Andes Energia, the oil and gas, electricity distribution and hydro-electric power company in Argentina, reports the successful conclusion of a farm-in agreement with YPF S.A. ('YPF'), Argentina's largest oil and gas company and part of the Repsol group in Spain, for the Confluencia, San Bernardo, Sierra Cuadrada, Buen Pasto, Rio Senguerr and Pampa Salamanca Norte blocks in the province of Chubut. The agreement is subject to the formalisation of new UTEs. Following completion, Andes will hold a 28% carried interest in the blocks and is also entitled to a 2% share of YPF's interest in net production. Under the agreement, YPF will fund exploration work program commitments up to the stage of commercial discovery. Furthermore, YPF will further fund the first US$12 million of Andes's share of production costs following a declaration of commerciality.

Juan Carlos Esteban, CEO of Andes Oil and Gas commented, 'We are delighted to have secured a second agreement with YPF, following the previous one in respect of our Neuquen licences. We have conducted a significant amount of work on these blocks and we are particularly pleased, based on the results of this work, that YPF has recognised the development potential in these blocks by entering into this second agreement with us. This relationship with YPF will help us to develop these six areas and catch up with our original development plans. This agreement further consolidates our relationship with YPF, the largest oil and gas development company in Argentina.'

Tags: Andes Energia