Canada-based PentaNova Energy has agreed to buy an additional stake of 11% in the Llancanelo heavy oil field in Argentina from the country’s national oil company YPF.
The transaction, which will be subject to standard regulatory approval, would increase PentaNova’s stake in the Argentine oil field to 50%.
It is expected to pave way for the joint development of Llancanelo, which is considered to be one of the country’s largest heavy oil fields.
PentaNova chairman and executive director Serafino Iacono said: “Acquiring our full 50% working interest in the Llancanelo field positions PentaNova to begin a partnership with YPF to rapidly develop this asset is an important step in PentaNova becoming a major oil producer.
“By working with our partners YPF, we plan to take this field — already producing 1300 bbls/day — to its full potential and make Llancanelo the cornerstone of a heavy oil strategy in Argentina.”
Prior to the agreement, PentaNova had a stake of 29% through its wholly owned subsidiary Alianza Petrolera and a 10% stake it added through the acquisition of Argentine oil company Roch in May.
The Llancanelo oil field is located 37km southeast of the city of Malargüe in Mendoza province. It lies north of the Neuquén Basin, in a basin-edge position.
The oil field is contained between the core producing regions of the Neuquén basin and the Lujan de Cuyo refinery which has a processing capacity of 106,000bbls/day.
Discovered by YPF in 1937, the Llancanelo field is close to pipeline, existing road and airport infrastructure.
Last year, horizontal wells were drilled into the large heavy oil body and subsequent evaluation and planning after that, enabled YPF to achieve a flow of 1277boepd of oil through the wells in September.
The additional stake to be acquired by PentaNova will also grant it rights over the surrounding Llancanelo R block. The company is expected to work out detailed terms and conditions for the block in the near future with YPF.
Formerly known as PMI Resources, PentaNova Energy is an exploration and production company with focus on proven oil and gas plays across Latin America. PentaNova has a diversified portfolio of producing, development and unexploited assets located in Colombia and Argentina.