Thursday, May 22, 2014

Argentina hits shale oil bonanza


Argentina has won the "geological lottery" with its 1,000-foot-thick Vaca Muerta shale oil and gas field in Patagonia, a spokesman for Chevron said on Thursday, as the U.S. energy giant increases its investments in the country. The company and state-owned oil firm YPF announced plans last month to invest an additional $1.6 billion to develop Vaca Muerta.


Some studies indicate Argentina is sitting atop a shale bounty that could transform the outlook for the Western Hemisphere's supply and secure the South American country's energy self-sufficiency for decades. "What we've seen with YPF has been positive so far. Their per-well costs are coming down," Robertson added. "And the provincial governments in the area of Vaca Muerta understand oil development. They support it. So that's one less barrier."

This news from Chevron is very encouraging and bolsters the view I wrote about in this article a while back. I am playing this by taking a position in Canadian oil and gas junior Madalena Energy which is right next door to some of the bigger Vaca Muerta players. Many people complain that there is no opportunity or that they cannot find anywhere to invest. It just takes effort and a little research as opportunity is always around the next corner. I think this Vaca Muerta shale play in Argentina could rival the Bakken or Eagle Ford shale here in the US.

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