Anadarko Obtains Drilling Permits For Well In Utica Shale - Ohio Regulator
Published: Sep 16, 2011
By Isabel Ordonez and Ryan Dezember
Of DOW JONES NEWSWIRES
Anadarko Petroleum Corp. (APC) has obtained permits to drill a well in the Utica Shale formation in eastern Ohio, according to the state's oil and gas regulator. The move makes the Houston company the latest energy firm to enter the latest big North American oil discovery.
Anadarko obtained this month permits to drill a horizontal well in Guernsey County targeting the Utica Shale, according to the Ohio Department of Natural Resources. Sparsely populated Guernsey County is located about 90 miles east of Columbus.
While Anadarko has been quieter about its activities in Ohio than some of its competitors, which include Hess Corp. (HES), Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK), the drilling permits show the Houston explorer has gained a foothold in the state. The size of Anadarko's position in the Utica Shale was not included in the information made public by the Ohio regulator.
Anadarko confirmed it has obtained the permits, but declined top disclose the size of its acreage in the Utica Shale. "For competitive reasons, we will provide acreage details once we have assembled our base position," Anadarko spokesman John Christiansen said in an email.
The Utica Shale sprawls below parts of eight states from Tennessee to New York, but explorers believe the richest reserves of oil and natural gas liquids lie in eastern Ohio.
Anadarko's Utica Shale acquisition could have a significant impact on the company production profile, said Subash Chandra, an analyst at Jefferies & Co. "While much of the focus has been on Anadarko's international exploration, production and reserve growth in the shales will be dramatic and significant to [the company] for many years to come," Chandra said.
Anadarko had been recently making headlines due to a string of oil-and-gas discoveries off Africa's coast. But investors are not giving enough credit to the company's "impressive" shale position in the U.S., Chandra said. Anadarko has 200,000 acres in the Eagle Ford in Texas, 260,000 acres in the Marcellus Shale in Pennsylvania, and 1.26 million acres in the Niobrara Shale in Wyoming and Colorado, according to Jefferies. The bank expects Anadarko's shale position across the U.S. to account for 10% of its 2011 capital expenditure budget and represent 10% of company-wide production by the end of the year.
Last week, Hess said it spent more than $1.34 billion acquiring 185,000 acres in Ohio. The New York company spent $593 million on a 50% interest in 200,000 acres held by Consol Energy Inc. (CNX) and spent another $750 million acquiring closely held Marquette Exploration LLC, which had 85,000 acres in the shale.
Oklahoma City-based explorers Devon and Chesapeake have begun to tout their positions in the Utica Shale. Devon said it has acquired 110,000 acres in Ohio, and Chesapeake said it has spent roughly $2 billion for drilling rights on 1.25 million acres.
-By Isabel Ordonez and Ryan Dezember, Dow Jones Newswires; 713-547-9207; email@example.com