Second K2 appraisal well confirms significant discovery
The following news release was issued by Anadarko Petroleum
HOUSTON----May 27, 2003--Anadarko Petroleum Corporation (NYSE:APC) and its partners today announced another successful deepwater subsalt appraisal well on their K2 discovery, located in the Gulf of Mexico on Green Canyon Block 562, about 180 miles south of New Orleans.
"We're pleased to discover the potential field size of K2 could be larger than Anadarko's previous estimates," said Anadarko Chairman, President and CEO Robert J. Allison, Jr. "The K2 No. 3 appraisal well was intended to confirm the northwestern edge of the field, but the field extends even deeper and farther beyond what we had predicted. In fact, the outermost limits of K2 are still unknown."
Later this summer, Anadarko plans to drill an exploration well on the northern adjacent block, Green Canyon Block 518, in which the company holds a 100 percent working interest.
The K2 No. 3 well was spudded by Agip Petroleum Co. Inc. in February 2003 in about 3,900 feet of water. The well reached a total depth of more than 27,000 feet and encountered a total of 208 feet of oil pay in two sands with no oil-water contact. The findings confirm the prior estimated gross reserves of about 100 million barrels of oil equivalent, and the lack of an oil-water contact suggests additional reserve potential. The well extended the limit of the proven oil column down dip an additional 800 feet on the K2 structure.
Anadarko holds a 52.5 percent working interest in the project; other partners include Agip (operator - 18.2 percent), ConocoPhillips Company (16.8 percent) and Unocal (12.5 percent).
The K2 partner companies expect to make a decision on development plans as early as this summer. They are considering options including a separate structure or a tie-back to the nearby Marco Polo facility, which will be installed late this year and operated by Anadarko. First production from K2 could be late 2004 or early 2005.
In 1999, a No. 1 well and sidetrack were drilled on the same block, about 4,000 feet away. The wells encountered only one zone with average net pay of 60 feet. In September 2002, the No. 2 well found a total of 339 feet of pay. The No. 2 was also sidetracked up dip to evaluate the extent of the discovery and encountered 84 feet of net pay from three intervals.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that its goals will be achieved. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While Anadarko makes these forward-looking statements in good faith, neither Anadarko nor its management can guarantee that the anticipated future results will be achieved. Anadarko discloses proved reserves that comply with the Securities and Exchange Commission's (SEC) definitions. Additionally, Anadarko may disclose estimated reserves, which the SEC guidelines do not allow us to include in filings with the SEC. See Additional Factors Affecting Business in the Management's Discussion and Analysis included in the company's 2002 Annual Report on Form 10-K.
Updated: May 2003