Vaca Muerta Shale Oil
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Transcript of Vaca Muerta Shale Oil
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Americas Petrogas Inc.
The Prospectivity of Unconventional Oil and Gas
Resources in the Vaca Muerta Shale of the Neuqun
Basin of Argentina
Symbol: BOE
Toronto Stock Exchange Dr. A. Easton Wren
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Certain statements, table and graphs throughout this presentation may contain forward-looking statements or forward looking information within the meaning of applicable securities legislation. Forward-looking statements or information in this presentation include, but are not limited to, statements, tables and graphs (collectively statements) with respect to: future economic performance; projected production, sales, reserves and growth estimates for crude oil, natural gas, NGLs and liquids as well as potash, brine and other minerals and mineral resources; projections made on a per share basis; the Companys ability to achieve its production and sales guidance; the potential production, scalability and upside associated with resource plays; the potential future success, growth, timing and production for its various properties; the Companys projections with respect to its ability to develop resource plays and the percentage of production from resource plays in the future; projections of the Companys reserves; projected capital costs and risks associated with respect to APIs various regions, assets and initiatives; projected future drilling costs, non-fuel operation costs, potential dispositions of assets, including anticipated proceeds there from, the use of such proceeds and the dates for receipt thereof; projections of future drilling inventories and plans therefore; anticipated currency exchange rates; projected growth rates capable of being sustained from the Companys asset base in the future; projections of the potential future price and market for petroleum, natural gas, potash and other minerals; and reference to potential exploration and the timing and success thereof.
You are cautioned not to place undue reliance on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which it is based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Accordingly, the Company cautions that events or circumstances could cause actual results to differ materially from those predicted. Statements relating to reserves or resources or resource potential are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves and resource potential described exist in the quantities predicted or estimated, and can be profitably produced in the future. You are further cautioned not to place undue reliance on forward-looking statements contained in this web site, which are made as of the date hereof, and except as required by applicable law, the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. All oil and gas reserve information is based on the statement of reserves data and other oil and gas information filed by Americas Petrogas Inc. for the year ended December 31, 2010, a copy which can be found on www.sedar.com
Forward Looking Statement
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Unconventional Shale Hydrocarbon Potential
The Vaca Muerta and Los Molles Shales are the two principal source rocks in the Neuquen Basin
They are thick, widely distributed and organically rich; depending on their depth and maturity they may be gas and/or oil charged and
overpressured
Recent announcements (YPF, Apache) of shale gas and shale oil discoveries coupled with substantial land acquisitions by major oil
companies (ExxonMobil,Total, Petrobras and others) has the play
well underway
Argentina must currently import natural gas and with the eia estimate of > 774 tcf (3rd behind China and North America), and with
a suggested gas price up to $7.70/mmbtu for unconventional gas,
the unexploited resource could be the key to economic growth
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World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States
April 5, 2011
The resource potential of the Vaca
Muerta Shale in the Neuqun
Basin is estimated at 168
bcf/sq.mi., comparable to that of
the age-equivalent Haynesville
Shale in the United States.
The Vaca Muerta risked shale gas
in-place is 687 tcf, with risked
technically recoverable resources
of 240 tcf.
