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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Salt'n'Peppa who wrote (164055)	2/17/2012 9:33:45 AM
From: Dennis Roth	2 Recommendations Read Replies (1) \| Respond to of 206338

Anadarko Petroleum Corp (APC) Alert: Deepwater Gulf of Mexico Back To Full Gear With Heidelberg Appraisal Success 17 February 2012 ¦ 10 pages citigroupgeo.com Heidelberg Appraisal – Anadarko announced successful results of the Heidelberg-2 appraisal well (APC 44.25%, APA 12.5%, CIE 9.4%), in the deepwater Gulf of Mexico, which encountered ~250 net feet of oil pay in high quality reservoir. The appraisal well was drilled about 1.5 miles south of the Heidelberg discovery well which in 2009 found 200 net feet of oil pay. Anadarko estimates the reserves potential of this discovery at 200+ MMBOE (net to APC ~4% of its year-end 2011 proved reserves, APA 1%, while CIE has not yet booked any proven reserves). However, we believe the reserve potential is at least 300 MMBOE, or perhaps greater, which we value at more than ~$12/BOE, or ~$1.6 billion net to APC (~$3/share), $450 million net to APA (~$1/share) and $340 million net to CIE (~$1/share). Moving Quickly Toward Development – Anadarko plans to immediately sidetrack the well to evaluate the down-dip extent of the structure, and plans to initiate pre-FEED to prepare for sanction of the field which could be by year end. First production from a stand-alone development could then be achieved as early as 2015 with gross production capacity at over 50 MBOE/d... ...Cobalt and Apache Also Benefit – Apache owns 12.5 % working interest in the field which could ultimately contribute ~1% to APA’s year-end proven reserves. Cobalt has a ~9.4% WI in Heidelberg and we currently assign ~$300 million or $0.75/share in our risked NAV calculation for Heidelberg although this should increase with a higher risk factor due to the appraisal success. Furthermore, today’s success further de-risks adjacent Ligurian prospect which currently carries $1.75/share value in our CIE NAV and is currently drilling and expected to reach TD by the end of second quarter.