Venus - a crucial well

Here are some snippets from Anadarko's conference call on Wed (listen again here).  Bits in quotes are verbatim.  Rest is paraphrased. Any addition by me are [in square brackets]. Mostly happy stuff, nothing new here

"despite rumours to the contrary" we have a discovery

"significant impact on our West African exploration prgram"

700 miles from Jubilee - pre drill CoS les than 25%

could have a very meaningful impact for Anadarko [nb Andarako's market cap is $31b]

no details of results were given - well still being logged, no lab results yet received

the results confirm our geological model - all very positive: sand, petroleum migration, thermal maturity

"these aren't little shows" - shows in multiple sands.  refused to confirm if shows in Campanian (ie Teak / Odum) or Turonian (ie Jubilee)

stressed "at least" 45m of hydrocarbons. gross pay considerably larger - rich potential source rock - need to find where it has migrated to

"we went in with a lot of questions about the basin, we now have an excellent calibration point." will use this to reprocess seismic, look at areal extent to see if Venus by itself is commercial.   "fantastic result"

went 2000ft deeper than planed because TD was in a show - decision taken on the fly by the partners.

db

FT comment: http://www.ft.com/cms/s/0/3ded0dd2-a2ef-11de-ba74-00144feabdc0.html

Anadarko and Tullow have made a bet on the region, snapping up exploration rights at low prices when oil reserves were unknown. Those positions have now significantly gained in value. Many analysts and executives believe the Venus discovery will sharpen the interest of big oil companies, which can now be more certain that the basin holds enough oil to make it worth buying into projects or even considering a takeover.

Ben Dell, analyst at Sanford Bernstein, the financial services company, said the province appeared to have multiple billions of barrels of oil reserves, making it attractive to BP, Total and Royal Dutch Shell of Europe, and Chevron of the US.

“They will have to move before the Cote d’Ivoire well because if that is also a success then the valuation or premium will most likely become prohibitive,” he said

db

What did they give away in exchange?

Well the terms of the farm-in have not been published.  Anadarko made quite a lot on their conference call about it being good to share rigs in long drilling campaigns with the other operators in the area such as Tullow.

db

db:

Nice timing by Tullow, though.

What did they give away in exchange?

Not RNSd by Tullow. Nor by Anadarko.  IIRC I found it by a google alert from a mention to the press of the farm out by Anadarko. At the time of the farm out Venus had already spudded, so this was certainly a last minute decision.  Obviously Anadarko and Tullow geologists wok closely together on Jubilee and I would expect that it was this team that pressed the go button - but where they are located I have no idea.

Thanks. Was that RNS'd anywhere?

I'm interested about the timing - and wonder if it wasn't the Dublin team taking a fresh look at data that had already been looked at by the Cape Town folks [since I think it was that sort of situation that prompted the rethink of priorities at Ruvuma during the summer].

rgds

ee

They farmed into Venus in early August. 

db

Hi db,

Reponding to your point in the M&A thread (better here) -  I have a simple question:

So it's not a matter of 'every little helps' - Tullow at recent conference call described Venus and Mahogany as the 'bookends' of the whole play, and Venus coming in as a potential 'grand slam'. hence Tullow are massively more interested / excited about Venus than, say, the individually larger target at Ruvuma.

If it was so important (and I'm prepared to believe that it is, because that's what Tullow claim and everyone now seems to acknowledge) why did neither the Venus well, or even Sierre Leone as a whole, even rate a mention in the AGM presentation and only suddenly appear in the Interims presentation? When was it decided to target Venus and (the thought occurs to me) is there a comparison with the geological second-thoughts they've been having elsewhere?

Indeed when was the Sierra Leone asset acquired? It doesn't appear (AFAICS) in the last Annual Report - and I can find no RNS about it until today. It just appears to have "popped up" at the 2009 Interims stage at the end of August.

rgds

ee

Perhaps the rumours werent so off. The concern was that that the find woudl be small and not commercial.

A comment Ive seen since the announcement:

'they have found oil and not a commercial oil field'. This is what we have been saying. We don't yet know if this is Campanian or Turonian (probably Turonian?)

whats the term for a group of spedia users?

