Aubrey McLendon, who helped establish Chesapeake Energy as a U.S. shale leader, signs a cooperative agreement to develop one of the leading shale basins in Argentina. Photo courtesy of American Energy Partners.
BUENOS AIRES, Jan. 15 (UPI) -- American Energy Partners, led by former Chesapeake Energy CEO Aubrey McClendon, said it would bring U.S.-style shale momentum to Argentina.
McLendon, now chief executive officer at American Energy Partners, signed a deal with Miguel Galuccio, his counterpart at Argentinean energy company YPF, to help develop the Vaca Muerta shale basin.
"Through our partnership with YPF, we intend to bring US style shale drilling and operating expertise, completion techniques and cost structure to the Vaca Muerta," McLendon said in a statement.
Vaca Muerta, located in Neuquen province, is considered one of the best shale basins in Latin America. Analysis from late 2014 by consultant group Wood Mackenzie found parts of the basin are producing on average 646 barrels of oil equivalent per day, representing a mix of oil and natural gas.
Both companies said they presented development details to the Argentinean government that outline investments of more than $500 million during the next three years. The first stage of operations should be completed by 2018.
McClendon helped establish Chesapeake as a shale pioneer before he was ousted through an investor rebellion in 2013. Under his tenure, the company became one of the largest natural gas producers in the United States.
"We believe that this partnership will be very enriching for our company by allowing YPF to accelerate the learning curve," YPF's Galuccio said.
McClendon's partnership may draw in more foreign capital to Argentinean shale basins. Russian energy companies have already signed agreements with YPF.
The study from Wood Mackenzie found production increases will be slow, but year-on-year expansion expected at around 10 percent through 2016. Advances should accelerate by 2020.