finance
Argentina Launches Largest Vaca Muerta Auction Since 2016 With 15 Exploration Blocks
Argentina has opened bidding on 15 new blocks in the Vaca Muerta shale formation through provincial company Gas y Petróleo del Neuquén. The auction, the largest since 2016, comes as Vaca Muerta wells outperform major U.S. shale plays and production heads toward 1 million barrels per day. Rystad Energy called it the best organic entry point for international operators in a decade.
May 15, 12:00 PM·2m read1 source
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Argentina launched an auction offering 15 new exploration blocks in the Vaca Muerta shale play, the largest bid round since 2016 and more than double the six blocks offered in the previous provincial auction. The 15 blocks are offered through Neuquén provincial company Gas y Petróleo del Neuquén (GyP).
They span the condensate-rich northwest, the oil-heavy northeast, and the more frontier southern fringe of the formation.
Vaca Muerta is the largest commercial shale play open to international exploration and production companies outside of North America. Vaca Muerta wells are outperforming the US Permian, Bakken, and Eagle Ford on well productivity measures. Rystad Energy predicts that crude production from Vaca Muerta is on course to reach more than 1 million barrels per day by the end of the decade.
Well breakeven prices across the most prospective Vaca Muerta blocks run between $32 and $49 per barrel. Most transactions in the basin since the last provincial round have been inorganic, primarily acquisitions and farm-in deals rather than fresh acreage. Continental Resources acquired a 90% stake in the Los Toldos II Oeste block and subsequently farmed-in to Pan American Energy assets.
Com reported that the timing of the new auction reflects rising international appetite for non-Middle East supply amid supply chain risks tied to the Strait of Hormuz. Bidders will compete through a combination of working interest carried for GyP, royalties incrementally above the 15% minimum, work program commitments, and an access bonus, with a minimum threshold of $500,000 per block.
