(Updates with closing share prices in fifth paragraph.)
Jan. 25 (Bloomberg) -- Exxon Mobil Corp. and Americas Petrogas Inc. have “phenomenal” tight natural-gas prospects in Argentina and expect “explosive” output growth in 5 years, said Guimar Vaca Coca, managing director of Americas Petrogas.
Petrogas expects shale-oil and gas output to reach at least 10,000 barrels a day by 2017, Vaca Coca said in an interview in Buenos Aires today. The two companies are investing about $50 million to drill wells in Argentina’s southern Patagonia region this year and expect to invest $1.5 billion to $2 billion by that date.
Argentina’s shale oil and so-called tight-gas resources may exceed the 774 trillion cubic feet (21.9 trillion cubic meters) estimated by the U.S. Energy Information Administration, Vaca Coca said. Argentina’s shale resources are the third-largest in the world after China and the U.S., the EIA said in an April 2011 report.
“In the first well we drilled, we found excellent signs of tight gas,” Vaca Coca said on the sidelines of an American Business Conferences event. “We’re going to concentrate on testing the shale-gas prospects first and then we’ll examine the tight gas ones.”
Petrogas rose 2.2 percent to C$3.72 in Toronto. Irving, Texas-based Exxon gained 0.1 percent to $87.22 in New York.
Exxon, the largest U.S. oil company, and Calgary-based Petrogas, are drilling at the same Vaca Muerta formation in the Neuquen Basin where YPF SA, Argentina’s largest energy company, made its biggest discovery of 927 million barrels of shale-oil resources on Nov. 7.
YPF’s discovery at the Loma La Lata field in Neuquen province was six times more than previously estimated. At the Vaca Muerta formation, 15 wells are producing between 200 and 600 barrels of oil a day, YPF, controlled by Madrid-based Repsol YPF SA, said in November.
Shale producers use a technique known as hydraulic fracturing, which involves pumping water, sand and chemicals underground to extract gas embedded in the rock.
Exxon and Petrogas are exploring three wells this year at the Los Toldos blocks, which cover 163,500 acres in the Neuquen Basin, and Petrogas is drilling another well in the Yerba Buena block, Vaca Coca said today.
Petrogas expects to have conventional oil and gas output of 20,000 to 25,000 barrels a day and be one of Argentina’s top 10 oil producers within 5 years, he said.
China’s technically recoverable shale-gas resources are estimated at 1,275 trillion cubic feet, while the U.S. has 862 trillion cubic feet of resources, according to the EIA report.
--Editors: Jasmina Kelemen, Dale Crofts
To contact the reporter on this story: Laura Price in Buenos Aires at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com