Thursday, March 10, 2016

Madalena Energy and Vaca Muerta article



But here, where the oil and gas industry operates inside a government-made, subsidized bubble, taxpayers and drivers spend billions of dollars to try to keep that from happening. A barrel of oil fetches more than twice what it does in the U.S., and prices for natural gas can be nearly four times higher.


“You’ve got to incentivize people to do exploration and development, especially when prices are low,” said Ali Moshiri, president of Latin America and Africa for Chevron Corp., which has an exploration-and-production joint venture with YPF. “If Argentina carries on with these incentives, it will encourage others to come to the country.”

if you think that price of oil will stay low for an extended amount of time than speculating on Madalena Energy makes no sense. However oil is a depleting resource and the recent low prices means lower investment. At some point that failure to invest sufficient capital will lead to higher prices. A company like Madalena Energy is worth a lot of money in a scenario of higher prices. 

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