Germany's Wintershall signed on Tuesday a farm-in contract with the Argentine Patagonia province of Neuquén to explore Vaca Muerta’s shale gas and oil field. Under the terms of the joint-venture agreement Wintershall together with Gas & Petroleo de Neuquen will explore and develop the Aguada Federal block and are committed to invest 80 million Euros.
The block comprises 97 square kilometers of the prospective Vaca Muerta shale located in the Añelo department to the east of Neuquén province. Wintershall acquires a 50% participation interest from G&P in the Aguada Federal block and assumes operatorship.
During the exploration phase and in case of a further development, GyP will retain ownership of the exploration permit and eventual exploitation concession, while Wintershall will have a 50% participation in the joint venture agreement and will be the operator of the area.
GyP has been performing exploration activities in this area since 2012, including the drilling of one well. In the next two years Wintershall and GyP will evaluate the potential of the Vaca Muerta formation in a first exploration phase – including drilling of up to six wells with an investment of about €80 million. Following a successful exploration phase, GyP and Wintershall will continue with further development of the resource.
“This commitment and the partnership with GyP underline once more that Wintershall Energía S.A. is determined to continue investing in Argentina on a long-term basis to develop the country’s hydrocarbon resources”, said Martin Bachmann, Member of the Board of Executive Directors of Wintershall Holding GmbH and responsible for Exploration & Production.
He added that ”it also represents an excellent opportunity to deploy our technical experience in unconventional reservoirs in the promising and fast growing Vaca Muerta shale projects in the Neuquén Basin, one of the most prospective shale oil and gas regions in the world.”
Wintershall has been in Argentina since 1978 with natural gas production the main area of its activities and has working interests in 15 oil and gas fields with an annual production of 26 million barrels of oil equivalent (boe).
The greatest share of production comes from offshore fields off the coast of Tierra del Fuego where Wintershall is participating in the development of the Total Austral operated new gas field Vega Pleyade, which is set to begin production in 2016.
Wintershall is also well placed for future growth in the region with the world’s third-largest reserves of unconventional resources. The company holds a significant acreage position in the promising Vaca Muerta shale oil and shale gas play where it just started exploration work. At the beginning of 2012, Wintershall Energía was awarded two exploration permits as operator for the blocks CN-V and Ranquil Norte in Mendoza province, where first exploration activities with 3-D-seismic were done in spring 2013.