Capex SA, the Argentine natural gas and power producer that has declined 21 percent this year, will drill its first shale well this month, Chief Financial Officer Claudia Biasotti said.
The well will be in the company’s Agua del Cajon gas field, part of the Vaca Muerta shale formation in Neuquen province. Capex has an agreement with Houston-based Halliburton Co. (HAL:US), for the hydraulic fracturing of 11 wells, she said in a telephone interview yesterday.
Capex, based in Buenos Aires, is also seeking to boost the price at which it sells newly discovered gas to the government by potentially recreating a power-rate compromise it reached on May 31. Under that agreement, Capex said it wouldn’t sue the government for a decade of frozen rates in exchange for a higher electricity tariff. The company is holding talks with the Argentine government about a similar deal that may triple the price it gets for the new gas.
“If we get a deal for new gas, our balance sheet will show additional benefits soon,” Biasotti said. “The red figures we posted in the last few quarters will be reversed.”
Capex on Jan. 31 posted a nine-month loss of 70.2 million pesos ($13 million). The company reported a 6 percent decline in gas output for the same period, dropping to 501 million cubic meters from 531.3 million a year earlier.
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