Anadarko Starts Production from Two Gulf of Mexico Fields

Anadarko Petroleum Corporation announced that it recently began production from the Tanzanite and Hickory fields, two sub-salt discoveries made in 1998 off the coast of Louisiana in the Gulf of Mexico.

The two fields began producing from one well each in the final week of December. Currently Tanzanite is producing more than 10,000 barrels of oil and 23 million cubic feet (MMcf) of gas per day from the first completed well, the EI 346 A-1. Hickory is producing 62 MMcf of gas and 4,100 barrels of condensate per day from the GI 116 #1, or Hickory A-1 well.

"Clearly, Anadarko's ongoing commitment in the offshore sub-salt trend is continuing to deliver excellent results," said Robert J. Allison, Jr., Chairman and Chief Executive Officer. "The production from Hickory and Tanzanite will add an estimated 10 million energy equivalent barrels to our net production in 2001."

A second well is currently being completed at Tanzanite and is expected to go on production in February 2001. Anadarko owns a 100 percent working interest in this field, which is located in Eugene Island Block 346 in 314 feet of water.

When both wells are on-line, oil production from the Tanzanite field is expected to reach 15,000 barrels per day, the platform's capacity for oil, and about 50 MMcf per day of natural gas. Initially this field is expected to produce crude oil at high rates from the main reservoir, but oil production will decline over time and be replaced by rising natural gas production from the gas cap. The Tanzanite platform has the capacity to produce as much as 200 MMcf a day of gas.

At Hickory, three additional wells will be completed and tied in over the next few months. When all four wells are completed, production is expected to exceed 200 MMcf a day. Hickory is located in 320 feet of water in Grand Isle Blocks 110, 111 and 116. Anadarko operates the field and owns a 50 percent working interest in partnership with Shell Exploration & Production Company, which holds a 37.5 percent working interest, and Ocean Energy, Inc., with a 12.5 percent working interest.

The Company recently completed drilling a fifth successful well in the Hickory field area. The GI 110 #2 well was drilled to a total depth of 21,269 feet and encountered 87 feet of pay. The partners are evaluating a plan to drill a directional well from the platform and put this well on production, once all four existing Hickory wells are producing.

Throughout the Gulf of Mexico, Anadarko is allocating $414 million to drill 46 wells this year, versus 27 in 2000.

"We have a well-balanced, growing portfolio of high-potential deep water prospects and sub-salt prospects that we'll be actively exploring this year, combined with a lot of low-risk, shallow water projects," Allison said.