Phoenix Global Resources intends to drill into the Agrio shale play in Argentina this year, as companies look to broaden unconventional development beyond the Vaca Muerta.
The UK-based company said it would drill up to eight wells on its Puesto Rojas block, building on an eight-well drilling campaign to test the potential there last year.
“After the successful initial results from our completions campaign at Puesto Rojas, the company now plans to move towards the development of the folded Agrio formation using unconventional vertical wells,” said Phoenix’s CEO Anuj Sharma in a statement.
Like the Vaca Muerta, Agrio is in the Neuquen Basin, but is smaller and has seen little drilling activity. Argentina’s state-run YPF drilled into the play in 2014, but shifted its attention to the Vaca Muerta after seeing strong results on blocks such as Loma Campana, which is currently the biggest in development in the play.
Canada’s Madalena Energy is also looking at the Agrio play, which is located largely in the north of Neuquen and the south of neighbouring Mendoza province. Studies show it contains light crude.
Away from Agrio, there are signs of shale development in other parts of Argentina with two projects launching recently. YPF and Argentina’s Compania General de Combustibles won a licence to explore for shale oil and gas in the southernmost Austral Basin, where they aim to invest US$25 million in a three-year project to test the Palermo Aike shale play. Meanwhile, local firms Pampa Energia and Tecpetrol, two of the country’s biggest energy companies, intend to test the Los Monos shale play in the northern province of Salta.
Other companies are looking at the D-129 and Neocomiano plays in the south, attracted by the lower entry costs compared to the Vaca Muerta, where a surge in output has pushed up the cost of acreage.
Phoenix is also testing the Vaca Muerta. In January, it completed its first horizontal well at the Mata Mora block, and subsequently started drilling a second well in a bid to test the potential of the block.
If the tests prove promising, the company aims to drill up to four more horizontal wells at Mata Mora in the second half of this year.
Sharma indicated that there was potential for development, given recent successes enjoyed by other operators in neighbouring blocks. This is allowing the company to edge closer to determining the production potential of its assets so it can press ahead into the development stage.