Anadarko makes new discovery offshore Ghana at Teak-2 prospect

Anadarko Petroleum Corporation announced a deepwater discovery at the Teak-2 prospect, located in the West Cape Three Points Block offshore Ghana. The Teak-2 exploration well encountered approximately 90 net feet of high-quality oil, condensate and natural gas pay in stacked Campanian- and Turonian-age reservoirs.

"The Teak-2 discovery is another confirmation of our geologic model that adds to the substantial resource potential of the area and extends the success of our multi-well exploration program on the West Cape Three Points Block," said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. "We are very pleased with the results encountered in this discovery, which will be further evaluated with future appraisal activity. We continue to work with our partners and the Republic of Ghana to advance our exploration and appraisal programs, as well as the increasing number of development opportunities in both the West Cape Three Points Block and adjacent Deepwater Tano License."

The Teak-2 well was drilled to a total depth of 11,185 feet in water depths of approximately 2,900 feet. The well is approximately 5,900 feet southwest and fault separated from Teak-1, and approximately two miles northeast of the Mahogany-2 well. After preserving the well at Teak-2 for future use, the partnership plans to mobilize the rig to drill the Banda prospect, also located in the West Cape Three Points Block.

Anadarko owns a 30.875-percent working interest in the West Cape Three Points Block, which is operated by Kosmos Energy (30.875-percent working interest). Other co-owners in the block include Tullow Oil plc (22.896-percent working interest), the E.O. Group (3.5-percent working interest), Sabre Oil & Gas Holdings Ltd (1.854-percent working interest) and the Ghana National Petroleum Corporation (10-percent carried interest).

West Africa Exploration Update
Anadarko has finalized plans for its previously announced 2011 drilling campaign in the Liberian Basin. To carry out this program, Anadarko intends to mobilize the Discoverer Spirit drillship from the Gulf of Mexico to West Africa after it finishes completion activities on the third Caesar/Tonga well. Subject to the finalization of a contract amendment with the rig owner, the Discoverer Spirit is expected to begin drilling in West Africa during the third quarter.

As part of this program, Anadarko plans to drill its first Mercury appraisal well, located approximately seven miles west of the Mercury discovery well offshore Sierra Leone in Block SL-07B-10. In addition, the company plans to drill the Jupiter exploration prospect on the same block later in the year. Anadarko operates Block SL-07B-10 with a 65-percent working interest.

Offshore Liberia, the company plans to drill the Montserrado exploration well on Block 15, which is operated by Anadarko with a 57.5-percent working interest. Further to the east, on Block 10, Anadarko recently completed the acquisition of a 2,400-square-kilometer 3D seismic survey. Processing of the survey is expected to take approximately six to nine months, and with the acquisition of this data, Anadarko will have 3D seismic information covering virtually all of its acreage in the Liberian Basin.

"Mobilizing the Discoverer Spirit to West Africa ensures our ability to deliver upon our exploration and appraisal programs in a timely fashion in an area that offers tremendous potential with more than 30 identified Jubilee-like prospects on our acreage," said Al Walker, Anadarko President and Chief Operating Officer. "We plan to keep the ENSCO 8500 rig in the Gulf of Mexico to conduct an extended well test at Lucius and, once we receive drilling permits, we are confident that we will be able to utilize the ENSCO 8500 and contract a deepwater rig of opportunity to resume our development and exploration programs in the Gulf."

Contango completes drilling deepwater GOM well

Contango has drilled a successful exploratory well at its Swimmy prospect located Offshore Gulf of Mexico on Vermilion block 170. The Company's independent third party engineer estimates this well to have 8/8ths proved reserves of 48 billion cubic feet of natural gas and 1.2 million barrels of condensate, approximately 55 billion cubic feet equivalent (Bcfe), or 37.5 Bcfe net to Contango's 68% net revenue interest.

Production is expected to begin this fall at an estimated rate of 15 million cubic feet equivalent per day (WMmcfed), net to Contango. Estimated net costs to Contango, to acquire, drill, complete, and bring this well to full production status are approximately $26.5 million.

Kenneth R. Peak, Contango's Chairman and Chief Executive Officer, said, "We expect this discovery will replace our production for the fiscal year ended June 30, 2011. Production for the six months ended December 31, 2010 was approximately 18.7 Bcfe. As a result of this well, our all-in estimated offshore Gulf of Mexico finding and development (F&D) costs for fiscal year 2011 are now estimated to be about $1.20/mcfe. The costs used in this calculation include $8.7 million for a potential second well at Vermilion 170; $9.5 million from our earlier dry hole at Galveston Area 277 (His Dudeness); and the $26.5 million outlined above, all net to Contango."

Mr. Peak continued, "Currently, our two Eloise wells are both shut-in for remedial work. Prior to being shut-in, they were producing at a combined rate of 5.0 Mmcfed, net to Contango. Our plan is to recomplete our Eloise South well uphole in the CibOp section as our Dutch #5 well. This recompletion is estimated to cost approximately $6 million, with an estimated initial production rate of approximately 8.5 Mmcfed, both net to Contango. Our Eloise North well recently sanded up and we are currently attempting to repair the well to restore production. If we are unsuccessful, our plan is to recomplete the well uphole in an upper Rob-L section at a net cost of approximately $0.5 million and an estimated initial production rate of approximately 1.5 Mmcfed, both net to Contango. We plan to have both of these wells on-line by mid-summer."

"We submitted our permit to the BOEM to drill our Vermilion 170 well on September 29, 2010, received permission to spud the well on February 16, 2011 and began drilling on February 24, 2011. We estimate this one well will help sustain dozens of jobs and pay royalties to the federal government in excess of $50 million. On March 3, 2011, we submitted an exploration permit to drill our Eagle prospect at Ship Shoal 134. We are hopeful that we will receive a permit to drill this prospect sometime this summer, but due to hurricane season, we may not spud the well until the October/November 2011 time frame."