Anadarko Announces 2002 Canadian Budget

Anadarko Petroleum Corporation currently one of Canada's most active drillers - has budgeted U.S. $270 million in capital spending for Canada in 2002 and announced early success from its winter drilling program with three natural gas discoveries and several successful oil field development projects.

"During this winter season, Anadarko significantly increased its Canadian exploratory drilling program, and now we're starting to see positive returns with these discoveries," said Robert P. Daniels, Anadarko Canada Corporation (ACC) president. "Canada provides Anadarko with an excellent opportunity to build reserves and production through exploratory drilling. In fact, our goal is to grow overall production by 7 percent by year-end 2002.

"We continue to see tremendous potential in the Western Canadian Sedimentary Basin and frontier areas. As one of the most active drillers here, we plan to continue to test our growing inventory of prospects in order to take advantage of the next upturn in oil and gas prices," Daniels added.

The company has reported several natural gas and oil discoveries in Western Canada as a result of its active exploration and development drilling program.

In Northeast British Columbia, the Sahtenah b-83 discovery well flowed at a rate of 9.7 million cubic feet of gas per day (MMcf/d). The new field discovery well is expected to be on production early in the second quarter. Two similar new exploration wells are currently drilling, with results expected in late February.

The Adsett b-82-G, a Slave Point discovery also located in Northeast British Columbia, tested at 4.8 MMcf/d of gas before stimulation and is expected to be on stream in mid-February at a planned rate of 4.0 MMcf/d. Five additional exploration wells are planned for the first quarter. Anadarko controls over 40,000 net acres in this play.

In the Saddle Hills area of northern Alberta, the 15-28 discovery well tested at 5.6 MMcf/d of gas and is expected to begin producing in the first quarter. Based on this exploratory success, Anadarko plans to drill three offset wells in 2002 and pursue additional exploratory opportunities nearby.Anadarko holds a 100 percent working interest in all three of these discovery wells.

In Northwest Alberta, Anadarko continues to develop the Dawson oil field, a Devonian Slave Point discovery completed in October 2001. Four offset wells have been completed.Dawson 3-11, tested at 1,200 barrels of oil per day (BOPD), (ACC holds a 90 percent working interest); Dawson 11-11, tested at 530 BOPD, (ACC holds a 90 percent working interest); Dawson 9-8, tested at 442 BOPD, (ACC holds a 75 percent working interest); Dawson 6-17, tested at 400 BOPD, (ACC holds a 75 percent working interest).

Overall fourth-quarter 2001 production from Anadarko's Dawson development reached an average of 2,350 barrels of oil equivalent per day. The company plans to drill 30 more wells in the Dawson area in 2002.

Anadarko intends to maintain a strong level of activity in Canada in 2002. Nearly one-third of its (U.S.) $270 million budget in Canada is designated for exploration in Northeast British Columbia, Central and Northern Alberta (the Deep Basin) as well as the southern Northwest Territories. Approximately 50 exploration wells are planned for 2002, with activity focused primarily toward gas.

The Canadian capital budget includes approximately (U.S.) $190 million for development projects that will increase reserves and production in Northeast British Columbia and the Deep Basin. Development programs will continue in the heavy oil area of Northeast Alberta and shallow gas fields of Southwest Saskatchewan. Approximately 380 development wells are planned.

Anadarko plans to have a peak of 25 drilling rigs working during the remainder of the winter drilling season. Through the end of the first quarter, nine of the 25 rigs will be drilling exploratory wells.

During the fourth quarter of 2001, Anadarko's peak rig count in Canada reached 24 operated rigs, making Anadarko the No. 1 operator in Canada during that period according to industry statistics. The company achieved a 92 percent drilling success rate from 488 wells spudded during the year.

In addition, Anadarko more than doubled its acreage position to 4.9 million net acres at year-end, compared with year-end 2000. A portion of the increase, 280,000 net acres, was acquired at government land sales, including more than 31,000 net acres in the fourth quarter. These additions augmented the acreage added by Anadarko in early 2001 through the Berkley Petroleum Corp. acquisition.

Late in 2001, Anadarko successfully completed the Altares C-15-I well, which was brought onstream at 5 MMcf/d of gas. Six similar leads have been identified, with two exploratory wells scheduled to be drilled in the first quarter. The first of these two exploratory tests, the Altares C-14-J, was spudded in early December 2001 and is expected to reach targeted depth in early February. Anadarko holds more than 980,000 net acres in British Columbia and has seven rigs active in the province. The company holds a 100 percent working interest in the Altares wells.