Resource Estimates for
selected countries in the
Americas
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Simplified Cross-Section: Neuqun Basin
Key Source Rocks and selection of Conventional/Unconventional Reservoirs
Key Source Rocks
Modified from Cruz et al., 2002; Howell,.J et al.,2005
West East
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Vaca Muerta and Los Molles Shales
Los Molles Vaca Muerta
Geologic Age M. Jurassic Jur-Cret
Area sq.miles 9,730 8,540
Thickness (m) 0 3,300 100-750
Rich (m) 800 500
Net (m) 300 325
Depth Interval (ft) 6,500-15,000 5,500-10,000
Average Depth (ft) 12,500 8,000
Reservoir Pressure Overpressured Overpressured
Average TOC Wt.% 1.1% 4.0%
Thermal Maturity Ro 1.5% 1.25%
Clay content Low/medium Low/medium
GIP (bcf/sq.mi.) 123 168
Risked GIP (tcf) 478 687
Risked
Recoverable(tcf)
167 240
Modified after Howell,J. et al.,2005
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Neuqun Basin Structural Elements
Legaretta et.al., 1995
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Base of the Vaca Muerta Shale in the
Neuqun Basin
Shallow
Deep
TWT
Regional time structure
seismic map based on
limited information
Courtesy: Victor Linari
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1
2
5
1
4
3
2
5 4
3
Huincul Dorsal
Chihuidos High
Picn Leuf Sub Basin
Huacalera Low
Neuqun Embayment
1
Main Structural / Depositional
Elements with Shale Prospectivity
Vaca Muerta source rock is present and prospective for oil
and gas in a large portion of the basin.
On 1 and 2 the shale is shallower but partially or totally
eroded due to the structural uplift
6
7
6 NE Platform
7 Neuqun Fold Belt
Courtesy: Victor Linari
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YPF: Loma La Lata
SHALE OIL 2010/11 EXPLORATION &
DEVELOPMENT
7 new wells (6 vertical, 1 500-m length horizontal) drilled to date, plus 3 deepenings and 1 reentry
3 to 5 fracs per well
IP: 200 to 560 bls/d (average first month)
Area to develop: 330 Km2
Technically Recoverable Resources: 150 MMbls
2011 Plan: 17 new wells, 14 workovers (to be fractured); Total Investment: 270 MMU$S (100
MMU$S invested)
APACHE: Anticlinal Campamento
ACO.xp-2001(h): First multifractured (10 fracs)
horizontal well drilled in Latin America.
Producing from Los Molles shales; IP: 4.5
mmcfd
APACHE & MADALENA: Cortadera
Drilled CorS.x-1 (Cortadera Sur), vertical
exploration well to Vaca Muerta; waiting on
completion.
APACHE & AMERICAS PETROGAS:
Huacalera
Hua.x-1 (Huacalera), vertical exploration well
to Vaca Muerta; waiting on completion.
Loma La Lata
0 Km 30
YPF: Bajada de Aelo, Bandurria & Loma
Campana
SHALE OIL 2010/11 EXPLORATION &
DEVELOPMENT
3 new wells drilled to date
BA.x-1 (Bajada de Aelo) in Bajada de Aelo block tested 40 m3/d of oil from Vaca Muerta with 5
frac clusters
ROCH : Coirn Amargo
CAS.x-1 (Coirn Amargo Sur) 3 months production
from Vaca Muerta, flowing @ 4 m3/d (25 bbl/d) after
only an acid job, no frac.
560 200 240
4093 337
216 IPs in BOEPD
Monday November 7 YPF announced 927 mmbbl
of shale oil resources from the Vaca Muerta in
Loma La Lata from 15 wells
0.0 0.6 1.3
2.0
0.0 2.0
YPF: Chihuido de la Sierra Negra
Vaca Muerta shale oil discovery: in production
test
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Chert
3 to 6%
125 to 450
1.6 to 2.7
10.6 to 13.5
4 to 10%
100 to 1000
5 to 8
175 to 250
4 to 10
Horn River
Lithology
Average Mature TOC(%)
Net Thickness (Ft)
Maturity (Ro)
Pressure Gradient (ppg)
Porosity (%)
Permeability (nD)
Well IP (mcfd peak month)
GIP*/Sq Mi (bcf)
EUR**/Well (bcf)
Siliceous Marl
3 to 4%
225 to 300
1.7 to 2.8
13.5 to 17.3
7 to 9%
100 to 500
8 to 25
150 to 250
8 to 12
Haynesville
Siliceous Shale
4 to 5%
150 to 250
1.3 to 2.1
9.6 to 10.6
4 to 8%
50 to 200
3 to 7
100 to 150
3 to 4.5
Barnett Marcellus
Siliceous Shale
4 to 7%
75 to 150
1.3 to 2.4
11.6 to 13.5
7 to 9%
100 to 200
