KASSEL, Germany, Jan. 8 (UPI) -- German energy company Wintershall said its subsidiary in Argentina ratified a deal with an Argentine counterpart to develop part of the Vaca Muerta shale.
Wintershall Energia said Wednesday it ratified a joint venture agreement with Argentinean company Gas y Petroleo del Neuquen, known also as GyP, for exploration and the possible development of a 37 square mile section of the Vaca Muerta shale reserve area in Argentina's Neuquen province.
Wintershall said both sides will drill as many as six wells as part of a $109 million exploration program for Vaca Muerta.
Martin Bachmann, a board director at Wintershall, said the partnership with GyP anchors his company's position in Argentina.
"It also represents an excellent opportunity to deploy our technical experience in unconventional reservoirs in the promising and fast growing Vaca Muerta shale projects in the Neuquen basin, one of the most prospective shale oil and gas regions in the world," he said in a statement.
The U.S. Energy Department's Energy Information Administration estimates Argentina has 774 trillion cubic feet of technically recoverable shale gas resources, the third most in the world. Oil reserves are estimated at 2.5 billion barrels.
Wintershall's Argentinean subsidiary boasts an annual production rate of 26 million barrels of oil equivalent.