At a meeting, the first two to arrive are a pair of speedo's

Then everyone who arrives later is a speedo meeter

Seems I was wrong (well, the rumours were wrong):

 Oil discovery in the Venus-B1 exploration well offshore Sierra Leone

 

 16 September 2009 - Anadarko Petroleum Corporation, the operator of the

deepwater Venus-B1 exploration well in Sierra Leone, in which Tullow Oil plc

(Tullow) is a 10% partner, today issued the following press release.

 

 

HOUSTON, Sept. 16, 2009 - Anadarko Petroleum Corporation (NYSE: APC) today

announced a deepwater discovery at the Venus exploration well in block SL 6/07

offshore Sierra Leone. The Venus B-1 well was drilled to a total depth of

approximately 18,500 feet in about 5,900 feet of water and encountered more than

45 net feet of hydrocarbon pay. Venus is the first deepwater test in the Sierra

Leone-Liberian Basin.

 

 

"The Venus discovery confirms the existence of an active petroleum system in the

basin and enhances the prospectivity of our vast West Africa acreage position,"

said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. "With

Jubilee on the east and Venus on the west, we have established bookends spanning

approximately 1,100 kilometers (700 miles) across two of the most exciting and

highly prospective basins in the world. Anadarko and our partners are evaluating

the initial results of the well and the forward plan for the prospect, and

anticipate additional drilling in the area. We are optimistic that the continued

success of our West African Cretaceous program will create substantial value for

our stakeholders as well as the people of West Africa through continued

investment and increased activity. Anadarko plans to drill two to five wells in

the trend next year."

 

 

The Venus prospect is one of Anadarko's more than 30 identified prospects and

leads on its West Africa acreage position, which includes interests in almost 8

million acres across 10 blocks offshore Sierra Leone, Liberia, C te d'Ivoire and

Ghana. Anadarko operates seven of the blocks and the majority of the identified

prospects with an average working interest of approximately 40 percent.

 

 

The company plans to continue its West Africa drilling operations in the

Cretaceous Trend by drilling the South Grand Lahou exploration well in block CI

105 offshore Cote d'Ivoire once activities are completed at the Venus discovery

well.

 

Anadarko plan to host a conference call today at 7:30 a.m. CDT, 8:30 a.m. EDT

Anadarko will host a conference call today, Sept. 16, 2009 at 7:30 a.m. Central

Daylight Time (8:30 a.m. Eastern Daylight Time) to discuss the results of the

Venus well and its ongoing West Africa exploration program. The dial-in number

is 888.679.8040 in the United States or 617.213.4851 internationally. The

confirmation number is 90952793. For complete instructions on how to listen to

the conference call or live audio webcast, please visit www.anadarko.com. A

replay of the call will also be available on the Web site for approximately 30

days following the conference call.

 

 

whats the term for a group of spedia users?

Speedies?

db

As I mentioned over on the M&A thread, Ive been hearing the opposite rumours re Venus saying that the oil has migrated.... Will be interesting to see what comes of it.

Good to see you at OB yday. Most odd to have so few BB'ers there and S'pedias (hmmm, whats the term for a group of spedia users?) outnumbering the Fools.

A leak from Anadarko???

Tullow, the UK-listed oil company, and Anadarko, of the US, will reveal as early as today that they have established a new oil frontier that stretches 1,100km along the coast from Ghana to Sierra Leone.

The announcement will be made off the back of discoveries made by the Venus well Anadarko has been drilling off Sierra Leone, people close to the US company said.

http://www.ft.com/cms/s/0/914c5786-a258-11de-9caa-00144feabdc0.html

db

Slide 24 gives you a better idea of the extent of what will be de-risked if Venus does come in.

At the conf call they referred to Jubilee and Venus as the 'Book Ends' of the entire play. If Venus does not come in, they will just start moving West along the prospects until they do find the extent of the play.

Already well into the drill schedule with results expected in ~2weeks (same timescale given for conclusion on Ngassa)