Anadarko Petroleum (NYSE:APC) and Eni (NYSE:E) have reported additional exploration success in offshore Mozambique as this prolific area has yielded yet more oil and gas resources for future generations of energy consumers.
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Eni operates and holds a 70% interest in offshore Area 4 in the Rovuma Basin and has reported a large number of successful exploration wells here over the last few years. The latest discovery was the Coral 1 exploration well, located 40 miles off the coast of Mozambique. Eni drilled the well to a depth of 16,000 feet and found 75 feet of net natural gas play in an Eocene sand formation.
Eni estimates that the Coral discovery holds between 7 and 10 Tcf of natural gas in place, increasing the total resource potential in this part of the basin to 15 to 20 Tcf of natural gas in place.
The discovery was also significant for Eni because it confirmed the presence of a new exploration play independent of previous discoveries reported by the company. Eni now estimates that the total resource potential of Area 4 is between 47 and 52 Tcf of natural gas. The company plans to run a production test on the Coral discovery and drill at least five additional wells to delineate the potential of Area 4.
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Anadarko Petroleum is the operator of Area 1 and owns a 36.5% working interest in this offshore concession area. The company reported that the Golfinho well found approximately 193 feet of net natural gas pay in two separate Oligocene formations. This discovery is separate from previous discoveries in the area and added from 7 to 20 Tcf of recoverable resources to Area 1. Anadarko Petroleum must now engage in a considerable amount of future exploration and appraisal wells in order to narrow down this range further.
Anadarko Petroleum also reported a successful well at the Prosperidade complex, where the company was testing another zone at the Barquentine-1 well. The company reported production of 100 million cubic feet of natural gas per day at this well. Anadarko Petroleum plans to drill the Atum-1 exploration well next in offshore Area 1.
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Worldwide Offshore Exploration
Another operator that reported success in offshore exploration is Apache Corporation (NYSE:APA), which is active in the United Kingdom section of the North Sea. The company recently drilled an extension well in the Beryl Field and reported initial production of 11,625 barrels of oil and 13.1 million cubic feet per day of natural gas. Apache Corporation is planning to follow up this well with a new seismic survey of the area. Hess Corporation (NYSE:HES) is also involved as a non-operator at the Beryl Field and has a 22% ownership interest.
Marathon Oil (NYSE:MRO) is also active in offshore exploration and development and will soon operate the Vilje oil field located off Norway. The field is expected to produce 21,000 barrels of oil per day in 2012.
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The Bottom Line
The results of recent oil and gas exploration in various areas offshore Mozambique has been so good that it may have even surprised the operators active here. These resources will be needed to satisfy the increase in expected demand over the next few decades.
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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.