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Anadarko Shuts 3,000 Wells in Colorado After Explosions

Oil Rigs

Following a home blast near a vertical well operated by Anadarko (NYSE:APC) , the company said it will shut all its vertical wells in northwestern Colorado while it investigates the cause of the blast, which killed two people. The number of wells in the area that the company operates is more than 3,000, with a combined output of 13,000 net barrels of oil per day.

Anadarko has tasked local field personnel to check the production equipment at the wellheads and the underground lines that connected them. The local Frederick-Firestone Fire Protection District is meanwhile conducting its own investigation, and told Bloomberg that the proximity of the oil well to the home where the blast occurred is one aspect to be considered, adding that the cause for the explosion has yet to be identified. There is no threat to other homes in the vicinity, the authorities said.

Anadarko’s shares have dipped over 5% on Thursday to $56.98 as of 10:07AM EST.

Anadarko, which is reporting Q1 2017 financial results at the end of the month, last booked a net loss of $3.07 million for the fourth quarter of 2016, on revenues of $7.87 million. Now, some analysts are again expecting a loss: Seaport Global Securities expects the company to report a net loss of $0.41 per share, which is an improvement of the company’s earlier forecast for Anadarko, which saw it posting a net negative $0.44 per share for the first quarter of the year.

Related: Is Canada’s Oil Industry Regaining Momentum?

The company plans to boost onshore oil production by 13 percent this year from last, when it was 31 percent lower than the 2015 output. Over the medium term, Anadarko projects a minimum 600,000 bpd from its DJ Basin and Delaware Basin acreage, provided prices stay between $50 and $60 a barrel. In 2016, this output totaled 287,000 bpd, and this year’s production rate is set at 360,000 bpd.

In the Gulf of Mexico, where it recently acquired Freeport-McMoRan’s oil assets, Anadarko has oil equivalent production capacity of 160,000 bpd.

By Irina Slav for Oilprice.com

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  • Zaphod Beebleprox on April 27 2017 said:
    Anadarko booked a net loss of 516 million $ on Q4 2016
    Revenue for the period was 2.387 billion $.

    Please check your facts.
  • Dan on April 27 2017 said:
    Natural gas explosion? All natural gas Wells shut down?

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