4 to 10
75 to 125
3 to 6
Chert
4 to 8%
75 to 150
1.2 to 2.8
9.6 to 10.6
5 to 6%
40 to 70
2 to 6
75 to 150
2.5 to 5
Woodford
Siliceous Marl
3 to 5%
300 to 1300
1.4 to 1.8
9.4 to 17.3
7 to 12%
50 to 200
2 to 12
300 to 800 (bcf)
8 to 20
Vaca Muerta
Shale Comparisons
* Gas in place
** Estimated Ultimate Recovery
Calcareous Shale
4 to 8%
120 to 280
0.7 to 1.8
9.6 to 14.5
4 to 10%
100 to 1500
2 to 17
80 to 250
2 to 6
Eagle Ford
Unconventional Plays:
Neuqun's Potential
All different with no clear analogs
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Companies with
Recent Land
Acquisitions in the
Shale Fairway
API has 1.28
million net
acres along
the north-
south trending
shale corridor
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Shale Compositional Characteristics Comparison
Comparison
The Horn River, Barnett,
Haynesville and Bakken
appear to be Vaca
Muerta analogs
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Barnett
Los Toldos
Los Toldos
Los Toldos
NuTech analysis of Barnett and Vaca Muerta shale sections in wells in API blocks.
The similarity of extensive, continuous permeability and silica is compelling
Silica
Clay
Calcite
Permeability
Hydrocarbon
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Note: Net and gross thicknesses of the
shales vary with different published sources
Estimates of Maximum Thickness (feet)
Vaca
Muerta
Barnett Haynesville Marcellus Eagle Ford Horn River
2350 500 350 300 220 600
Vaca Muerta Barnett Haynesville Marcellus Eagle Ford Horn River
0
0
1000
1500
500
2000
Relative Maximum Thickness feet
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0
0
Apache Corporation estimates 150+ bcf/section
ultimate recovery for the Vaca Muerta shale gas in its
drilled and tested Neuqun Basin properties
(Apache Corporation, May 17, 2011 Investor Day Presentation, p.6)
Estimation Comparison: Gas
Apache: Vaca Muerta Talisman: Montney
150 bcf/section 128 bcf/section
11.7 tcf for 50,000 acres 10 tcf for 50,000 acres
*Talisman Energy Presentation September 1,2011, p.13 One of the richest properties so far reported in North America
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0 Estimation Comparison: Oil
Repsol YPF estimates 43 million barrels of Oil
In Place per square kilometre for its Neuqun
Shale Oil Property based on an average Vaca
Muerta Shale thickness of 200 metres
(Repsol 2Q Presentation, Mr. Miguel Martinez, July 28, 2011, p17)
Repsol Vaca Muerta Eagle Ford
200 metre thickness 70 metre thickness
43 million bbl. in place /sq.km 23 million bbl. in place /sq.km
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18
Risked Resource Estimates
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This is a very early stage in the exploration of the Vaca Muerta
The shale has a long depositional history with variable mineralogy composition and reservoir characteristics
There is limited published information in terms of some of the key parameters:
porosity, permeability, brittleness, natural fractures, sweet spots, and gas/oil in place/recoverable
The Vaca Muerta is so thick that completed vertical wells may turn out to be preferable to horizontals
A critical element relates to gas and oil pricing scenarios and monetization of the resource; moving resources to reserves
Rapidly developing drilling and completion technologies will be available to accelerate the advancement of the play
The North American Learning Curve will increase efficiency and reduce costs
Challenges and Technologies
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Symbol: BOE
Toronto Stock Exchange
Thank you for your attention!!
Non-conventional oil reservoirs in the Neuqun Basin are superior to the United States
Toms Garcia Blanco, Director E & P, YPF, October 17, 2011
Source: Platt
Iguazu Falls, Argentina
Acknowledgements: Victor Linari, Gustavo Diez, Marcelo Santiago: