Core operators in the flooded-out Wattenberg Field in Colorado may be more affected than expected, and the overall impact could be more severe than most Wall Street observers believe, said David Tameron, Wells Fargo Securities senior analyst, in a recent report.

As investors' concerns about the catastrophic storm fade, most operators are continuing to assess production impacts. Most management teams expect to have a more definitive update during third-quarter calls, Tameron said.

“Bottom line for us is we think the Street was quick to dismiss the flooding as a short-term event, and we don't think the Street is taking in that the oil and gas industry effect from this storm could be closer to two quarters,” Tameron said.

He added that operators in the core of the play, including Ana - darko Petroleum Corp., Noble Energy Inc., PDC Energy Inc. and Encana Corp., are likely to be more affected.

In early October, Anadarko provided an update of its operations in the Greater Wattenberg area, where it operates more than 5,800 wells, 2,500 storage tank facilities and 3,200 miles of pipeline.

The company is experiencing disruptions to its drilling, completions and construction activities. Damaged roads, bridges, rail and other problems have impeded the movement of rigs, compression units and other heavy equipment.

Anadarko anticipates temporary delays to its expansion of capacity in the field, reducing its total estimated full-year sales volumes by approximately 2.5 million barrels of oil equivalent (BOE). However, the company anticipates its total annual sales volumes to still be within the previously provided guidance of 281- to 287 million BOE. Before and during the flooding, the company shut in approximately 675 operated vertical wells. “The vast majority of Anadarko's locations remained intact and there were no environmental impacts associated with its drilling or hydraulic fracturing activities,” the company stated in a release.

“The Wattenberg horizontal program is one of our most important areas of operation,” said Al Walker, Anadarko's chairman, president and chief executive. “As conditions improve, we expect to safely accelerate activity in the field to enable its tremendous pro-

duction growth to continue. This includes plans to drill 350 to 400 new horizontal wells in 2014, as well as to complete infrastructure expansions throughout the field.”

Tameron said the third-quarter impact should not be too significant. The good news, he said, is that most of the shut-ins are legacy verticals.

“Lingering logistical effects likely will continue, however, and likely have a bigger impact on fourth quarter [2013] and first-quarter 2014 production, as development schedules slip given logistical delays,” he said.

Moving heavy equipment across rivers has been delayed as authorities work through bridge inspections. Rail-delivered supplies, mostly sand, have to be brought in via truck or other methods because of the railway damage.

—Darren Barbee