Anadarko to spend over $1B on Gulf of Mexico and international assets in 2017

American oil and gas company Anadarko Petroleum Corporation plans to spend around $1.1 billion on its U.S. Gulf of Mexico and international assets during this year. 

The oil company on Tuesday announced its 2017 initial capital program of $4.5 to $4.7 billion. Out of this total amount, Anadarko expects to invest in 2017 approximately $1.1 billion in its deepwater Gulf of Mexico, Algeria and Ghana assets.

In the Gulf of Mexico, the company plans to continue leveraging its premier infrastructure position and drill approximately seven development tiebacks during the year. In addition, Anadarko expects to benefit from a full year of production from the recently acquired Freeport-McMoRan properties, which doubled Anadarko’s sales volumes to more than 160,000 BOE per day at the end of last year.

According to the company, minimal capital investments are expected to be required in 2017 to maintain the steady, long-lived, high-margin oil production provided by the company’s cash-generating assets in Algeria and offshore Ghana.

Also in 2017, the company expects to invest approximately $770 million in its deepwater and international exploration program and LNG project in Mozambique.

During the year, Anadarko plans to drill up to 10 exploration/appraisal wells in the deepwater Gulf of Mexico, Côte d’Ivoire, and Colombia, where Anadarko recently made a discovery at the Purple Angel prospect.

The company expects to continue advancing the Mozambique LNG project where it has made progress on the legal and contractual framework, and recently submitted a Development Plan to the Government of Mozambique for the Golfinho/Atum discoveries.

When it comes to its onshore assets, the oil company plans to invest approximately $820 million in Delaware Basin upstream activities, with an additional $560 million of Anadarko capital allocated toward the expansion of its midstream backbone to enable future growth, and approximately $840 million in DJ Basin upstream activities.

Al Walker, Anadarko Chairman, President and CEO, said: “Our 2017 initial capital program is designed to leverage our streamlined portfolio and sharpened focus on higher-margin oil production, which is expected to generate stronger returns and substantial cash flow to fund material growth over the next five years.”

“With a growing lower-risk resource base of more than 6.5 billion BOE (barrels of oil equivalent) in our premier U.S. focus areas of the Delaware and DJ basins, and the deepwater Gulf of Mexico, I believe Anadarko is poised to deliver exceptional value in 2017 and well beyond.

“In 2017, we plan to allocate approximately 80 percent of our total capital program toward our U.S. onshore upstream and midstream activities, and our expanded position in the deepwater Gulf of Mexico,” added Walker.

“These investments provide the foundation for our increased five-year oil growth expectations of more than 15 percent on a compounded annual basis at current prices, and we are prepared to be flexible throughout the year if we see the opportunity in the Delaware and DJ basins to accelerate activity to capture additional value. Furthermore, sustained oil production from our deepwater Gulf of Mexico, Algeria and Ghana assets is expected to generate significant free cash flow to support growth and fund future value creation through exploration success and our LNG business.”