko, the operator, is developing the Hafar capacity and drilling horizontal wells, is underway field located in Block 30 onshore Oman. The and is expected to more than double the production development program consists of drilling 8 rate by late 2002. BP operates Block 12. (APC development wells, installing gathering, laying a 65% W.I.)16 Km tie-in line to Oman's pipeline system and
The first of two planned exploration wells on building a 100 MMcfd/d gas processing plant. A Block 11 was drilled in the quarter. The horizontal step-out well was drilled in the third drilled to the Arab formation, found the objective quarter with testing being conducted at this time. wet and the well was plugged and abandoned. One existing well on the block is planned to be re-Wintershall, the operator, spud the second well, entered and flow tested in November. Production is
, in October. (APC 49% W.I.) expected to commence early 2003 and should average over 80 MMcf/d when the field is fully
On Block 13, Anadarko is reviewing existing developed. (APC 100% W.I.) The gas will be sold seismic data and developing an exploration plan. to the Omani government under a long-term sale The block is on trend with the giant Dukhan oil agreement priced initially at $1.20 per Mcf.field, which has estimated recoverable reserves of 5 billion barrels. A long-standing border dispute
Al Rayyan
WAQ-1
WAQ-2
In August, the Company completed the acquisition of Gulfstream Resources for $118 million in cash and assumed approximately $10 million of debt. Gulfstream's assets, concentrated in Oman and Qatar, have extensive production growth opportunities and significant exploration upside.
30
YEMEN
BAHRAIN
JORDAN
ArabianSea
IndianOcean
Gulf of Arden
Red Sea
IRAN
SAUDI ARABIAOMAN
QATAR
IRAQ
KUWAIT
SYRIA
EGYPT
SUDAN
ERITREA
ETHIOPIA
U.A.E.
Anadarko Acreage
Gas Field
Oil Fields
Third Quarter 2001
Other International
Australia
West Africa
Tunisia
Guatemala
North Atlantic Faroes
of oil and booked proved reserves at year-end 2000 were about 40 million BOE. The sale is part of the
Anadarko has successfully secured agreements on Company's ongoing strategy to divest of low two licenses (AC/P 25 and 27) in the Timor Sea, margin, low growth projects in its portfolio.Northwest Shelf of Australia. The Company will have the option to accept a 75% interest in the permits after drilling an exploration well on each
Exploration work on Marine IX block, offshore license area. The Sleeper prospect, located on Congo, proceeded to the point where the Company AC/P 27, is expected to spud in the first quarter and its partners now expect to drill the Rita 2002 followed by the Sebring prospect on AC/P prospect in the first quarter of 2002. (APC 43% 25. The wells will be drilled with Diamond W.I.) In Gabon, Anadarko completed the Offshore's semi-submersible rig the Ocean acquisition of 1,500 square kilometers of 3D General. A seismic option has also been secured seismic on the Agali license. The data is currently on another license (AC/P 26). The Company has being processed. (APC 50% W.I.) agreed to acquire 200 km of 2D seismic over the
Rossini prospect.
Anadarko already has working interest and In Jenein Nord, a 270-kilometer 2D seismic survey production facilities in the nearby Jabiru and was acquired in the southeast portion of the block Challis (APC 15% W.I.) fields and if the adjacent to the Hammouda Acacus discovery. A rig exploration is successful the Company should be has been secured and the Company expects to drill able to leverage off these assets to improve the 2 exploration wells early in 2002. A 12-month overall project economics. extension to the Anaguid permit has been
requested to allow for additional seismic acquisition prior to drilling a required exploration
In July, Anadarko sold 100% of its interest in well.Guatemala for $120.5 million to Perenco, a privately held European E&P Company. The full financial impact was $206 million, which reflects During the quarter, 2D seismic was shot across tax benefits generated from the sales. Production License 006 and 007. at the time of the sale averaged about 20,000 B/d
