third quarter 2012 - s3.amazonaws.com · in the separate prosperidade complex, which is estimated...

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OPERATIONS REPORT THIRD-QUARTER 2012

October 29, 2012

Overview ····················································2

Drilling & Completion Efficiencies ·············4

Rockies ·······················································5

Southern & Appalachia ·····························8

Gulf of Mexico ········································ 11

International/Frontier ···························· 14

Deepwater Rigs Under Contract············· 18

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WWW.ANADARKO.COM | NYSE: APC

ANADARKO PETROLEUM CORPORATION

THIRD-QUARTER 2012

OVERVIEW

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. While Anadarko believes that its expectations are based on reasonable assumptions as and when made, no assurance can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including the following: Anadarko’s ability to meet financial and operating guidance; to achieve its production targets, successfully manage its capital expenditures and to complete, test and produce the wells and prospects identified in this presentation; to successfully plan, secure necessary government approvals, finance, build and operate the necessary infrastructure and LNG plant; to achieve its production and budget expectations on its mega projects; and the legislative and regulatory changes, such as the delays in processing and approval of drilling permits, exploration plans and oil response plans that may impact the Company’s Gulf of Mexico and International offshore operations resulting from the Deepwater Horizon events. Other factors that could impact any forward-looking statements are described in “Risk Factors” in the company’s 2011 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings and press releases. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements. Cautionary Note to U.S. Investors —The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms. We may use terms in this presentation, such as “resources,” “net recoverable resources,” “estimated recoverable resources,” “gross recoverable resource,” “gross recoverable natural gas resources,” and similar terms that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2011, File No. 001-08968, available from us at www.anadarko.com or by writing us at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

SALES VOLUMES

3Q12 MMBOE

3Q11 MMBOE

Rockies 30 28

Southern & Appalachia 19 13

Lower 48 49 41

Alaska 1 2

Gulf of Mexico 10 11

Total U.S. 60 54

International 8 7

Total Company 68 61

CAPITAL SPENDING

3Q12 $MM

Rockies 550

Southern & Appalachia 440

Lower 48 990

Alaska 8

Gulf of Mexico 81

Total U.S. 1,079

International 303

Midstream* 322

Capitalized Items/Other 75

Total Company* 1,779

*Includes WES capital investments of $139 million

AVERAGE OPERATED RIG ACTIVITY

3Q12 2Q12

Rockies 19 20

Southern & Appalachia 27 31

Lower 48 46 51

Alaska 0 0

Gulf of Mexico 1 2

Total U.S. 47 53

International 5 5

Total Company 52 58

SALES VOLUMES Third quarter sales volumes were above the high end of guidance at 68 million barrels of oil equivalent (BOE) or 739,000 BOE per day (BOE/d), an increase of 79,000 BOE/d over the 3rd quarter of 2011. The company achieved record liquids sales volumes of 322,000 barrels per day, about 73% of which was oil. These record liquids sales volumes were driven by significant growth in the U.S. onshore, particularly the Wattenberg Horizontal (HZ), Eagleford Shale, East Texas HZ and Permian plays, as well as strong production rates at Caesar/Tonga in the Gulf of Mexico.

Anadarko is increasing the mid point of its full-year sales volumes expectations by 3 million barrels to a range of 265 to 267 million BOE. The company expects to achieve these enhanced results without increasing its anticipated capital investments.

CAPITAL SPENDING WITHIN GUIDANCE Capital investments during the 3rd quarter were below the low end of guidance at $1.6 billion, excluding capital investments of Western Gas Partners, LP (WES). For the full-year 2012, capital expenditures are anticipated to remain within the range of $6.6 to $6.9 billion, excluding WES.

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THIRD-QUARTER 2012

GROWTH PLAYS LEAD TO RECORD SALES VOLUMES IN U.S. ONSHORE Anadarko reported record U.S. onshore sales volumes of approximately 542,000 BOE/d for the quarter, an increase of more than 80,000 BOE/d from the 3rd quarter of 2011. This record performance was primarily attributable to growth in the Wattenberg HZ, Eagleford Shale, East Texas HZ, Greater Natural Buttes and Marcellus Shale plays. In these areas, sales volumes increased by 33% over the comparable quarter of 2011 and by 8% over the 2nd quarter of 2012. U.S. onshore liquids sales volumes for the 3rd quarter were 24,000 barrels per day higher than during the same period of 2011, an increase of 16%.

