Independent oil and gas company Anadarko Petroleum Corp. estimates its total 2010 capital expenditures to reach between $5.3 and $5.6 billion. 

Jim Hackett, Anadarko chairman and CEO said the company’s strong 2009 results– including record production, nine deepwater discoveries and cost reductions–and strong balance sheet at year-end, support “higher expectations for 2010 and future years.”

"Building upon our base with the expected growth from our natural gas shale plays and oil-focused mega projects, we project that we can surpass 3 billion boe (barrels of oil equivalent) of proved reserves by year-end 2014, with an increased production CAGR (compounded annual growth rate) of 7% to 9% over the five-year period. We also remain focused on transitioning our world-class deepwater discoveries into the next generation of mega projects, with a target of six new mega projects on line by 2016."

Near-term projects
In 2009, Anadarko allocated roughly $1.8 billion to its base and increased sales volumes by about 7% relative to 2008. This year, the company has allocated nearly $2 billion to these near-term projects and expects to increase sales volumes in 2010 by up to 5% over the 2009 total of 220 million boe.

Mega projects
Anadarko has allocated 22% of the 2010 capital budget to the ongoing development of its oil-weighted and sanctioned mega projects. The Jubilee Phase I development, offshore Ghana, is on track for first production in late-2010. Construction of the 120,000-barrel-per-day FPSO (floating production, storage and offloading) vessel is roughly 90% complete. The FPSO is scheduled to arrive in Ghana in the second quarter of this year. All 17 of the Jubilee Phase I development wells have been drilled, and the installation of the subsea infrastructure is under way.

At the Caesar/Tonga complex in the deepwater Gulf of Mexico, the partnership has drilled three of the four development wells, and conversion work on the topsides at the Constitution spar is nearly complete. The project is expected to deliver first production during the second quarter of 2011.

Work also continues to progress at the El Merk development in Algeria. The project is approximately 28% complete, and 62 of the 140 wells have been drilled. First production is anticipated in late-2011. By 2012, the company expects these three sanctioned mega projects to deliver approximately 60,000 barrels of oil per day, net to Anadarko.

Shales
Anadarko currently holds approximately 600,000 net acres in core positions in the Marcellus, Haynesville, Eagleford and Pearsall shale plays onshore in the US, with an estimated 50 trillion cubic feet of natural gas equivalent (tcfe) of gross unrisked resources.

For 2010, the company expects to allocate nearly 10% of its capital budget to these areas that have the potential to increase their production over a five-year period at a 60% CAGR.

Exploration
Roughly 20% of the 2010 capital program is allocated to exploration, with much of it focused on the company's worldwide deepwater exploration program that includes plans to drill approximately 30 high-impact exploration/appraisal wells. Up to 13 exploration/appraisal wells are expected to be drilled offshore West Africa, 7 to 10 wells in the Gulf of Mexico, 4 to 6 wells in Brazil, 4 to 6 wells in Mozambique and 3 to 5 wells in southeast Asia.

"Given that at least 75% of the $1.1 billion allocated to exploration is directed to the drill bit, we expect to be one of the most active deepwater drillers in the world this year, testing up to 7 billion boe of gross unrisked resources," said Hackett. "We are targeting approximately 400 million boe of net discovered resources in 2010, a 12% increase over our record 2009 results.

2010 Guidance
Anadarko's total sales volumes for 2010 are projected to be in the range of 226 million to 231 million boe. For the first quarter of 2010, the company expects sales volumes to be in the range of 56 million to 59 million boe.