Vaca Muerta’s potential - EEEGR · 2018-12-21 · Bandurria Norte Aguada Federal La Ribera II La...
14
woodmac.com Trusted Intelligence Amanda Kupchella, 14 November 2018 Vaca Muerta’s potential Growth ahead for the international shale play
Transcript of Vaca Muerta’s potential - EEEGR · 2018-12-21 · Bandurria Norte Aguada Federal La Ribera II La...
woodmac.com Trusted Intelligence
Amanda Kupchella, 14 November 2018
Vaca Muerta’s potential
Growth ahead for the international shale play
2
woodmac.com
Steady progress in Vaca Muerta was led by YPF in early years
Other operators are now contributing to growth and will play an important role in the future of the play
Source: Wood Mackenzie
Vaca Muerta production
0
20
40
60
80
100
120
140
160
180
2011 2012 2013 2014 2015 2016 2017 2018
mb
oe
/d
Gas Liquid
2011: Repsol
announces positive
results from un-
conventional drilling in
the Neuquén basin.
2013: YPF signs
agreements with
Dow and Chevron
to develop El
Orejano and Loma
Campana,
respectively.
2014: Bajo del
Choique is
discovered by
ExxonMobil.
2015: Shell wins
35-year license
for Sierras
Blancas and
Cruz de Lorena.
2016: For the
first time, more
horizontal wells
are drilled in
Vaca Muerta
than vertical
wells.
2018:
Tecpetrol’s
Fortin de
Piedra reaches
340 mmcfd 2017: Total’s
Aguada Pichana
Este development is
sanctioned, Statoil
becomes the last
major (other than
Eni) to enter Vaca
Muerta
3
woodmac.com
Most activity has taken place close to existing infrastructure at the Loma Campana project
4
woodmac.com
0 100 200 300 400
La Calera
Bajada del Palo
Los Toldos I Sur
San Roque - Shale
Bajada de Anelo
Coiron Amargo Sur Oeste
Aguada de Castro
Aguada Pichana Oeste
Punta Senillosa
Aguada de la Arena
Bandurria Norte
Aguada Federal
La Ribera II
La Ribera I
Rincon del Mangrullo - Shale Good Tech
Pampa de Las Yeguas I
Bandurria Sur
Bandurria Centro
Bajo del Choique-La Invernada
Fortin de Piedra
Rincon la Ceniza
La Escalonada
La Amarga Chica
Cruz de Lorena-Sierras Blancas
Aguada Pichana Este - Shale
El Orejano
Loma Campana
Project Operator Window Year
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Loma Campana YPF Black oil 1 1 1 2 2 2 2 2 2 2 2
El Orejano YPF Dry gas 1 1 1 2 2 2 2 2
Aguada Pichana Este Total Dry gas 1 1 1 2 2 2 2
Cruz de Lorena-Sierras Blancas Shell Black oil 1 1 1 1 2 2
La Amarga Chica YPF Black oil 1 1 1 2 2 2
La Escalonada Total Light oil 1 1 1 1 1 2
Rincon la Ceniza Total Wet gas 1 1 1 1 1 2
Fortin de Piedra Tecpetrol Dry gas 1 2 2 2 2
Bajo del Choique-La Invernada ExxonMobil Light oil 1 1 1 1 1
Bandurria Centro PAE Light oil 1 1 1 1 2
Bandurria Sur YPF Black oil 1 2 2 2
Pampa de Las Yeguas I ExxonMobil Wet gas 1 1 1 2
Rincon del Mangrullo YPF Dry gas 1 1 2 2
La Ribera I YPF Wet gas 1 1 2 2
La Ribera II YPF Wet gas 1 1 2 2
Aguada Federal Wintershall Black oil 1 1 1 1
Bandurria Norte Wintershall Light oil 1 1 1 1
Aguada de la Arena YPF Wet gas 1 1 1 2
Punta Senillosa Tecpetrol Black oil 1 1 1 1
Aguada Pichana Oeste PAE Dry gas 1 1 2
Aguada de Castro PAE Dry gas 1 1 1
Coiron Amargo Sur Oeste Shell Black oil 1 2 2
Bajada de Anelo Shell Light oil 1 1 2
San Roque Total Light oil 1 1 2
Los Toldos I Sur ExxonMobil Wet gas 1 1 1
Bajada del Palo Vista Black oil 1 2 2
La Calera Pluspetrol Wet gas 1 1 2
Numerous sanctions are anticipated, but well density is still low on most blocks
Pilot
Development sanction
100 200 600 Number of wells currently on block
5
woodmac.com
50,000-acre Vaca Muerta section by window
To fully develop a Vaca Muerta block, US$1.9 billion is required on average
A typical Vaca Muerta block is 50,000 acres
Assuming three year, fifteen well pilot during which well costs are reduced to US$10.2 million for black oil, US$10.45 for light oil, US$10.65 wet gas, and US$12.2 for dry gas. Assume 80% of the acreage
is developed with 160 acre/well spacing. Assume laterals of 2,500 meters, EUR of .61 mmbbl/1.03 bcf for black oil, .53 mmbbl/2.52 bcf for light oil, .41 mmbbl/4.67 bcf for wet gas, 13.1 bcf for dry gas.
