It’s early in the game, but the recent announcement by Repsol YPF that it made an unconventional oil find in Argentina’s Neuquen Basin has people talking. YPF drilled and fractured five wells in the Late Jurassic to Early Cretaceous Vaca Muerta formation, and was comfortable enough with its drilling results and seismic data to prognosticate a find of 150 million barrels of recoverable oil.
The company said preliminary results of the first vertical wells posted initial flows ranging from 200 to 560 barrels per day. The sediments of the Vaca Muerta are a mixture of bituminous shales and interbedded limestones. The basal section has been reported to be high in total organic content, and the shale covers a broad area. The Vaca Muerta is one of the major source rocks for the Neuquen, which is Argentina’s most prolific basin.
Geological characteristics appear to put the Vaca Muerta shales in the league of the Eagle Ford. And, as in the Eagle Ford, the Vaca Muerta shale (translated as “dead cow” in English) exhibits both oil and gas windows, grading from gas in its western extent to liquids on its eastern side.
YPF will now develop a pilot project in a 25-square-kilometer area, and delineate another 200-square-kilometer area. During the remaining part of 2011, it plans to drill 17 new wells and fracture-stimulate 14 existing wells. Total capex for this work is estimated at $270 million.
Location of the discovery (Loma La Lata-Cuenca Neuquina). (Source: Repsol)
The company says the Vaca Muerta project will be the first massive development of an oil-prone shale reservoir outside of North America. But unlike North America, Argentina’s domestic crude is price controlled. Recently, prices have risen from some $42 a barrel to near $60 a barrel, but it still is far below world levels. That sets the bar quite high for achieving economic production.
Contact the author, Peggy Williams, at pwilliams@hartenergy.com.
For more on global shale-gas developments, please visit https://www.hartenergy.com/Upstream/Research-And-Consulting/Global-Shale-Gas-Study/
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