BLBG:Cove, Anadarko Find Biggest Pocket of Gas Off Mozambique
Cove Energy Plc (COV), a U.K. explorer that’s put itself up for sale, found the deepest layer of natural gas so far in its discovery off Mozambique, increasing confidence about the size of the reservoir.
The company, along with partner Anadarko Petroleum Corp. (APC), encountered 237 meters (777 feet) of gas in the Lagosta discovery, Cove said in a statement in London. Shares rose 3.6 percent to 138 pence at the close in London, the most since the company began trading in 2005.
The results support the estimate that the basin may hold 15 trillion to 30 trillion cubic feet of gas, enough to justify production of liquefied natural gas to supply Asian markets. Cove, with an 8.5 percent stake in the Rovuma Area 1 where the discovery was made, opened a data room for bidders last month and has said it may also sell some assets in Mozambique.
“I am confident that after further evaluation of Lagosta 2, combined with new drilling and well-testing, we will see more resource upgrades as this exciting project drives on toward final investment decision in 2013,” said John Craven, chief executive officer of Cove.
A second drillship, the Deepwater Millennium, has arrived in the region to conduct flow tests, the company said. Anadarko, based in The Woodlands, Texas, has a 36.5 percent interest in the area.
The announcement, which “surprised slightly to the upside,” shows continued progress on the Mozambique program, said Bob Brackett, an analyst with Sanford C. Bernstein in New York who has a “market perform” rating on Anadarko shares and owns none.
“It’s the thickest they’ve found, which is nice, but ultimately it’s still a giant resource so this is just appraising that resource,” Brackett said in a telephone interview today.
Anadarko rose 1.5 percent to $79.20 at the close in New York. The shares have dropped 28 cents in the past year.
To contact the reporters on this story: Brian Swint in London at bswint@bloomberg.net; Edward Klump in Houston at eklump@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
