Anadarko Makes Gas Discovery at Atlas Prospect

Anadarko Petroleum has discovered natural gas at its Atlas prospect in the Eastern Gulf of Mexico. The discovery well is located on Lloyd Ridge Block 50, about 175 miles southeast of New Orleans.

The well was spudded in May in nearly 9,000 feet of water using Transocean's Deepwater Millennium drillship. It was drilled to the target depth of 19,800 feet and encountered 180 feet of gross pay, portions of which are thin-bedded reservoirs. Operations were suspended due to strong seasonal water currents, but the company intends to resume drilling at Atlas this fall with a sidetrack wellbore to obtain conventional core samples, which will help determine reservoir quality.

To date, Anadarko has made two discoveries -- Atlas and Jubilee -- out of three wildcat wells drilled in its Eastern Gulf of Mexico program. Both discoveries will need to be part of a larger development project in order to be commercially developed. The company plans to drill two more exploration prospects in the Eastern Gulf later this year.

The Atlas well reached total depth in 21 days, and expected total well costs are $13 million to $14 million -- well under budget. Anadarko holds a 100 percent interest in the Atlas discovery.

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. Within the overall Eastern Gulf, Anadarko has a 100 percent interest in 38 blocks.