Andes Energia PLC Las Varillas x-1 well. Discovery in Vaca Muerta (5095Z)
07 February 2014 - 6:00PM
UK Regulatory
TIDMAEN
RNS Number : 5095Z
Andes Energia PLC
07 February 2014
7 February 2014
Andes Energia plc
("Andes" or "the Company")
Las Varillas x-1 well. Discovery in Vaca Muerta
The Board of Andes (AIM: AEN; BCBA: AEN) is pleased to announce
an update on the "Las Varillas x-1". The well, a multi-target
unconventional and conventional exploration well, is located in the
El Manzano West block in the Neuquén basin, South Mendoza Province,
Argentina.
Highlights:
-- 410 feet (125 metres) of gross pay in the Vaca Muerta formation discovered
-- Persistent presence of oil shows in the Vaca Muerta formation during drilling
-- Las Varillas well to be fracked and tested
-- Las Varillas well is the most northern well to be drilled
into the Vaca Muerta, where Andes has 170,000 net acres
-- Third successful well targeting the unconventional Vaca Muerta formation in Andes's portfolio
-- Oil discovered in the conventional Agrio formation and in the Neuquen Group
The Las Varillas x-1 well, the most northerly well to be drilled
into the Vaca Muerta, was vertically drilled reaching a total depth
of 7,851 feet (2,393 metres) and encountered 410 feet (125 metres)
of gross pay in the unconventional Vaca Muerta formation, the
primary target. The top of the Vaca Muerta formation was penetrated
at a depth of approximately 7,290 feet (2,222 metres). The drilling
was characterised by the persistent presence of oil and gas shows
through most of the Vaca Muerta interval. Geochemical data were
sampled at two metre intervals through the entire Vaca Muerta
column. Oil was also found in the mud pits. Two 18 metres core
samples from the Vaca Muerta formation have been recovered and a
comprehensive suite of logs has been run. The analysis of this data
during the next few months will provide information on porosity,
permeability, total organic carbon content, thermal maturity and
hydrocarbon composition, which will be used to design the
completion, fracking and production testing of this well.
With regards to secondary conventional targets, core samples
totalling 60 feet (18 metres) were taken from the Agrio formation.
The top of the Agrio formation was encountered at a depth of 6,355
feet (1,937 metres) with a gross pay of 859 feet (262 metres).
Hydrocarbons were encountered in both the Agrio formation and in
the Neuquen Group (the same formation target of the Mirador del
Valle x-1 discovery well in El Manzano West block, announced on 13
November 2013), and further analysis of this discovery will be done
in the months ahead.
The Las Varillas x-1 well was drilled by YPF with the assistance
of the service company Schlumberger. Andes was fully carried during
the drilling of this well, as part of the farm-in agreement with
YPF under which Andes has a 100% working interest in all production
from the Agrio formation and a 40% carried interest in the Vaca
Muerta and other formations.
Alejandro Jotayan, CEO of the Company, commented: "The Las
Varillas x-1 is the third successful unconventional well targeting
the Vaca Muerta formation drilled by the JV between Andes and YPF.
This well, which proved the existence of the Vaca Muerta formation
in the El Manzano West block with excellent petrophysical
conditions is located in an area where Andes has 170,000 net acres
nearby, out of an overall total of 213,000 net acres covering the
Vaca Muerta formation. This, together with the conventional
discovery of the Mirador del Valle x-1 in the same area and the
current productive Chachahuen concession, places Andes in an
exciting position to develop these large unconventional and
conventional potential resources, together with the other high
potential exploration blocks in the Andes's portfolio."
For further information please contact:
Andes Energia plc Nicolas Mallo Huergo, Chairman T: +541141105150
Alejandro Jotayan, CEO
Billy Clegg, Head of Communications T: +442079691828
Westhouse Securities Antonio Bossi T: +442076016100
David Coaten
Buchanan Tim Thompson T: +442074665000
Ben Romney
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas
companies, Mr. Juan Carlos Esteban has reviewed the information
contained in this announcement. Mr. Juan Carlos Esteban, an Officer
of the Group, is a petroleum engineer with over 20 years of
experience and is a member of the SPE (Society of Petroleum
Engineers).
Note to Editors:
Andes Energia is an oil and gas company focussed on onshore
South America with a market capitalisation of circa GBP280m. The
Company has operations in Argentina, Colombia, Brazil and Paraguay,
representing three of the largest economies and three of the four
largest oil producing nations in South America.
The Company has 20MMbbls of conventional 2P reserves in
Argentina and certified resources of 600MMBoe, primarily in the
Vaca Muerta unconventional formation in Argentina and 7.5million
acres across South America.
The Company has approximately 2 million net acres in
unconventional plays including 213,000 net acres in the Vaca Muerta
formation, which is the second largest shale oil deposit in the
world and the only producing shale oil deposit outside of the USA.
Over 250 wells have already been drilled and fracked in the Vaca
Muerta formation.
Andes is the only AIM company on the London Stock Exchange with
exposure to Vaca Muerta.
The Company currently produces 1,400 bbls per day in Argentina
from 7 conventional fields, with positive cash flows generated.
Andes Energia, with its partner YPF, has 30 wells planned over the
next 12 months, which are fully funded by the field production cash
flow.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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