Americas Petrogas And ExxonMobil Sign Agreement For Shale Oil And Gas Project In Argentina
Calgary, AB (Marketwire) - Americas Petrogas (TSX VENTURE:BOE) ("Americas Petrogas" or the "Company"), a Canadian company, is pleased to announce that it has, through its wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., entered into a farm-out agreement (the "FOA") with ExxonMobil Exploration Argentina S.R.L., a wholly-owned subsidiary of Exxon Mobil Corporation (NYSE:XOM) ("ExxonMobil") for the exploration and potential exploitation of Americas Petrogas's Los Toldos blocks (163,500 gross acres or 255 sections or 660 square kilometers) located in Neuquén, Argentina. The Los Toldos blocks are located in the western region of the Neuquen Basin and are in a favorable location relative to other recent discoveries of shale oil and shale gas in the Vaca Muerta formation.
Barclay Hambrook, President and CEO of Americas Petrogas, stated "As the world's largest publicly-owned integrated oil and gas company, ExxonMobil brings vast experience, technology, research and financial resources to this joint venture with Americas Petrogas."
Pursuant to the terms of the FOA, ExxonMobil has committed to fund US$53.9 million (including taxes) during the exploration phase with a further US$22.4 million (including taxes) if the parties proceed to the exploitation phase, for a total potential initial investment of US$76.3 million. This focus of exploration, exploitation and other related activities is expected to be directed towards the Los Toldos 1 and 2 blocks. ExxonMobil will earn a 45% interest in the Los Toldos blocks with Americas Petrogas retaining a 45% interest and the government entity, Gas y Petroleo del Neuquen ("G&P"), maintaining a 10% interest. ExxonMobil will also provide technical assistance on the Los Toldos blocks. The FOA is subject to approval by G&P.
Americas Petrogas is the operator of the Los Toldos blocks and expects to spud the first well in the fourth quarter of 2011 with the primary target being the unconventional Vaca Muerta formation and potential secondary targets in other conventional and unconventional formations.
In addition to the Los Toldos blocks, Americas Petrogas has five other blocks within the Neuquén Basin's western shale corridor, including the Huacalera block which is located south of the Los Toldos blocks and which was recently drilled, cased and cemented, having intersected 1,742 feet of Vaca Muerta shale. In published reports, the U.S. Energy Information Administration has cited a risked, recoverable resource of 240 trillion cubic feet ("TCF") of gas for the Vaca Muerta shale in the Neuquén Basin.
Mr. Guimar Vaca Coca, Managing Director of Americas Petrogas' Argentina subsidiary, said, "We believe the next major shale development outside of North America will be in the Neuquen Basin. Our Argentina management and technical personnel look forward to working with ExxonMobil to explore the substantial hydrocarbon potential of the Los Toldos blocks."
Daniel De Nigris, General Manager of ExxonMobil Exploration Argentina, said, "We are pleased to be working with Americas Petrogas on the highly prospective Los Toldos blocks and if successful, look forward to providing clean and reliable energy for Argentina."
About Americas Petrogas Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in numerous blocks involving exploration, development and production. Americas Petrogas has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen Basin. For more information about Americas Petrogas, please visit www.americaspetrogas.com
About Vaca Muerta Shales
The Vaca Muerta Shale is one of two principal source rocks in the Neuquen Basin of Argentina. The shale is late Jurassic-early Cretaceous in age, covers an area of approximately 8,500 square miles, varies in depth between 5,500 to 14,000 feet and in places is up to 2,000 feet in thickness.
The Vaca Muerta characteristics are believed to be similar to shale reservoirs such as the Eagle Ford, Haynesville and Horn River in North America which have so far resulted in discoveries of both shale gas and shale oil. The shale has recently become the focus for many of the important shale gas players in North America, including Apache, ExxonMobil, Total as well as YPF in Argentina.
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
In particular, statements (express or implied) contained herein regarding exploration and exploitation plans/commitments on the Los Toldos blocks, operatorship, timing of drilling on Los Toldos, location of other blocks within the shale corridor, quantities of oil and gas reserves, and conventional and unconventional resources, should all be viewed as forward looking statements.
There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE: Americas Petrogas Inc.