MercoPress. South Atlantic News Agency

Colombia's GeoPark announces investment in Vaca Muerta

The company has been granted a 35-year concession

Colombian oil company GeoPark announced this week its plans to make a significant investment and operational agreement for the Vaca Muerta unconventional hydrocarbon reserve in Argentine Patagonia.

GeoPark will invest US$14.5 million in a three-year pilot project in the Puesto Silva Oeste area of Neuquén province, where Governor Rolando Figueroa authorized the transfer of the 100% hydrocarbon exploitation and a natural gas transportation franchise for Puesto Silva Oeste from the Argentine company Pluspetrol to GeoPark on a 35-year concession.

“The unconventional exploitation concession granted will include a pilot plan targeting the Vaca Muerta formation with a planned investment of US$14.5 million and a three-year term,” the Neuquén government said in a statement.

The investor's plan includes drilling one horizontal well with a 2,500-meter branch and 42 fracturing stages, plus a commitment to drill up to two additional wells if the first well shows an adequate production profile after an eight-month evaluation. Additionally, the company intends to build a Production Facility (CPF) with the capacity to process 20,000 barrels per day.

Moreover, GeoPark will pay Neuquén US$4 million as an infrastructure bond and US$362,500 for corporate social responsibility, and assess the potential safe abandonment of existing inactive wells in the area.

Neuquén's oil company Gas y Petróleo del Neuquén (GyP) will receive a 5% share of the economic rights/revenue generated by the Puesto Silva Oeste block throughout the concession.

Vaca Muerta is the world's second-largest reserve of unconventional gas and fourth-largest of unconventional oil. GeoPark's entry comes after signing an agreement last September to acquire Pluspetrol's stake in both the Puesto Silva Oeste and the Loma Jarillosa Este blocks.