INCREASED RESOURCE RANGE IN WATTENBERG HZ PROGRAM During the quarter, the company increased the estimated recoverable resources in the Wattenberg HZ program to a new range of 1 billion to 1.5 billion BOE. The 500-million barrel increase to the low end of the range is the result of the exceptional performance of both the Niobrara and Codell formations, along with newly identified down-spacing opportunities within the field. The Wattenberg HZ program is currently producing more than 37,000 gross BOE/d from about 115 wells, with about 75% of the wells producing from the Niobrara formation and the other 25% producing from the Codell formation. The company is running 10 operated rigs in the program and generating rates of return exceeding 100% in the current price environment.

SUCCESSFUL APPRAISAL DRILLING LEADS TO INCREASED RESOURCE RANGE IN MOZAMBIQUE The company completed a successful four-well appraisal drilling program in the Golfinho/Atum complex, located entirely within its operated Offshore Area 1 Block. Based on these results, the partnership increased the estimated gross recoverable resources in the Golfinho/Atum complex to a new range of 15 to 35 trillion cubic feet (Tcf) of natural gas. The appraisal program confirmed communication between the discovery areas, indicating Golfinho and Atum is one large accumulation comprised of two high-quality reservoirs.

In the separate Prosperidade complex, which is estimated to hold 17 to 30+ Tcf of recoverable natural gas resources, the drillstem testing (DST) program was completed with the testing of three zones in the Lagosta-2 well. Each of the three zones flowed at equipment-constrained rates of approximately 100 million cubic feet per day (MMcf/d), with minimal pressure drawdown. The results of the DSTs, along with data collected from observation gauges placed in the Lagosta-1 well located more than four miles to the south, demonstrate connectivity as well as very high permeability between wells, indicating the tremendous reservoir quality and deliverability of the reservoir.

EXPLORATION AND APPRAISAL SUCCESS IN GHANA In the West Cape Three Points Block offshore Ghana, the company and its partners conducted a successful DST at the Akasa-1 well, where strong flow rates were recorded.

During the quarter, the company announced a discovery at the Wawa exploration well in the Deepwater Tano Block, which encountered approximately 43 net feet of oil pay and 65 net feet of gas-condensate pay in Turonian-aged reservoirs. Pressure data indicate the Wawa discovery is a separate and distinct accumulation from the adjacent TEN (Tweneboa, Enyenra, Ntomme) complex, and extends the presence of hydrocarbon-bearing formations more than six miles to the north of the Enyenra-3A well.

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THIRD-QUARTER 2012

IMPROVED DRILLING & COMPLETION EFFICIENCIES

Drilling Efficiencies: In the Marcellus Shale, drilling and completion costs continue to

improve with the average drilling cost showing a 14% reduction during the quarter compared to drilling costs incurred during 2011. Average completion costs for the quarter were reduced by about $1.5 million per well compared to the average completion cost during 2011. Additionally, the number of days on location for completion operations during 2012 has been reduced by about 40% compared to 2011.

In the Bone Spring and Avalon Shale plays in West Texas, the company improved its spud-to-rig-release time during the 3rd quarter by 18% and 11%, respectively, compared to the 2nd quarter of 2012.

In Mozambique’s Offshore Area 1 Block, the company has dramatically improved its costs and drilling times. The company has drilled 200% more feet per day in its last four wells than in its original four wells, providing for a decrease in costs of about 70%.

LOE/BOE

Lease Operating Expense (LOE) Improvements: Since 2008, Anadarko has realized a 29% improvement in LOE per BOE.

