By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) — Anadarko Petroleum Corp. on Monday doubled its reserve estimate for natural gas fields off the coast of East Africa and said it’s moving toward an investment decision on a proposed liquefied natural gas operation in the region.
Anadarko APC +0.38% said it could recover up to 30 trillion cubic feet from waters near Tanzania and the island nation of Madagascar — an area that the company hailed as possibly “one of the most important natural gas fields discovered in the last 10 years.”
Nearly 4 trillion cubic feet were in storage in the United States as of last week, according to the Energy Information Administration. The U.S. consumes about 2 trillion cubic feet of natural gas per month
Shares of Anadarko jumped 5.5% as energy stocks rallied amid a 291-point jump in the Dow Jones Industrial Average DJIA +2.59% . Read the latest news on stocks in the energy sector.
Anadarko said the latest in a series of exploration wells, the Barquentine-3, encountered more than 600 feet of natural gas pay and helped it lift its reserve estimate for the area.
In discussing its findings, the company also presented a conceptual design for an LNG processing facility envisioned for the region, with a preliminary design by KBR Inc. KBR +5.40% .
Analysts at Canaccord Genuity Energy Research reacted to the news by reiterated their buy rating and $103 price target for Anadarko.
The announcement amounts to a positive for the company since it suggests a bigger resource, even as analysts said exports from Mozambique won’t likely start until 2018, beyond its usual five-year horizon for profit estimates.
“This announcement has no impact in our model though reinforces our view that Anadarko’s deepwater exploration portfolio and execution is world-class,” Canaccord Genuity said.
The Barquentine discovery comes after Anadarko announced in 2010 two of the largest deepwater discoveries in the world at its Windjammer and Lagosta wells in Mozambique.
All told, Anadarko holds stakes in 13 million gross acres in Mozambique and Kenya in East Africa.
Anadarko is the operator of the fields in Mozambique, with an ownership stake of 36.5%.
The remainder is divided by ENH Hydrocarbonetos de Mozambique, Mitsui & Co. Ltd. JP:8031 +1.16% , Videocon, Bharat Petro Resources, and Cove Energy PLC.
Anadarko’s update on Mozambique comes less than a month after the company announced a find of up to 1.5 billion barrels of oil in the Wattenberg shale in northeast Colorado. See: Anadarko’s strike in the Rocky Mountains
