The Prospectivity of Unconventional Oil and Gas Resources in the Vaca Muerta Shale of the Neuquén Basin of Argentina
Dr. A. Easton Wren Americas Petrogas Petrogas Inc.
Symbol: BOE Toronto Stock Exchange
Forward Looking Statement Certain statements, table and graphs throughout this presentation may contain “forward-looking statements” or legislation. Forward-looking statements “forward looking information” within the meaning of applicable securities legislation. or information in this presentation include, but are not limited to, statements, tables and graphs (collectively performance; projected production, sales, reserves reserves and growth “statements”) with respect to: future economic performance; estimates for crude oil, natural gas, NGLs and liquids as well as potash, brine and other minerals and mineral resources; projections projections made on a per share basis; basis; the Company’s 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 Company’s projections with respect to its ability to develop resource plays and the percentage of production from resource plays in the future; projections of the Company’s reserves; projected capital costs and risks associated with respect to API’s 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 Company’s 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 un due reliance on forward-looking information, as there can be no assurance that the plans, intentions or expectations 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 statements are reasonable, there there can be no assurance that such expectations will prove prove to be correct. 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 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
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
“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 Neuquén 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
Simplified Cross-Section: Neuquén Basin Key Source Rocks and selection of Conventional/Unconventional Reservoirs West
East
Modified from Cruz et al., 2002; Howell,.J et al.,2005
Key Source Rocks
Vaca Muerta and Los Molles Shales
Modified after Howell,J. et al.,2005
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
Legaretta et.al., 1995
Neuquén Basin Structural Elements
Base of the Vaca Muerta Shale in the Neuquén Basin TWT Shallow
Deep
Regional time structure seismic map based on limited information Courtesy: Victor Linari
Main Structural / Depositional Elements with Shale Prospectivity 1 Huincul Dorsal 2 Chihuidos High
7
2 4
5
6
3 Picún Leufú Sub Basin 4 Huacalera Low 5 Neuquén Embayment
1 3
6 NE Platform 7 Neuquén Fold Belt 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
Courtesy: Victor Linari
YPF: Chihuido de la Sierra Negra
1.3
Vaca Muerta shale oil discovery: in production test
0.6
YPF: Bajada de Añelo, Bandurria & Loma Campana
0.0
SHALE OIL 2010/11 EXPLORATION & DEVELOPMENT 3 new wells drilled to date BAñ.x-1 (Bajada de Añelo) in Bajada de Añelo block tested 40 m3/d of oil from Vaca M uerta with 5 frac clusters
APACHE & MADALENA: Cortadera Drilled CorS.x-1 (Cortadera Sur), vertical exploration well to Vaca M uerta; waiting on completion.
2.0 ROCH : Coirón Amargo CAS.x-1 (Coirón Amargo Sur) 3 months production from Vaca Muerta, flowing @ 4 m3 /d (25 bbl/d) after only an acid job, no frac.
APACHE & AMERICAS PETROGAS: Huacalera Hua.x-1 (Huacalera), vertical exploration well to Vaca Muerta; waiting on completion.
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 Km 2 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
560
200
240
Loma La Lata
4093 337
0
0.0
Km
30
216
Monday November 7 YPF announced 927 mmbbl 2.0 of shale oil resources from the Vaca Muerta in Loma La Lata from 15 wells
IPs in BOEPD
Unconventional Plays: Neuquén's Potential Shale Comparisons Haynesville Lithology
Barnett
Marcellus
Siliceous Marl Siliceous Shale Siliceous Shale
W o o d f o r d Vaca Muerta
Horn River
Eagle Ford
Chert
Siliceous Marl
Chert
Calcareous Shale
3 to 4%
4 to 5%
4 to 7%
4 to 8%
3 to 5%
3 to 6%
4 to 8%
Net Thickness (Ft)
225 to 300
150 to 250
75 to 150
75 to 150
300 to 1300
125 to 450
120 to 280
Maturity (Ro)
1.7 to 2.8
1.3 to 2.1
1.3 to 2.4
1.2 to 2.8
1.4 to 1.8
1.6 to 2.7
0.7 to 1.8
9.6 to 10.6
11.6 to 13.5
9.6 to 10.6
9.4 to 17.3
10.6 to 13.5
9.6 to 14.5
7 to 9%
4 to 8%
7 to 9%
5 to 6%
7 to 12%
4 to 10%
4 to 10%
100 to 500
50 to 200
100 to 200
40 to 70
50 to 200
100 to 1000
100 to 1500
8 to 25
3 to 7
4 to 10
2 to 6
2 to 12
5 to 8
2 to 17
GIP*/Sq Mi (bcf)
150 to 250
100 to 150
75 to 125
75 to 150
300 to 800 (bcf)
175 to 250
80 to 250
EUR**/Well (bcf)
8 to 12
3 to 4.5
3 to 6
2.5 to 5
8 to 20
4 to 10
2 to 6
Average Mature TOC(%)
Pressure Gradient (ppg) 13.5 to 17.3 Porosity (%) Permeability (nD) Well IP (mcfd peak month)
* Gas in place ** Estimated Ultimate Recovery
All different with no clear analogs
Companies with Recent Land Acquisitions in the Shale Fairway API has 1.28 million net acres along the northsouth trending shale corridor
Shale Compositional Characteristics Comparison Comparison
The Horn River, Barnett, Haynesville and Bakken appear to be Vaca Muerta analogs
NuTech analysis of Barnett and Vaca Muerta shale sections in wells in API blocks. The similarity of extensive, continuous permeability and silica is compelling
Barnett
Los Toldos
Silica Clay Calcite Permeability Hydrocarbon
Los Toldos
Los Toldos
0 feet 0
Relative Maximum Thickness Vaca Muerta
Barnett
Haynesville
Marcellus
Eagle Ford
Horn River
500
1000
Vaca Muerta
Barnett
Haynesville
Marcellus
Eagle Ford
Horn River
2350
500
350
300
220
600
Estimates of Maximum Thickness (feet ) 1500
Note: Net and gross thicknesses of the shales vary with different published sources 2000
0
Estimation Comparison: Gas
Apache Corporation estimates 150+ bcf/section ultimate recovery for the Vaca Muerta shale gas in its drilled and tested Neuquén Basin properties (Apache Corporation, May 17, 2011 Investor Day Presentation, p.6)
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
0
0
Estimation Comparison: Oil
Repsol YPF estimates 43 million barrels of Oil In Place per square kilometre for its Neuquén 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
Risked Resource Estimates
Challenges and Technologies
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
Iguazu Falls, Argentina
“Non-conventional oil reservoirs in the Neuquén Basin are superior to the United States” Tomás Garcia Blanco, Director E & P, YPF, October 17, 2011 Source: Platt Symbol: BOE
Acknowledgements: Victor Linari, Gustavo Diez, Marcelo Santiago:
Toronto Stock Exchange
Thank you for your attention!!
