Anadarko Petroleum Corp. dropped the most since August after the oil and natural gas explorer said it will shut more than 3,000 Colorado wells as part of an investigation into a deadly house explosion.
Shares slipped as much as 5.6 percent to $56.59 in New York trading, their biggest intraday slide since Aug. 1, and were down 4.8 percent to $57.07 as of 10:15 a.m. in New York. Anadarko will close and inspect the wells as a precaution after the April 17 blast, The Woodlands, Texas-based driller said in a statement Wednesday. Colorado authorities said they have yet to determine a cause for the tragedy.
The explosion just north of Denver in Firestone, Colorado, killed two people. While the closed wells represent a small fraction of Anadarko’s total production, “investors may be concerned by potential regulatory blowback against the industry,” analysts at Houston investment bank Tudor Pickering Holt & Co. said in a note to clients Thursday.
The closed wells, which produce the equivalent of about 13,000 net barrels of oil a day, will remain idle until the company can conduct inspections and test equipment and underground lines associated with each wellhead, according to the statement.
“While the well in the vicinity is one aspect of the investigation, this is a complex investigation and the origin and cause of the fire have not been determined,” the Frederick-Firestone Fire Protection District said in a separate statement. “Officials have determined there is no threat to surrounding homes and have been in contact with nearby residents.”
The blast occurred at a home 200 feet from where Anadarko operates a vertical well that was drilled by a previous explorer in 1993, the company said.
“Our teams will remain actively engaged with residents in the Firestone community,” Brad Holly, Anadarko’s senior vice president for U.S. onshore exploration and production, said in the company’s statement. “Colorado residents must feel safe in their own homes, and I want to be clear that we are committed to understanding all that we can about this tragedy as we work with each investigating agency until causes can be determined.”
Anadarko, which has drilling operations from Texas to the Gulf of Mexico and Africa, said in March that it expects to produce as much as the equivalent of 655,000 barrels a day in 2017.