The Board of Andes, is pleased to announce the results of a multi stage fracture and production test on the "Las Varillas x-1" well which was drilled in the first half of 2014 and has recently been fracture stimulated, on the "El Manzano West" block in the Neuquen basin, Mendoza Province, Argentina.
Highlights:
The Las Varillas x-1, which in 2014 was drilled and cased to a total depth of 7,851 feet (2,393 metres) and encountered 410 feet (125 metres) of gross pay in the unconventional Vaca Muerta formation, has been stimulated with a three stage vertical hydraulic fracture and tested in early 2015.
After the clean-up of the well and during the initial 48 hour testing period, the well produced through a five inch casing on managed choke sizes (4-16mm) an average rate of 90 bbl/d of 23° API crude oil under natural flow, and following the installation of an artificial lift system the well flowed at an increased rate of 108 bbl/d. The well currently continues in production and a series of mechanical works are being carried out in order to increase productivity.
Las Varillas x-1 well is the fourth successful well targeting the unconventional Vaca Muerta formation in Andes's portfolio, which together with the VG-1 well de-risk the northern extension of the basin, where Andes has 210,000 net acres from a total of 250,000 net acres in the entire basin.
The well was drilled, fracked and tested in a joint venture with YPF (operator), in which Andes has a 40% participation in the production and reserves coming from the Vaca Muerta formation. Andes was fully carried through the drilling, fracturing and testing of the well.
Nicolas Mallo Huergo, Chairman of the Company, commented:
"We are very encouraged with the results of Las Varillas x-1 well, which represents our fourth discovery and test in Vaca Muerta and our second well currently producing from Vaca Muerta, as well as with the consistency of the positive results in all the wells we have drilled across the basin. We believe the future for the development of our acreage in Vaca Muerta is extremely positive."
Summary
Completion and testing operations were conducted by YPF SA as part of a farm-in agreement in which Andes has a 100% working interest in all production from the Agrio formation and a 40% carried interest in production from the other formations, including Vaca Muerta.
As previously announced, the vertical well "Las Varillas x-1" was drilled and cased in February 2014 to a total depth of 7,851 feet (2,393 metres) and encountered 410 feet (125 metres) of gross pay in the unconventional Vaca Muerta formation. A comprehensive analysis of the core sample and electrical logs was performed, defining a prospective zone of 113 metres to be perforated in the Vaca Muerta formation.
The fracturing was designed during 2014 and it was adapted to the fluid and petrophysical properties encountered in the core samples taken during the drilling and subsequently analysed.
The completion operations were conducted on the vertical well involving three clusters of perforation and a multi-stage hydraulic stimulation of three stages with a total of 9,741 sacks of proppant. During a 139 hour clean-up period the well flowed continuously through a five inch casing on managed choke sizes (4-16mm). In the last 24 hours of this period the well flowed at an average gross rate of 350 bbls/d with a water cut of 50%.
After the clean up period was finished, the well flowed at 90 bbls/d of 23° API crude oil under natural flow. An Artificial Lift System was installed, and the flow rate increased to a rate of 108 bbls/d of crude oil. Currently, works are being carried out on the Artificial Lift System order to increase the productivity of the well.
To date Andes has, since 2012, made four discoveries in the Vaca Muerta in four of its six licenses in this play (Mata Mora, Corralera, Vega Grande and El Manzano West).
Supported by the domestic oil price of US$77 bbl in Argentina (set by the National Government in December 2014), Vaca Muerta continues to be developed at a good pace, with approximately 44,000 boepd of production from the basin.