Mozambique: Cost and Days per Well (excludes bypass core and testing ops)

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THIRD-QUARTER 2012

ROCKIES

CAPITAL

SPENDING AVERAGE

RIG ACTIVITY

3Q12

$MM

3Q12

Oper

2Q12

Oper

Greater Natural Buttes 130 6 8

Wattenberg 305 10 9

Pinedale / Jonah 12 0 0

Wamsutter 19 1 1

Powder River Basin 8 1 2

EOR 60 1 0

Other 16 0 0

Total 550 19 20

Anadarko’s Rockies assets delivered record sales volumes of 325,000 BOE/d in the 3rd quarter. These record sales volumes represent a 7% increase over the same period in 2011, including a 19% increase in oil sales volumes, and were achieved while incurring significant downtime due to third-party natural gas liquids (NGL) takeaway issues and ethane rejection in certain producing areas. On average, Anadarko operated 19 rigs during the quarter and drilled a total of 186 wells in the region.

SALES VOLUMES

3Q12

Oil

MBbl/d

3Q12 NGLs

MBbl/d

3Q12 Gas

MMcf/d

3Q11 Oil

MBbl/d

3Q11 NGLs

MBbl/d

3Q11 Gas

MMcf/d

Greater Natural Buttes 3 11 472 2 13 389

Wattenberg 34 13 262 23 14 215

Pinedale / Jonah 1 4 98 1 3 105

Wamsutter 2 10 105 2 10 92

Powder River Basin 1 0 316 0 0 365

EOR* 9 0 1 12 0 1

Other 1 6 125 3 5 127

Total 51 44 1,379 43 45 1,294

*Reflects Salt Creek Joint Venture

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THIRD-QUARTER 2012

Wattenberg/Greater DJ and Powder River Basin: During the quarter, Anadarko increased its estimate of net recoverable

resources in the core Wattenberg field to a range of 1 billion to 1.5 billion BOE. This 500-million barrel increase to the low end of range is supported by strong results from the Niobrara and Codell formations, along with newly identified down-spacing opportunities.

The Wattenberg field recently achieved a milestone of 100,000 BOE/d of net sales volumes and set a quarterly sales-volumes record during the 3rd quarter, averaging 91,300 BOE/d. The quarterly record was 23% higher than the 3rd quarter of 2011 and 6% above the 2nd quarter of 2012. The growth was driven by oil sales volumes, with a 42% increase compared to the 3rd quarter of 2011 and a 13% increase over the 2nd quarter of 2012.

Exceptional results in the Wattenberg HZ drilling program continued to drive the growth of the field during the quarter. The company is currently producing more than 37,000 BOE/d gross from about 115 horizontal wells, which are generating returns in excess of 100%.

On average, the company operated nine horizontal rigs during the quarter and drilled a total of 45 horizontal wells in the Niobrara and Codell formations. The company recently increased its operated rig count to 10 horizontal rigs and plans to maintain this level of activity through the end of 2012. Anadarko also drilled 19 vertical wells utilizing one operated rig.

Anadarko commissioned an oil gathering system during the 2nd quarter of 2012, transporting approximately 1 million barrels of oil to date. The system has eliminated more than 5,500 oil-hauling truck trips, enhanced safety and improved margins by about $1 per barrel.

Drilling activity continued during the quarter in the Powder River Basin horizontal program, where multiple oil objectives are being tested across the company’s 350,000 net-acre position. The company currently has two operated rigs drilling horizontal wells in the basin, with six horizontal wells producing.

ROCKIES

Wattenberg HZ Net Sales Volumes

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THIRD-QUARTER 2012

Greater Natural Buttes: Net sales volumes averaged 554 million cubic feet equivalent per day

(MMcfe/d) for the quarter, a 15% increase over the 3rd quarter of 2011, and a 4% increase over the 2nd quarter of 2012. During the quarter, the company achieved a gross weekly production record of 627 MMcf/d. The increase in sales volumes included a reduction of approximately 2,000 barrels per day of NGLs resulting from periodic ethane rejection during the quarter.

Anadarko drilled 85 wells during the quarter running an average of six operated rigs. The company started the quarter with eight rigs, ended with four rigs and plans to maintain this activity level through the end of 2012.

The company drilled and completed the lower Mesaverde Blackhawk interval in 12 new development wells during the quarter, with production from this interval averaging 1.3 MMcf/d per well.

Expansion of the cryogenic facilities at the Chipeta plant was recently completed, increasing Anadarko’s contracted cryogenic processing capacity to approximately 500 MMcf/d. This is expected to result in an incremental recovery capability of more than 7,000 net barrels per day of NGLs.

