(Adds details from conference call, context)
By Liz Hampton
HOUSTON, Aug 1 (Reuters) - Anadarko Petroleum Corp on Wednesday said it had established a core acreage position in Wyoming’s Powder River Basin and had begun an appraisal effort for the development of oil production there.
The company on Wednesday said it had acquired some 300,000 acres in the Powder River Basin at an average cost of less than $2,500 per acre. It said it was working on adding new leases to square up its acreage.
The move would expand Anadarko’s footprint, which has narrowed in recent years after the company sold assets in the Eagle Ford shale of south Texas and Pennsylvania’s Marcellus shale. The company currently operates in the Delaware Basin of Texas, Colorado’s DJ basin and the U.S. Gulf of Mexico.
“We believe we have another onshore oil opportunity in its southern portion,” Chief Executive Officer Al Walker told analysts, referring to the Powder River, during the company’s quarterly earnings call.
“As an emerging area of interest for our industry, this part of the Powder has been receiving increased viability,” he added.
Anadarko said it would focus its efforts around Turner formation and expects wells drilled in that play to have rates exceeding 2,000 barrels of oil equivalent per day, with more than an 80 percent oil cut.
The company said it would provide details related to its Powder River development later this year when it discusses 2019 capital plans.
Anadarko’s shares were down 6 percent shortly after the market opened, at roughly $68.82. Oil prices were down again on Wednesday after their biggest monthly slump in two years in July, pushing energy stocks broadly lower.
The stock dip also followed a $250 million increase to Anadarko’s anticipated capital expenditures for the year. Analysts for investment firm Tudor Pickering Holt & Co on Wednesday said capital expenditures of $1.5 billion for the second quarter were “running hot.” (Reporting by Liz Hampton; Editing by David Gregorio)