The Board of Andes has successfully completed an intervention operation on the VG x-1 well, testing the Vaca Muerta formation, which is currently producing oil without being stimulated through hydraulic fracturing. The VG x-1 well is located on the Vega Grande oilfield in the Neuquén basin, Mendoza Province, Argentina, and is operated by Andes.
Highlights
· The Vaca Muerta interval in the VG x-1 well is currently producing 80 bbl/d of oil, without a hydraulic fracturing stimulation.
· The VG x-1 well is located in the Vega Grande licence, which is 100% owned and operated by Andes. The licence covers a total area of 72,000 acres and is located in the north of the Vaca Muerta play, close to the La Brea licence (where Vaca Muerta is supposed to have similar geological characteristics), which is also 100% owned and operated by Andes. The two Andes operated licenses combined cover a total area of 105,000 acres, representing approximately 42% of Andes net acreage in Vaca Muerta.
- The operations consisted of an intervention in the existing VG x-1 well (originally drilled in 1984), with a pressure drawdown and buildup tests performed in the interval of 2612 to 2617 meters below ground level of the Vaca Muerta formation, where a total thickness of 66 meters was encountered. The operations were carried out by the Andes technical and operation team using a workover rig recently acquired by the company.
· The Company will perform an extended test installing a sucker rod pump, using existing Andes facilities and infrastructure to evacuate the oil. Depending on the production evolution over the next months and the pressure test interpretation, the Company may decide to do a further stimulation work in order to lift the productivity of the well and analyse the change in productivity behaviour.
Alejandro Jotayan, CEO of the Company, commented: "This production test in Vaca Muerta is a meaningful advance in the development of our shale acreage. We are already producing from shale without needing to frack, reducing costs and the necessary break-even oil price. It de-risks 30% of Andes' net acreage in Vaca Muerta, more than doubling our already de-risked acreage; and is the first Andes operated intervention and production test in Vaca Muerta. We look forward to continuing to develop our acreage in this world class play"
