YPF announces three wells confirm discovery of new shale deposits
Argentina’s recently nationalized oil and gas corporation YPF announced non conventional oil was discovered in five new wells drilled in the Patagonian provinces of Chubut and Neuquen and anticipated that fuel prices in the country will continue to gradually increase to eliminate the gap with competition.
The Thursday announcement was done by the company’s CEO Miguel Galuccio during the presentation of the “The 100 days plan for YPF” report and anticipated the company would manage to contain the production decline by the end of the year and in 2013 take off and return to growth.
Galuccio revealed that three of the wells were located outside the Vaca Muerta shale basin, which means a new source rock belonging to the San Jorge Gulf area in Chubut, an oil province with over a hundred years.
“We have for the first time perforated a new 'source rock' in Argentina” CEO Galuccio said.
“The discovery allows us to expand the non conventional exploratory horizon beyond Vaca Muerta and ratifies the power of Argentina in the issue and the pivotal role to be played by YPF in the exploration process”.
The other two wells belong to the Vaca Muerta gas shale deposit.
Argentina sits on huge resources of shale natural gas and oil which are considered the largest behind US, China and Canada.
Galuccio also announced that YPF is planning to invest 37.2 billion dollars in the next five years to boost oil and gas production by 32% at the end of 2017, reversing years of declination.
“We've got 80% of the investment program covered with operating cash flow, not earnings, and the remaining 20% coming from debt” said the former executive at global oilfield services company Schlumberger Ltd.
YPF net cash flow was 12.8 billion Pesos (2.8 billion dollars) last year, while net profit came to 5.3 billion pesos.
“A lot has been said about the company's financial stability, and I want to send a message to markets here in Argentina and abroad: the company's financial stability is guaranteed,” he said.
“We signed a memorandum of understanding yesterday with a local partner that is willing to invest 500 million dollars in an YPF project ... We're in advanced conversations with Chevron.”
Crude production fell 5.9% and natural gas output slipped 3.4% last year as power demand rose 5.1%, according to data from the Argentine Institute of Petroleum and Gas.
YPF proven reserves of crude and natural gas, which do not include the new shale finds, declined 15% and 31%, respectively, between 2007 and 2010, one of the main reasons appealed by President Cristina Fernandez to nationalize 51% of YPF stake from Spain’s Repsol.
Galuccio, who will spend much of September presenting YPF growth strategy to major American energy companies, said secrecy regulations bar him from providing estimates of how much crude oil and natural gas might be in the new find.
But admitted the discovery could represent another great opportunity for profits from 50-50 partnerships with YPF in the years ahead. Overall, he said, foreign oil companies partnering with YPF can expect a 15% to 20% return on their investments.
Of the 37.2bn dollars YPF hopes to invest through the end of 2017, all but 4.6 billion will come from its own resources and bond issues. Of this, 73% will be devoted to production, 22% to improving refinery capacity and 4% to new exploration, according to the five-year strategic plan Galuccio laid out to financial journalists.
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“secrecy regulations bar him from providing estimates of how much crude oil and natural gas might be in the new find.”, thats convenient!
maybe, just maybe he has just bought himself and CFK a tempoary reprieve at chevrons expense.
desperation is a disease and have Argentina has got it bad, on all fronts!
The article is very unclear which makes me wonder if the whole plan is just wishful thinking. Who is going to buy the bonds??
NB Don't they still owe Repsol for stealing the shares in the first place?
I utterly empathize with Argentine kirchernists, rest assured there is no sorrier people on the face of the planet, remember its constructive empathy and nothing more, try not to look into things that are not there, because that would make you a sorry paranoid deluded kirchenist and thats enough for anybody to “dis-like”
Does this mean they are just going to default on what they owe to raise the money?
That market cap was taking it's toll. Gross sales may have been expeanding between 28%, COGS sold skyrocketed to 41%. Gee I wonder why revenue streams had not keep pace with COGS.....can you answer that BK? When there is no longer a retained earning BK, what happens to the future continuation to operate under the “going concern principle”.
www.foxbusiness.com/news/2012/08/31/ypf-ceo-unveils-five-year-growth-plan-in-argentina/
No self-respecting oil company would entertain such palty returns, especially involving fracking.
Galuccio is learning how to bluff and bluster from his new mistress TMBOA but nobody will be taken in.
More Argentine success?
When was the last Argentine success?
Aug 31st, 2012 - 12:40 pm
The little boy next door comes around often to play with my own young children. One day I overheard a conversation. My 8yo daughter was telling him about a recent family trip we made to Shanghai.
It transpired that young Angus went to Shanghai all the time but he didn't have any pictures to show.
I am a photographer and on another occasion I was getting my kit together for a job one day and young Angus happened by and noticed one of my cameras. It turns out he had one of these £3000 shooters but he never took it out of its box for fear of breaking it. You could hammer nails in with one of these things but I suppose some people can be a bit precious, even 8 year olds.
Apparently he also has a Triumph 1050 Speed Triple, just like mine but keeps it at his grandparents house and has over 100,000 cousins although understandably he couldn't remember all of their names or where any of them lived.
Anyway, when I read this story it reminded me of young Angus. Kids will be kids.
They have not got access to escrow, so they are offering the Old Crow instead.
Ughh, wish I hadn't thought of that! LOL :o)
Galuccio is a desperate man; he has involved himself in a nightmare of epic proportions and is completely out of his depth.
He thought HE was in control, TMBOA told him HE was in control, but as usual, she lied.
She promised him money to carry out what was needed to make YPF produce the oil that Argentina is in desperate need of, but he soon learnt that he had to get the money himself. Hence this article.
So from Galuccio's perspective he is not talking bollocks. It's just that tp the rest of it, he is.
OK now?
seattletimes.com/html/nationworld/2019064782_apltargentinarussiagas.html
Have you actually read this article?
“Analysts have predicted that YPF can only meet its goals with outside help, but the five-year plan Galuccio unveiled last week would have YPF pay for most of the development by reinvesting its own revenues.
His message: Foreign partners are more than welcome in Argentina, but YPF will go it alone if it must.”
There you have it. Russia will SELL LNG to the Argies (hope they get their money up front) but that's it apart from talking.
I suspect you are an Argie who MAY be living in the USA but like Prat-Junta who says he lives in Canada, you can't stomach the fact that Argentina is the butt of the jokes world-wide.
Yes I did. Did you?
“It was a positive meeting and another open door to move forward with the ambitious goals we have set for ourselves,” said Galuccio, who brought to the meeting Juan Garoby and Pablo Vera Pinto, his top executives for non-conventional resources and international finance. “Gazprom is the most important gas company in the world and we've found points in common to rapidly explore a shared collaboration.'”
“said the accord could lead to partnerships with the Russians in drilling for shale oil and gas in the South American country, as well as more supplies of Russian liquefied natural gas for Argentina's energy-hungry economy.”
Could....is not Will. All these talks of no deals!
Ah! I understand your problem now: you ARE an Argie and English is an alien language.
That is why you think a deal has been signed! NO, it hasn't and most probably will not.
The ONLY thing the Ruskies have said is they will SELL Argentina LNG.
That's it!
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