Wintershall DEA Farms Out Argentine Blocks

Wintershall Dea has farmed out a stake in the giant Vaca Muerta shale play in Argentina to the US major ConocoPhillips but retains the operatorship, the German independent said July 25.

The Aguada Federal and Bandurria Norte blocks in Neuquen hold significant unconventional oil and natural gas resources in the prospective Vaca Muerta shale formation, it said, without disclosing the deal's value.

"ConocoPhillips’ extensive know-how developed across unconventional operations in US shale plays complements Wintershall Dea's technological expertise and decades of local experience. We are excited about this new partnership as it will allow us to expedite the development of the two blocks," said board member Thilo Wieland, responsible for Latin America. Wintershall Dea has already successfully conducted pilot projects in both blocks. The production testing is ongoing.

The transaction is expected to be closed in 2019, subject to approval by the relevant authorities. As part of the transaction ConocoPhillips will acquire a 45% interest share in the Aguada Federal block. Wintershall Dea as the operator will retain a 45% share in the block (97 km²) . The remaining 10% is held by Gas y Petroleo del Neuquen.

ConocoPhillips will also acquire a 50% share in the nearby Bandurria Norte block (105 km²). Wintershall Dea will retain the other 50% and will remain operator of the block.

In addition to Aguada Federal and Bandurria Norte, Wintershall Dea holds shares in the blocks San Roque and Aguada Pichana Este, within the promising Vaca Muerta fairway. As domestic shale gas production rises, Argentina is moving from imports of LNG to exports, but there are onshore infrastructure bottlenecks limiting shale gas deliveries to the coast.