Independent oil and gas producer Anadarko Petroleum Corporation ( APC - Analyst Report ) made another discovery off the coast of Mozambique. This new find to a large extent substantiated the company’s projection that the Offshore Area 1 of Mozambique's Rovuma Basin at the Lagosta prospect has 15 -30 trillion cubic feet (Tcf) of recoverable natural gas.

The exploration well Lagosta-2, drilled at a total depth of approximately 14,223 feet (4,335 meters), encountered about 4,813 feet (1,467 meters) of water. Anadarko has already mobilized another drillship in the area to spur exploration activity.

Anadarko has been operating in Mozambique with drilling success in Lagosta and Camarão. The new find is located 4.4 miles (7 kilometers) north of the Lagosta discovery and 5.3 miles (8.5 kilometers) south of the Camarão well.

The drilling well has encountered 777 total net feet (237 meters) of natural gas pay in multiple zones. Encouraged by the drilling success Anadarko has plans to drill the Lagosta-3 appraisal well in the area.

Anadarko is working jointly with five other players in the Offshore Area 1 of Mozambique and has a 36.5% working interest. Other players have working interest in the field ranging from 8.5% (Cove Energy Mozambique Rovuma Offshore Ltd.) to 20% (Mitsui E&P Mozambique Area 1, Limited).

The demand for natural gas has increased globally for its clean burning nature and oil and gas companies are working worldwide to capitalize on the ever-increasing demand. Africa has an abundance of unexplored oil and gas reserves and leading oil and gas companies like TOTAL S.A. ( TOT - Analyst Report ) and BP Plc. ( BP - Analyst Report ) are teaming up with local partners to make the most of it.

Anadarko has been working consistently to diversify its asset portfolio. In December 2011, the company teamed up with other major oil and gas companies like Plains Exploration & Production Company ( PXP - Analyst Report ) , Exxon Mobil Corporation ( XOM - Analyst Report ) ,) Apache Corporation ( APA - Analyst Report ) , Eni S.p.A ( E - Analyst Report ) and Petroleo Brasileiro ( PBR - Analyst Report ) to begin drilling operations in the Lucius project, located in the Keathley Canyon area of the deepwater Gulf of Mexico.

We believe the drilling success in Africa, the removal of financial overhang after it reached a settlement with BP for all claims associated with the Deepwater Horizon accident and fresh project startup in the Gulf of Mexico have brightened up the future prospects of the company. However, fluctuating prices and risks associated with drilling keep us on the sidelines. Hence, we have a long-term Neutral recommendation on the stock, which coincides with the Zacks # 3 Rank, translating into a short-term Hold rating, retained by the stock.

Based in Texas, Anadarko Petroleum is an independent oil and gas company engaged in the acquisition, exploration, and production of oil and gas primarily in the deepwater Gulf of Mexico in the US and in Algeria.