The Board of Andes is pleased to announce a light oil discovery in the Mirador del Valle x-1 exploration well on the El Manzano West block in the Neuquen basin, South Mendoza Province.
Mirador del Valle x-1 light oil discovery
A joint Venture between Andes and YPF (Andes has a 100% working interest in the Agrio formation and a 40% carried interest in the other formations in the El Manzano West block) has successfully drilled and tested the Mirador del Valle x-1 exploration well (MdV x-1) with outstanding results. The well reached a depth of 1,789 meters and was tested, producing at an average rate of 535 bopd of light oil by natural flow. The reservoir target was the Neuquen Group, which is present in most of the block (which has a total surface of 265 km2). The MdV x-1 well was drilled into a geological structure of approximately 6 km2. After drilling the well a comprehensive set of electrical logs were evaluated and a well testing program was determined. The completion rig started the testing program on 23 October and several oil reservoirs of the Neuquen group were tested successfully.
Initial evaluations determined a potential of 15 million barrels of recoverable resource and appraisal wells will be needed to determine oil/water contact level and proven reserves volume. Preliminary studies indicate high net-back economics. Furthermore, Andes's studies indicate the possibility of other similar structures in the block.
The Neuquen Group was under explored in this area. Modern seismic techniques together with complex geological modelling were used to identify prospective areas. The block is operated by Andes in the Agrio formation, and operated by YPF in the other formations. The MdV x-1 well was drilled by YPF, as part of the farm-in agreement to the "El Manzano West" block. As part of this agreement, a further well is planned to be drilled through the Neuquen Group formation and to reach and frack the shale oil Vaca Muerta formation. Andes is 100% carried through this well. In this area, the Vaca Muerta formation lies just one thousand meters below the Neuquen Group formation and it is the source rock from which the oil has migrated to the Neuquen Group formation.
The rights to exploit the block have been granted up to 2027. Before the drilling of the MdV x-1 well, Andes was producing 100 bopd from the Manzano West block, from the Agrio formation with a 100% working interest. Following the successful drilling of the MdV x-1 well, Andes will add estimated further initial net production of 214 bopd in respect of its 40% carried interest.
Alejandro Jotayan, CEO of the Company, commented: "The Mirador del Valle x-1 discovery opens a very profitable conventional play in the block in the South Mendoza Province, where Andes has the second largest acreage position. El Manzano West and Chachahuen are the most recent conventional discoveries in Argentina and Andes is very proud to partner with YPF in the development of both blocks, as well as for the exploration well planned to test the shale oil potential of El Manzano West in the near future, where we are fully carried.".
