The first of many
GET READY FOR $5 GAS PEOPLE.
THEY SAY THEY ARE GOING TO SHIFT FUNDS TO ONSHORE U.S. DRILLING, BUT WE ALL KNOW EVENTUALLY THEY WILL RIG DOWN AND GO OUTSIDE THE U.S. TO GREENER PASTURES.
JIMMY CARTER WHA?
Anadarko May Shift Spending Elsewhere on U.S. Rig Ban
June 3 (Bloomberg) -- Anadarko Petroleum Corp., the Texas oil company that owns a stake in BP Plc’s leaking Gulf of Mexico well, said it may shift spending on capital projects to other regions after the U.S. extended a ban on deep-water drilling.
Capital spending this year will still total between $5.3 billion and $5.6 billion, as forecast before the April 20 rig explosion that triggered the oil spill, Anadarko said today in a statement. The company said it will consider reallocating money that would have been spent in the Gulf this year to other projects around the world, including U.S. onshore developments.
“We want to assure our stakeholders that we expect to meet our 2010 production targets and have already taken a number of actions to protect the value of our portfolio during the moratorium in the Gulf,” Anadarko Chief Executive Officer Jim Hackett said in the statement.
Anadarko halted all Gulf drilling under a moratorium that President Barack Obama ordered in the wake of the oil spill and extended by six months last week. The ban precludes issuance of new deep-water drilling permits, and companies were ordered to stop work on 33 wells that the government previously approved. Anadarko, which has offshore projects in West Africa and Brazil, gets about 25 percent of its output from the Gulf of Mexico.
“It’s not like Anadarko’s a one-trick pony and it’s all about the Gulf of Mexico,” said Scott Hanold, an analyst at RBC Capital Markets in Minneapolis who has an “outperform” rating on the company’s shares and owns none. “I mean, they’ve got a massive onshore position with some tremendous opportunities.”
Eleven workers were killed when Transocean Ltd.’s Deepwater Horizon rig, which London-based BP leased to drill its Macondo well in the Gulf, caught fire and exploded. Anadarko, based near Houston, has a 25 percent stake in Macondo.
Contracts were canceled on three rigs Anadarko had leased in the Gulf, using a force-majeure clause that can be triggered when events occur beyond the company’s control. The cancellations allow Anadarko to stop paying rent on rigs it will no longer be able to use.
Anadarko, which still has one Gulf rig under contract that it plans to use to complete a well, said it will incur costs of $30 million to $40 million related to the cancellations.
Anadarko’s Callisto prospect in the Gulf is scheduled to start production later this year at a rate of about 40 million cubic feet of natural gas a day, according to the statement.
Anadarko rose $1.44, or 3.3 percent, to $45.80 at 9:32 a.m. in New York Stock Exchange composite trading. Since the spill began, the company had lost 40 percent of its market value before today.
U.S. onshore projects that could be accelerated include developments in Texas, Colorado and Utah that are rich in gas liquids and oil, Anadarko spokesman John Christiansen said.
Last edited by sc281_99-0135; 06-03-2010 at 10:59 AM.