HOUSTON—Five of the 15 wells beneath the world’s deepest ocean production platform are producing natural gas, and the remainder should be online by year’s end, the chairman of Anadarko Petroleum said Wednesday.
In a presentation at a Lehman Brothers’ energy conference in New York, Jim Hackett said the five wells are producing about 250 million cubic feet of natural gas a day. The goal is 1 billion cubic feet a day by the end of the year—roughly 2 percent of all U.S. natural gas production.
The platform, known as Independence Hub, rests 8,000 feet above the ocean floor in the U.S. Gulf of Mexico, about 120 miles southeast of Biloxi, Miss. It began producing in July.
“To think that you could bring on a $2 billion project on budget and on time during the cycle we’ve been through in the industry is absolutely unheard of,” Hackett said in a presentation broadcast over the Internet.
Enterprise Products Partners LP is an 80 percent owner of the platform, while Helix Energy Solutions Group Inc. owns the other 20 percent. Both companies are based in Houston.
Anadarko, an independent oil and gas producer based in The Woodlands, Texas, has reserved 61 percent of Hub’s capacity. The remainder is controlled by Italy’s Eni SpA (20 percent), Norway’s Norsk Hydro ASA (12.5 percent) and Devon Energy Corp. (6.5 percent), whose corporate headquarters are based in Oklahoma City.
Natural gas futures rose 2.6 cents to $5.655 per 1,000 cubic feet in midday trading on the New York Mercantile Exchange on Wednesday. Natural gas prices have fallen this year and are below year-ago levels as inventories have risen to record highs. The lower prices are prompting some companies to slow or shut-in production.
Anadarko bought Kerr-McGee Corp. and Denver-based Western Gas Resources Inc. a year ago for more than $22 billion, and it’s spent much of the past year reshaping its portfolio—now geared toward natural gas—by selling assets in the United States to reduce debt.
Hackett said the company is on target to meet a goal of reducing total debt to $12 billion by year’s end without issuing equity.
In July, Anadarko said second-quarter earnings fell 20 percent to $652 million, in part because of hefty interest payments on debt from last year’s acquisitions. But revenue nearly doubled from a year ago and the results easily beat Wall Street forecasts.
Anadarko shares rose 21 cents to $50.24 Wednesday. They’ve traded in a 52-week range of $38.40 to $55.82.
