The drilling moratorium imposed last year in the Gulf of Mexico after the infamous BP (NYSE: BP) oil spill has been lifted and natural gas companies are back in action in the area. The first well drilled by independent oil and natural gas producer Anadarko (NYSE: APC) in December has borne fruit.
The discovery
Anadarko started drilling in its fully owned Cheyenne East well after receiving the first drilling permit in the Gulf, and the acreage has shown great results; even exceeding company expectations. Anadarko is pretty upbeat about the find and expects to start production in the first half of 2012.
The prospect
The temporary suspension of deepwater exploration after the oil spill made oil and natural gas companies shift drilling rigs elsewhere in search of reserves. The find by Anadarko is expected to bring these companies back to the Gulf. According to Superior Energy Services CEO David Dunlap, drilling activity in the Gulf is expected to return to about two-thirds of what it was prior to the spill.
Anadarko has been betting big on discoveries of late. In Africa, the company has more than doubled its initial expectations after the huge discovery offshore Mozambique, which is Anadarko's biggest gas find ever. The east African coast has become an important destination for global players with Eni's (NYSE: E) discovery of more than 15 trillion feet of gas in the region. Anadarko is planning to build an LNG terminal in the area to supply gas to lucrative markets like Asia.
The natural gas industry is on the verge of adding a new chapter in the U.S., too, with companies like Cheniere (NYSE: LNG) building export terminals. This will expand the reach of U.S. natural gas companies and build capability to serve the distant Asian and European markets.
The Foolish bottom line
After the big find in Mozambique and a proposed LNG terminal, another natural gas discovery is only going to strengthen Anadarko's presence in the LNG market. With demand for LNG expected to be high, especially in Asia, and the option of exporting LNG out of the U.S., the firm is well on its way to boosting its top line.
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