Wamsutter: In the Wamsutter field, Anadarko drilled 12 operated wells with one rig.

Pinedale/Jonah: The company participated in drilling 30 wells in the Pinedale field during the

quarter, running an average of seven non-operated rigs.

ROCKIES

Chipeta Cryogenic Processing Plant

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THIRD-QUARTER 2012

SALES VOLUMES

3Q12

Oil

MBbl/d

3Q12 NGLs

MBbl/d

3Q12 Gas

MMcf/d

3Q11 Oil

MBbl/d

3Q11 NGLs

MBbl/d

3Q11 Gas

MMcf/d

Permian 8 2 48 6 2 50

Marcellus 0 0 333 0 0 139

Eagleford 13 11 75 8 3 34

Bossier 0 0 92 0 0 98

East Texas/Haynesville 2 10 176 1 6 108

Hugoton 0 2 41 0 2 43

Ozona 0 3 26 0 3 29

Chalk 6 5 31 6 5 40

Other 2 2 25 1 1 53

Total 31 35 847 22 22 594

SOUTHERN & APPALACHIA

CAPITAL

SPENDING AVERAGE

RIG ACTIVITY

3Q12

$MM

3Q12

Oper

2Q12

Oper

Permian 81 5 5

Marcellus 146 4 5

Eagleford 17 9 9

Bossier 3 0 0

East Texas/Haynesville 138 7 8

Hugoton 0 0 0

Ozona 0 0 0

Chalk 17 2 3

Other 38 0 1

Total 440 27 31

During the 3rd quarter, sales volumes in the Southern & Appalachia region averaged approximately 207,000 BOE/d, a 44% increase over the 3rd quarter of 2011 and a 7% increase relative to the 2nd quarter of 2012. These increases were driven by the company’s focus on higher-margin, liquids-rich opportunities in the Eagleford Shale, Permian Basin and East Texas/Haynesville areas. Total liquids sales volumes for the region grew by approximately 21,300 barrels per day (48% increase) over the 3rd quarter of 2011 and by about 10,200 barrels per day (18% increase) over the 2nd quarter of 2012.

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THIRD-QUARTER 2012

Eagleford: Anadarko’s Eagleford Shale delivered sales volumes of 36,400 BOE/d in

the quarter, more than doubling sales volumes from the 3rd quarter of 2011 and increasing sales volumes by 23% over the 2nd quarter of 2012. The company set a weekly net production record of more than 39,000 BOE/d during the quarter and daily gross processed production record estimated at approximately 112,000 BOE/d.

During the quarter, the company operated nine conventional rigs, one spudder rig and three dedicated 24-hour completion crews. The company spud 76 wells, completed 56 wells and achieved first production from 61 wells.

Anadarko drilled 28 wells during the quarter in less than 10 days from spud-to-rig-release as it continues to realize drilling efficiencies throughout the field.

During the quarter, Anadarko enhanced its ability to deliver uninterrupted sales volumes by installing booster turbines at the company’s primary delivery points.

Permian: Anadarko’s average sales volumes for the quarter were more than 17,800

BOE/d, representing an increase of 14% over the 3rd quarter of 2011. The value of this growth was further enhanced as a result of a 43% increase in higher-margin oil sales volumes from the Bone Spring and Avalon Shale. For the first three quarters of 2012, oil sales volumes increased 69% over the same period in 2011.

The company exited the 3rd quarter with two operated rigs and three non-operated rigs drilling in the Bone Spring horizontal play, as well as two operated rigs and one non-operated rig drilling in the Avalon Shale. During the quarter, 22 wells were spud and 25 wells were completed.

Construction of a 100 MMcf/d cryogenic processing plant is under way to support the increased drilling activity in the Bone Spring and Avalon Shale. The plant is targeted for startup in early 2013.

East Texas/Haynesville: The company’s average sales volumes for the quarter were 41,100 BOE/d, an

increase of 62% relative to the 3rd quarter of 2011 and an increase of 13% over the 2nd quarter of 2012.

During the quarter, Anadarko achieved first production from 12 Haynesville horizontal wells and four Cotton Valley horizontal wells, and it ended the quarter with six operated rigs drilling.

