Miguel Gutierrez, president of YPF, and Warren Levy, a pair of Patagonia Oil Corp, an affiliate of PentaNova Energy Corp, signed a terms and conditions agreement for the development of the Llancanelo block in the province of Mendoza.
During the signing of the agreement, held at YPF's offices in Buenos Aires, the two companies agreed on the main terms and conditions to start a heavy oil pilot project in Llancanelo with a total investment of $ 54 million over the next 36 months, Where YPF will be the operator and PentaNova will bring its experience and knowledge.
For YPF this agreement involves the association with a company with experience in the development of heavy crude, such as PentaNova - with crude oil projects in Colombia, Canada and Venezuela - that will accelerate the development of Llancanelo, one of the main deposits Conventional heavy crude oils in Argentina.
Llancanelo is an area of 96 km2 that is located 37 km south of the department of Malargue in Mendoza. It is a block that is already in activity with an average daily production of 256 m3 of crude oil and 3000 m3 of gas.
The investments of the pilot project corresponding to YPF's participation will be in charge of the affiliate of PentaNova as part of payment of the amount of the operation of acquisition of its participation in the area.
From this partnership, an affiliate of PentaNova will acquire from YPF an 11 percent interest in that area for 40 million dollars. In this way, YPF will maintain the 50 percent stake.
YPF shares the block in partnership with Roch and Alianza Petrolera Argentina. As part of the agreement, PentaNova's affiliate obtains the right to advance with the acquisition of the other partners' shares to increase its presence in Llancanelo.
In the course of the coming weeks, the parties will sign the definitive agreements.
