Anadarko Petroleum Corp. (APC) climbed the most in eight months after announcing a U.S. Gulf of Mexico oil discovery that may produce more than half a billion barrels of crude.
Anadarko rose 3.7 percent to $86.40 at the close in New York, the biggest increase since July 3. Andarko’s partners in the Shenandoah-2 deep-water well also gained, with Cobalt International Energy Inc. (CIE) climbing 8.1 percent, ConocoPhillips up 1.9 percent and Marathon Oil Corp. (MRO) up 1.9 percent.
The well, drilled to almost 6 miles (9.6 kilometers) beneath the seafloor in water 5,800 feet deep, encountered oil deposits more than 1,000 feet thick, The Woodlands, Texas-based Anadarko said in a statement yesterday.
“The size of the discovery could be one of the largest in the Gulf of Mexico,” Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets LLC, wrote yesterday in a note to clients.
The field may produce 700 million barrels of oil, more than twice a previous estimate, said John Malone, a New York-based analyst for Global Hunter Securities LLC. Robert Morris, a New York-based analyst for Citigroup Inc., put the range at 500 million barrels to 1 billion.
The discovery adds $3 a share to Anadarko’s value, Brian Lively, an analyst for Tudor, Pickering, Holt & Co., wrote today in a note to clients. Lively, who rates Anadarko a buy, estimated about 750 million barrels may be recoverable from the deposit.
Anadarko operates the well and owns 30 percent. ConocoPhillips (COP) also owns 30 percent and Cobalt owns 20 percent. Marathon and closely held Venari Resources LLC each own 10 percent.
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