0.0
0.5
1.0
1.5
2.0
2.5
Black oil Light oil Wet gas Dry gas
US
$ b
illio
n
NPV10 of full development
Investment required (PV)
• An unconventional license in Neuquen
province lasts 35 years
• Commitments range from US$200-$400
million within the first 2-5 years
• Typical lead time to full development is 3-5
years, though there are exceptions
• An accelerated development timeline adds
value (a three year delay at Fortin de Piedra
could have eroded US$390 million in value)
6
woodmac.com
Future activity will come mainly from greenfield blocks where few shale wells have been drilled
Shift from vertical to horizontal wells allowed for increased production with fewer wells
Source: Wood Mackenzie
Vaca Muerta wells drilled by operator
0
100
200
300
400
500
600
700
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
We
lls
Vista
Pluspetrol
Chevron
Shell
ExxonMobil
PAE
Total
Tecpetrol
YPF
7
woodmac.com
Shift in operatorship: we expect companies other than YPF to claim 75% of the play’s production by 2024
Tecpetrol is implementing an aggressive development at Fortin de Piedra; Total operates almost all of the blocks where it has participation
Source: Wood Mackenzie
Vaca Muerta production by operator
0
200
400
600
800
1000
1200
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
mb
oe/d
Vista
Pluspetrol
Chevron
Shell
ExxonMobil
PAE
Total
Tecpetrol
YPF
8
woodmac.com
Vaca Muerta accounts for half of Argentina’s unconventional gas production
Vaca Muerta shale production will continue to grow as tight gas from other formations remains relatively constant
Source: Instituto Argentino del Petróleo y del Gas
Argentina unconventional gas production by formation
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
20
14
/01
20
14
/03
20
14
/05
20
14
/07
20
14
/09
20
14
/11
20
15
/01
20
15
/03
20
15
/05
20
15
/07
20
15
/09
20
15
/11
20
16
/01
20
16
/03
20
16
/05
20
16
/07
20
16
/09
20
16
/11
20
17
/01
20
17
/03
20
17
/05
20
17
/07
20
17
/09
2017/1
1
20
18
/01
20
18
/03
20
18
/05
20
18
/07
20
18
/09
bcf/
d
Vaca Muerta
Punta Rosada
Mulichinco
Magallanes
Los Molles
Lajas
Agrio
Others
9
woodmac.com
Market constraints limit upside for gas
Argentina is already meeting its domestic gas needs during the summer months, when demand is at its lowest
Source: Wood Mackenzie Argentina Gas and Power Service
Argentina gas supply and demand balance
0
50
100
150
200
2017 2018 2019 2020 2021 2022 2023 2024
mm
cm
d
Vaca Muerta shaleTightConventionalDomestic demand + exportsDomestic demand and pipeline exports
10
woodmac.com
Vaca Muerta drilling by scenario
Our base case requires US$5 billion of investment per year on average; an investment shortfall would slow growth
In our downside, we assume constant investment of US$3 billion per year, resulting in less than half of our base case production by 2024
Vaca Muerta production scenarios
0
200
400
600
800
1000
1200
2018 2019 2020 2021 2022 2023 2024
mboe/d
Base case
Downside
0
100
200
300
400
500
600
700
2018 2019 2020 2021 2022 2023 2024
We
lls
Base case
Downside
11
woodmac.com
Enormous upside remains from potential beyond our base case
The large shale play contains plenty of untapped acreage; some operators are already developing multiple zones
Source: Wood Mackenzie
Vaca Muerta well locations
4,676 8,240
16,480
23,843
54,198
0
10,000
20,000
30,000
40,000
50,000
60,000
1 2 3 4 5
We
ll lo
ca
tio
ns
Well locations
included in our
forecast
Potential locations with
base case acreage,
80% risking
Potential locations with
base case acreage,
two zones
Two zones on base
case acreage, plus 20%
risking other acreage
Two zones on base
case acreage, plus 80%
risking other acreage
12
woodmac.com
Americas +1 713 470 1700
Asia Pacific +65 6518 0888
Europe +44 131 243 4477
Wood Mackenzie Client Helpdesk
Contacts
Amanda Kupchella (Houston) T +1 713 470 1918
Maria Cortez (Houston) T +1 713 470 1951
13
woodmac.com
Disclaimer
Strictly Private & Confidential
These materials, including any updates to them, are published by and remain subject to the copyright of the Wood Mackenzie group ("Wood
Mackenzie"), and are made available to clients of Wood Mackenzie under terms agreed between Wood Mackenzie and those clients. The use of
these materials is governed by the terms and conditions of the agreement under which they were provided. The content and conclusions
contained are confidential and may not be disclosed to any other person without Wood Mackenzie's prior written permission. Wood Mackenzie
makes no warranty or representation about the accuracy or completeness of the information and data contained in these materials, which are
provided 'as is'. The opinions expressed in these materials are those of Wood Mackenzie, and nothing contained in them constitutes an offer to
buy or to sell securities, or investment advice. Wood Mackenzie's products do not provide a comprehensive analysis of the financial position or
prospects of any company or entity and nothing in any such product should be taken as comment regarding the value of the securities of any
entity. If, notwithstanding the foregoing, you or any other person relies upon these materials in any way, Wood Mackenzie does not accept, and
hereby disclaims to the extent permitted by law, all liability for any loss and damage suffered arising in connection with such reliance.
Copyright © 2018, Wood Mackenzie Limited. All rights reserved. Wood Mackenzie is a Verisk business.
Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision-makers with unique insight
on the world’s natural resources. We are a leading research and consultancy business for the global energy, power and
renewables, subsurface, chemicals, and metals and mining industries. For more information visit: woodmac.com
WOOD MACKENZIE is a trademark of Wood Mackenzie Limited and is the subject of trademark registrations and/or
applications in the European Community, the USA and other countries around the world.
Europe
Americas
Asia Pacific
Website
+44 131 243 4400
+1 713 470 1600
+65 6518 0800
www.woodmac.com