Anadarko continues to see cost improvements in its liquids-rich Haynesville wells. During the quarter, wells were completed with an average lateral length of 5,200 feet for an average cost of $7.4 million compared to the 3rd quarter 2011, when wells were completed with an average lateral length of 3,800 feet and a cost of $7.8 million. This resulted in a cost savings of more than 30% on a dollar-per-foot basis.


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THIRD-QUARTER 2012

Marcellus: Anadarko’s sales volumes for the quarter averaged 333 MMcf/d, an increase

of 140% over the 3rd quarter of 2011. The company ended the quarter producing approximately 1.3 billion cubic feet of natural gas per day (Bcf/d) gross from about 385 wells. During the quarter, the company achieved an operated production record of approximately 400 MMcf/d.

The company spud 15 wells during the quarter using four operated rigs, while spudding 28 wells with an average of 10 non-operated rigs.

Anadarko continued to improve drilling and completion costs as a result of the company’s continuing focus on capital efficiency and optimization. The average drilling cost during the quarter was $2.4 million per well with more than 60% of the wells costing less than $2.3 million. The company reduced average completion costs for the quarter by approximately $1.5 million per well compared to the average completion cost during 2011. In addition, the cost of hydraulic fracturing has decreased by approximately 40% per well since 2011.

During the quarter, the company completed its second horizontal well targeting the Geneseo Shale, which lies about 1,000 feet shallower than the Marcellus Shale. Results to date from both Geneseo wells have been encouraging, with the most recent well slightly outperforming the initial well. Evaluation is ongoing with additional drilling planned for 2013 to further delineate the play.

Utica: In the company’s evaluation of the Utica Shale, five wells are currently on

production and two additional exploratory wells are expected to begin testing by the end of the year. The company expects to complete the evaluation of its initial exploration program in early 2013.


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THIRD-QUARTER 2012

The Gulf of Mexico region achieved sales volumes of approximately 105,500 BOE/d, which includes the effects of weather that forced the shut-in of approximately 1 million BOE during the quarter.

Anadarko closed its joint-venture agreement for the Lucius development during the quarter. Under the terms of the agreement, Anadarko will be carried for $556 million of development costs in exchange for a 7.2% working interest. The carried amount is estimated to represent 100% of Anadarko’s expected capital obligation through first production.

GULF OF MEXICO

SALES VOLUMES

3Q12

Oil

MBbl/d

3Q12 NGLs

MBbl/d

3Q12 Gas

MMcf/d

3Q11 Oil

MBbl/d

3Q11 NGLs

MBbl/d

3Q11 Gas

MMcf/d

Total 51 9 272 50 6 382

*

*Includes the impact of weather-related downtime

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THIRD-QUARTER 2012

PRODUCING PROPERTIES Caesar/Tonga: Green Canyon 683/726/727/770 (APC WI 33.75%) Current production at Caesar/Tonga is averaging about 45,000 BOE/d, and

the company recently spud its fourth development well in the field.

Independence Hub: Independence Hub averaged 255 MMcf/d of gross production

(170 MMcf/d net) during the quarter, compared to 356 MMcf/d of gross production (225 MMcf/d net) during the 2nd quarter of 2012.

DEVELOPMENT Lucius: Keathley Canyon 874/875/918/919 (APC WI 27.8%) Anadarko is currently drilling a development well to delineate the western

flank of the Lucius development.

Construction of the hull, topsides and mooring system continues with first production on schedule for the second half of 2014.

GULF OF MEXICO

Lucius Hull Construction

Lucius Subsea Illustration

Lucius Hull Construction

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THIRD-QUARTER 2012

APPRAISAL Heidelberg: Green Canyon 859/860/903/904/948 (APC WI 44.25%) During the quarter, pre-FEED (front-end engineering and design) work to

confirm the development concept, design, costs and schedule continued at Heidelberg. In early 2013, Anadarko anticipates sanctioning this potential stand-alone development, which has estimated recoverable resources of more than 200 million barrels of oil.

Shenandoah: Walker Ridge 51/52 (APC WI 30%) An appraisal well is currently being drilled to test the down-dip extent of

the discovery well, where approximately 300 net feet of high-quality oil pay was found in Wilcox reservoirs. The appraisal well, which is being drilled approximately 2,000 feet down-dip and 5,600 feet southwest of the discovery well, has a planned total depth of 32,000 feet and is located in approximately 6,000 feet of water.

