Overall Assessment of Vaca Muerta Shale in Argentina Claudio Larotonda President & CEO Azabache Energy Inc. 30 October - 1 November 2012, Marriott Plaza Hotel, Buenos Aires, Argentina
Azabache Energy 2-yr 2-yr Price Price Performance Performance Company Company Structure Structure AZABACHE ENERGY Inc. ARGENTA ENERGIA AZABACHE COLOMBIA (Argentina) 99.73% Azabache Energy Inc. May 4 Nationalization…
Neuqun Basin - Vaca Muerta Maturity Analysis Immature Oil Window Gas & Condensate Dry Gas 100 Km Source : ESRI 1994 Modified by Maria Ester Lara, 2012 4
Vaca Muerta Fm. TOC% & Maturity - Cvo.x-2 well TOC (%) vs depth (m) Hydrocarbon windows based in Tmax and Production index GAS OIL IMMATURE 2000 m 6
The Vaca Muerta Game Oil window area 14,776 sqkm 3,649,672 acres Prospective 70 % assumed Net 2,554,770 acres Yield 3,300 bbls/acre Resources 8,431 MMBls Immature Gas & Condensate 100 Km Oil Window Dry Gas Source :…
Exploration & Development Timing Permits per year BARNETT BARNETT AVG VM FORECAST Years 8
Asumptions Oil Price = 75 /BBL Finding & Development Cost = 16 /BBL Lifting Cost = 12 /BBL Learning curve = Economies in place LIFTING CAPEX Years 9
Type Wells BOPD 25% 75% 25% W Y1= 514 BOPD AVG 75% W Y1=310 BOPD AVG Years 10
Production Forecast BOPD/Well Years 11
Cash Flow MM USD INFLOWS 28 B OUTFLOWS Years 12
Tax & Labor Contribution MM USD MUNICIPAL PROVINCIAL FEDERAL TAX LABOR DIRECT LABOR INDIRECT 52 B 111 B 63 B Years 13
Rigs Count RIGS WO COILED TUBING DRILLING Years 14
Labor ( employees) EMPLOYEES FIELD OPERATIONS DRILLING & WO CONSTRUCTION LABOR INDIRECT Years 15
Frac Volumes M3 / TONS Injection Water (M3) Proppant (TONS) Years 16
Sensitivity Analysis Learning curve to get Capex economies (34% ) take 10 years instead of 5 years Profit reduced and delayed 10 years Years 17
Sensitivity Analysis 5% Lower oil price = 71.25 /BBL No capital recovery 18
Azabaches share in the whole game AZA 275 sqkm Oil window acreage 67,925 acres Prospective 80 % Net 54,340 acres Yield 3,300 bbls/acre Resources 179 MMBls BOPD Wells BOPD Years 19
Summary HUGE BENEFITS FOR ARGENTINA High impact resources, may put Argentina at an oil exporter level. Vaca Muerta development may add 4% to Argentina GDP in 10 years. Huge pay back to Argentina : 240 B Tax & Labor during next 40…
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