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'Dead Cow' No More

posted Dec 14, 2011, 11:31 PM by Jeff Davies   [ updated Dec 15, 2011, 12:33 PM ]
Get ready to hear more about Vaca Muerta (translated Dead Cow) in 2012, which could be the worlds first major shale play to gain traction outside North America.

Recent newsflow.....

    • "Colossal" unconventional potential for oil and gas
    • Largest find ever for Repsol
    • $30/BOE F&D and LOE per Repsol....estimated $20 billion to develop 927mm BOE so implied approx. $20 f&d, $10 LOE
    • Depth of 2,500 to 3,000 meters
    • Over 2,000 ft thick in some areas
    • Vertical wells only so far....800+ ft thick section vs Bakken at 60-130' and EFS at 80-300'
    • Well costs reported in $7 million range
    • Two nearby lakes provide water for frac jobs
11.07.11 - 
  • Repsol YPF announced 927mm BOE discovery, 741mm of which is oil in the Vaca Muerta shale located in the Neuquin province of southern Argentina (increase from initial May '11 announced 150mm BOE discovery).
  • Vaca Muerta formation extends 30,000 sq km (YPF owns 12,000 sq km) - that's about 7.5 million acres
  • Wood Mackenzie identified Vaca Muerta as one of best shales in world
  • 927mm BOE resource from just 428 sq km Loma La Lata Norte area; 40-45* API crude
  • 15 vertical wells drilled producing an initial 5,000 boe/d (333 avg)
  • New exploratory area has well producing 400 boe/d of 35 degree oil

    • 100,000 acres in Vaca Muerta
    • Plans to drill first well soon in 1Q-12, results by late 2012, plenty of infrastructure in area....."preliminary testing looks pretty good."
    • First couple wells expected to cost $15mm, drive down to $10mm, very rough.
    • "We think it could be bigger than the Eagle Ford."
    • "The Vaca Muerta is at the top of every E&P company's list right now."
    • Hua.x-1 well driled to 4,100 meters in August (19.5% APA, 39% BOE CN) sent for testing, with results expedted Q1-12.  
    • 5/9/11 - announced ACs-15h well in Anticlinal Campamento field in Neuquen tested at 7 MMcf/d; 12,800 ft vertical depth and 2,800 vertical section hydraulically fractured.
    • Since 2008 has drilled more than 70 unconventional wells in Neuquen basin. 
    • Recent 'Gas Plus' sales at $5.22/Mcf 

Crown Point Ventures Ltd.
    • 11/7/11- Launch drilling program in 2012, 10-24 well campaign over two years.  Includes 2-4 well program targeting VM formation on western part of concession followed by 2-4 more on northeast part.

Americas Petrogas
    • 8/30/11 - Entered in farm-out agreement with XOM on Los Toldos blocks (163,500 gross acres); XOM to fund $54mm during exploration phase with a further $22mm if they proceed to exploitation, XOM will earn 45%, Americas Petrogas will operate and keep 45%, Gas y Petroleo del Neuquen will maintain 10%. 
    • 11/30/11 - acquired addt'l 40% WI in Loma Ranqueles block (33,400 gross acres) in western Neuquen Basin, taking WI to 90%; $29 million. 
    • 12/6/11 - Spud Los Toldos Este well; total depth of 3250 meters (9750 ft)....first well in farmout agreement with XOM.
Madalena Ventures Inc.
    • 7/18/11 - CAN X-4 well drilled to 11,027 ft tested at 650 Bbls of 39 degree oil and 780 mcf/d of gas at 700-900 psi wellhead pressure.
    • 7/18/11 - tested 40 b/d of 32 degree oil from Vaca Muerat shale at CAS X-1 well on southern part of Coiron Amargo block (unstimulated).
    • 9/6/11 - CorS X-1 well (Apache JV) drilled to 14,760 TD.  2,323 ft of Vaca Muerta found, 2,024 ft of Quintuco formation overlaying VM and 676 ft of Mulichinco formation logged and cored.  
XOM, Total, Antrim, ArPetrol, CVX, PBR also in play

Price Regulation

    • $60/Bbl price cap, increased from $42/Bbl
    • October 2011 new regulations on ability of exporters to repatriate monies from Argentina.
    • 'Plus' programs allow higher than regulated prices through tax incentives

..should be more to come on the Dead Cow in 2012, keep an eye on some of these names.