EXPLORATION Coronado: Walker Ridge 143 (APC WI 15%) The operator spud the Coronado exploration well during the 2nd quarter

with a planned total depth of 33,000 feet to test the Lower Tertiary section in the same mini-basin as the Shenandoah discovery.

Yucatan: Walker Ridge 95 (APC WI 15%) The operator spud the Yucatan exploration well during the quarter. This Lower

Tertiary prospect will test a three-way closure located approximately six miles south and syncline separated from Anadarko’s Shenandoah discovery. The well has a planned total depth of 32,000 feet.

Phobos: Sigsbee Escarpment 39 (APC WI 30%) Anadarko expects to be fully carried on the estimated cost of the Phobos

well, which is scheduled to spud during the 4th quarter of 2012. The company has secured a rig to drill Phobos, which is a multiple-objective test of the Pliocene, Miocene and Upper and Lower Wilcox sections. The carry is the result of two separate farmout agreements, the latest of which was finalized during the 3rd quarter.

GULF OF MEXICO

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THIRD-QUARTER 2012

SALES

VOLUMES CAPITAL

SPENDING

3Q12 Oil

MBbl/d

3Q11 Oil

MBbl/d

3Q12

$MM

Alaska 10 14 8

Algeria* 61 54 39

Brazil 0 0 63

China* 11 14 10

Ghana/W. Africa* 19 10 83

Mozambique 0 0 108

Other 0 0 0

Total 101 92 311

*Quarterly sales volumes are influenced by the size, timing and scheduling of tankers.

INTERNATIONAL/FRONTIER

Anadarko’s International/Frontier sales volumes of approximately 101,000 barrels of oil per day (BOPD) during the quarter were 10% higher than the same period of 2011. The increase was primarily driven by the timing of tanker liftings and the amended contract terms associated with the Algeria tax resolution.

Anadarko’s partnership in Mozambique increased the estimated recoverable resources of the Golfinho/Atum complex to a range of 15 to 35 Tcf after successfully completing a four-well appraisal drilling program. In the separate Prosperidade complex, Anadarko completed its testing program with each of the three zones tested at the Lagosta-2 well flowing at equipment-constrained rates of about 100 MMcf/d.

Offshore Ghana, the company announced that the Wawa exploration well discovered approximately 43 net feet of oil pay and 65 net feet of gas-condensate pay. In addition, a successful DST was conducted at the Akasa-1 well.

Mozambique: ~100 MMcf/d DST

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THIRD-QUARTER 2012

DEVELOPMENT Alaska: Gross production from the Colville River Unit averaged approximately

57,600 BOPD during the quarter, down almost 25% from the 2nd quarter of 2012, primarily due to a planned shutdown of the central processing facilities for maintenance.

Algeria: During the quarter, gross production from the Hassi Berkine South and

Ourhoud central processing facilities averaged approximately 313,000 BOPD. Net sales volumes of 61,200 BOPD during the quarter were 13% higher than the 3rd quarter of 2011, primarily due to the amended contract terms associated with the Algeria tax resolution.

Construction at the El Merk central processing facilities and associated infrastructure in Block 208 is progressing, with commissioning of the first train in its final stages. First oil is anticipated around the end of 2012.

China: Gross production for the quarter averaged approximately 41,600 BOPD

which is about 10% lower than the 2nd quarter of 2012. Drilling recently resumed to stabilize production.

Ghana: Gross production at the Jubilee field averaged about 77,000 BOPD during

the quarter, with production of approximately 86,000 BOPD at the end of the quarter.

The operator performed two successful acid stimulations early in the 3rd quarter, bringing the total number of successfully stimulated wells to five. Based on the high level of success achieved by the acid stimulations to date, the partnership expects to continue to perform additional acid stimulations with one additional stimulation planned for the 4th quarter.

The Jubilee field Phase 1A drilling program, which was initiated during the 1st quarter of 2012, continued with the successful drilling of two injection wells during the quarter. The operator plans to complete three producing wells in the coming months, which are expected to contribute to an increase in production toward facility capacity.


