Anadarko Makes Deepwater Gas Discovery at Jubilee Prospect

Anadarko Petroleum has made a natural gas discovery at its Jubilee prospect in the Eastern Gulf of Mexico. The discovery well, Atwater Valley 349 No. 1, is the first well drilled in Anadarko's Eastern Gulf of Mexico exploration program.

The discovery well was spudded in February in 8,800 feet of water, about 200 miles southeast of New Orleans. It encountered a total of 83 feet of net pay and was drilled to the target depth of 18,310 feet using Transocean's Deepwater Millennium drillship. Estimated field size is 40 million to 50 million barrels of oil equivalent (BOE). Anadarko holds a 100 percent interest in the Jubilee discovery and adjacent blocks.

"This discovery is encouraging for three reasons," said Anadarko Chairman, President and CEO Robert J. Allison, Jr. "First, we validated our geologic model and seismic imaging technology by finding productive sands exactly as predicted. Second, this provides a good start to our Eastern Gulf of Mexico exploration program, which targets estimated unrisked potential of about 2 billion BOE. And third, the pay zone found at Jubilee is one of the primary prospective intervals in our nearby Hawkeye prospect and all other prospects on our Eastern Gulf blocks."

The company believes Jubilee could be commercially produced when hub facilities are established in the area.

Toward that goal, Anadarko will soon begin drilling its high-potential Hawkeye prospect located at Lloyd Ridge Block 360 in 9,100 feet of water. Anadarko holds a 100 percent working interest in Hawkeye.

The company has committed to a third drilling slot on the Deepwater Millennium drill ship for possible delineation or to drill another deepwater prospect in the area. Within the overall Eastern Gulf, Anadarko has a 100 percent interest in 38 blocks, with 17 identified prospects.

"We've assembled a strong acreage position in the Gulf, we've completed extensive technical analysis, and we're excited to put our drilling program into action," Allison said. "We have the prospects and the expertise to drill these deepwater wells and achieve excellent economics. The Jubilee well reached total depth in less than 30 days and was drilled at a cost of about $15 million, which is significantly below our pre-drill estimate of $19.3 million."

In 2003, Anadarko plans to drill 40 wells in the Gulf, 10 of which are exploration wells. The company currently holds a total of 374 leases in the Gulf with 165 located in deep water. It also holds options to earn working interests in an additional 122 blocks.