Anadarko Announces Lucius Unitization

abarrelfullabarrelfull wrote on 20 Jul 2011 11:34
Tags: anadarko exxon gulf-of-mexico upstream usa

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Anadarko Petroleum Corporation (NYSE: APC) today announced the finalization of a unitization agreement with Exxon Mobil Corporation and co-owners to develop the Lucius field. The unitization includes portions of Keathley Canyon blocks 874, 875, 918 and 919 in the deepwater Gulf of Mexico. Anadarko will operate the unit with a 35-percent working interest. Following the unitization agreement, the Lucius interest owners entered into an agreement with the Hadrian South co-venturers whereby natural gas produced from the Hadrian South field will be processed through the Lucius facility in return for a production-handling fee and reimbursement for any required facility upgrades.

"As a result of these agreements, we expect Lucius to be among the most economically efficient projects in our portfolio, while providing important infrastructure in an emerging area of the Gulf of Mexico," said Al Walker, Anadarko President and Chief Operating Officer. "We've already placed orders for the long-lead items, including the truss spar floating production facility, which will have a capacity of more than 80,000 barrels of oil per day (BOPD) and 450 million cubic feet of natural gas per day. We look forward to working with our new co-owners and anticipate sanctioning the project later this year, with first production expected in 2014."

Anadarko and the co-owners also recently completed an extended well test at the Lucius discovery that provided assurance regarding the flow rates and excellent reservoir characteristics of the field. With equipment-constrained rates in excess of 15,000 BOPD of high-quality oil (29 degrees API gravity), the test provided additional confidence in Anadarko's previous resource estimates and indicated that Lucius can be developed with a minimal number of wells.

Co-owners in the Lucius unit include Plains Exploration & Production Company (NYSE: PXP) with a 23.3-percent working interest; Exxon Mobil Corporation (NYSE: XOM) with a 15-percent working interest; Apache Deepwater LLC, a subsidiary of Apache Corporation (NYSE: APA) (NASDAQ: APA) with an 11.7-percent working interest; Petrobras with a 9.6-percent working interest; and Eni Petroleum with a 5.4-percent working interest.

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