The Board of Andes Energia, the Latin American energy group, reported the spudding of well YPF.NQ.MMo.x-1 in the Mata Mora block, Argentina.

Mata Mora Block

The Mata Mora block covers 56,339 acres (228 km²) and is located in the eastern region of Argentina's Neuquén basin.

The well is targeted to reach a total depth of 3,185 meters (approximately 10,450 feet) with the Vaca Muerta shale formation, a thick, rich source rock that offers potential for unconventional shale gas and shale oil as the primary target and the conventional overlying horizons of Quintuco formation as the secondary target. This vertical well is expected to provide a significant amount of information relating to the Vaca Muerta formation as a source of shale resources.

The Vaca Muerta formation is one of two principal source rocks in the Neuquén basin in Argentina. The formation is late Jurassic, early Cretaceous in age, covers an area of approximately 7.41 million acres (30,000 km²), varies in depth between 5,500 to 14,000 feet and in places is up to 1,400 feet thick. In published reports, the U.S. Energy Information Administration has estimated a risked, recoverable resource of 240 trillion cubic feet of shale gas from the Vaca Muerta formation in the Neuquén basin.

Drilling operations are being conducted by YPF S.A. (YPF), Andes's partner and operator in the Mata Mora block. YPF is Argentina's largest oil and gas development company.

YPF holds a 63% interest in the Mata Mora block, Kilwer and Ketsal a 13.5% interest, Andes a 13.5% interest and the government entity, Gas y Petróleo del Neuquén a 10% interest.

In order to appraise the regional potential of the Vaca Muerta formation, it is also planned to drill a second exploratory well in the Corralera block in the Neuquén basin.

YPF is leading the development of unconventional resources in the Neuquén basin. Last May YPF uncovered unconventional oil resources of 150 million barrels of oil equivalent in the Loma La Lata block (roughly 40 km east of the Mata Mora block), which is considered to be the largest find in the domestic oil and gas industry since the late 1980's.

Juan Carlos Esteban, CEO of Andes's oil and gas operations commented: "We are pleased to start our drilling program for unconventional resources in the Neuquén basin. The Vaca Muerta formation is the new frontier in exploration in Argentina, and is present in the whole of Mata Mora. Furthermore, this formation crosses other licenses we hold which cover significant acreage."

Tags: Andes Energia