MercoPress. South Atlantic News Agency

Argentine province extends oil and gas concessions to US company

United States Apache Corporation announced this week that the Argentine Patagonian province of Neuquen has agreed to extend eight federal oil and gas concessions for 10 additional years.

Since acquiring the blocks in 2006, Apache has increased gas production 255 to 106 million cubic feet per day and increased oil production 9% to 5.500 barrels per day.

The concessions, which were scheduled to expire between 2015 and 2017, encompass approximately 2.384 square kilometres, including exploratory areas totalling 2.082 square kilometres.

In exchange for production that would have reverted to the province beginning in six years and the right to explore for 10 additional years, Apache will pay a bonus of approximately 23 million USD, increase the provincial royalty to 15%from 12% and spend up to 320 million USD in a future work program.

“The extension of our Neuquen concessions can be compared to an acquisition in which Apache has a good understanding of the value” said Rob Johnston, region vice president. “The agreement benefits Apache by extending our reserve life and providing more time to develop the assets, and benefits the province of Neuquen by providing an immediate cash payment as well as the assurance of continued investment and employment for Neuquen residents for many years to come”.

Neuquen province provides about half of Apache's total output in Argentina.

“We appreciate the well-planned and open way in which the province conducted the negotiations” said Johnston. “Next, we plan to pursue similar extensions for concessions on the island of Tierra del Fuego”.

Apache Corporation is an oil and gas exploration and production company with operations in the United States, Canada, Egypt, the United Kingdom North Sea, Australia and Argentina.