Argentina’s “dead cow” play—in Spanish, the vaunted Vaca Muerta—has enticed yet another big-time investor: Aubrey McClendon’s American Energy Partners LP (AEP).

AEP plans to put a half billion dollars into the geological wonder that has attracted the attention, in dollars, of oil majors worldwide.

AEP, based in Oklahoma City, said Jan. 14 it signed initial farm-in agreements with state-run YPF SA (NYSE: YPF) for the exploration and development of Argentina's Vaca Muerta Shale.

Under the agreements, an AEP affiliate will earn up to 50% participating interest in several blocks. Both companies plan to invest more than US$500 million in the partnership over the next three years.

AEP, led by co-founder and CEO McClendon, has moved far and wide since the company’s inception with investments in the Utica and Eagle Ford. In 2015, the company entered a farm-in deal with Australia's Armour Energy Ltd. to develop unconventional acreage in the country’s McArthur Basin.

In the U.S. the company said that since its formation in 2013 it has drilled more than 15,000 horizontal shale wells, according to the release.

Aubrey McClendon, American Energy Partners, Chesapeake, Hart Energy, A&D Strategies and Opportunities

"Through our partnership with YPF, we intend to bring U.S. style shale drilling and operating expertise, completion techniques and cost structure to the Vaca Muerta, which we believe will prove transformative for the play," McClendon said.

Initially, the companies will launch a shale oil and gas development pilot in the Bajada de Añelo Block covering about 55,500 acres. The companies expect a first stage to be completed by mid-2018.

Next, the companies plan to enter into the full field development phase in “U.S. style shale manufacturing” mode, the release said.

In addition, YPF and an affiliate of AEP, in partnership with Pluspetrol and Gas y Petróleo de Neuquén, will launch a second project to delineate shale gas resources in the southern portion of the Cerro Arena Block, covering about 92,600 acres.

The farm-in agreements were signed on Jan. 14 by McClendon and Miguel Galuccio, president and CEO of YPF, at the Argentina company’s headquarters in Buenos Aires.

During the next three months, the companies will negotiate the definitive agreements with the purpose of initiating joint operations in Bajada de Añelo and Cerro Arena Sur during 2016.

YPF and its partners have invested more than US$3 billion to develop unconventional oil and gas in Argentina, the release said. The company holds 43% of the country's oil and gas production market share.

Have A Cow

In 2013, the Energy Information Administration ranked Argentina as the second largest shale gas reserve in the world. The country has onshore shale gas reserves estimated at 802 trillion cubic feet.

The country also was ranked the world’s fourth largest resource holder of technically recoverable shale oil, with reserves estimated at 27 billion barrels.

YPF estimates full development of the Neuquén Basin’s Vaca Muerta Shale resources will require $200 billion in investment over the next 10 years, said Jessica Garrison, upstream manager at Stratas Advisors.

A number of large operators such as Chevron Corp. (NYSE: CVX), Royal Dutch Shell Plc (NYSE: RDS.A), Total Austral, Petronas and ExxonMobil Corp. (NYSE: XOM) have joined YPF in increasing exploration activity, Garrison said.

More recently, Dow Chemical Co. (NYSE: DOW) entered a $500 million joint venture (JV) with YPF in December to drill for natural gas in the Vaca Muerta Shale in Patagonia.

Contact the author, Emily Moser, at emoser@hartenergy.com.