El Merk Central Processing Facility

16



THIRD-QUARTER 2012

EXPLORATION/APPRAISAL Mozambique: Offshore Area 1 (APC WI 36.5%, operator) During the quarter, Anadarko completed its initial appraisal drilling

program in the Golfinho/Atum complex with four successful appraisal wells. Based on the drilling results, the partnership increased the estimated gross recoverable resources in the complex to a new range of 15 to 35 Tcf. In addition, the appraisal program confirmed static communication between the discovery areas, indicating Golfinho and Atum are one large accumulation comprised of two high-quality reservoirs, located entirely within Anadarko’s operated Offshore Area 1 Block. The Golfinho-2 appraisal well encountered more than 250 net feet of natural gas pay. The updip Golfinho-3 appraisal well encountered nearly 220 net feet of natural gas pay, and the field’s downdip limit was proven by the Golfinho-4 appraisal well, which encountered an impressive 564 net feet of sand, and confirmed the water contact with the top 108 net feet being natural gas pay. The final well in the initial appraisal drilling program at Atum-2 encountered more than 280 net feet of natural gas pay. As a result of this drilling, the southern and downdip area of the Golfinho/Atum complex has been confirmed, and potential future appraisal drilling activity will focus on confirming the updip and northern extent of the complex.

The company completed its testing program in the separate Prosperidade complex during the quarter with DSTs at the Lagosta-2 well. Tests were conducted on one Eocene sand and two Oligocene sands with each of the tests flowing at equipment-constrained rates of about 100 MMcf/d, with minimal drawdown of the reservoir. Observation gauges previously placed in the Lagosta-1 well, located 4.4 miles to the south, measured the pressure response in all three zones. This information demonstrates connectivity as well as very high permeability between wells, indicating tremendous reservoir quality and deliverability of the wells.


35 - 65+ Tcf Gross Recoverable Resources

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THIRD-QUARTER 2012

Mozambique (Continued) The company currently has two operated drillships in Mozambique’s

Offshore Area 1 Block. One drillship is conducting an integrated testing program in the Golfinho/Atum complex. As part of the testing program, gauges have been set in three wells to monitor pressure response. Information from the flow tests and offset pressure response will be used in the reserve certification program for the field as we move this accumulation on a parallel path with the Prosperidade field. The second drillship is currently drilling the Pérola Negra (Black Pearl) exploration prospect in the southern part of the Offshore Area 1 Block.

Ghana: Deepwater Tano (APC WI 18%) During the quarter, the company announced a discovery at the Wawa

exploration well, which encountered approximately 43 net feet of oil pay and 65 net feet of gas-condensate pay in Turonian-aged reservoirs. Samples indicate good quality oil, between 38 and 44 degrees API gravity, and pressure data indicate the discovery is a separate and distinct accumulation from the adjacent TEN complex. The discovery extends the presence of a hydrocarbon-bearing formation more than six miles to the north of the Enyenra-3A well and enhances the value of the TEN complex. An appraisal program is being planned for 2013.

It is anticipated that the TEN Plan of Development will be submitted to the Ghanaian government during the 4th quarter.

The Okure-1A well is currently being drilled and is targeting a slightly deeper section than the pay sections encountered in the TEN complex. If successful, this could open a new play on the southern end of the block.

West Cape Three Points (APC WI 31%) During the quarter, a successful DST was conducted at the Akasa-1 well,

demonstrating strong flow rates of good-quality oil. The results of the DST are being incorporated into the partnership’s evaluation of development options and further appraisal plans for the MTAB (Mahogany, Teak, Akasa and Banda) complex.

Côte d’Ivoire: Block CI-103 (APC WI 40%) Planning is under way for a multi-well drilling program to appraise the Paon

discovery, and to explore additional opportunities in the block during 2013. Current plans for the block include two exploration wells, an appraisal well and a DST.

Block CI-515/516 (APC WI 50%, operator of exploration phase) Acquisition of a 3D seismic survey covering approximately 4,400 square

kilometers is under way.


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THIRD-QUARTER 2012

DEEPWATER RIGS UNDER CONTRACT

Deepwater Millennium

third quarter 2012 - s3.amazonaws.com · in the separate prosperidade complex, which is estimated...

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