GeoPark to Acquire Vaca Muerta Assets from Pluspetrol for $115M

GeoPark Limited GPRK, an independent oil and gas firm with primary operations across Latin America, announced that it has signed an agreement with Pluspetrol S.A. to acquire the Loma Jarillosa Este and Puesto Silva Oeste blocks in the prolific Vaca Muerta shale in Argentina. Per the terms of the agreement, GeoPark will acquire a 100% working interest and assume operatorship of these blocks. The company is focused on developing the black oil reserves in the Vaca Muerta shale, located in Neuquen Province, Argentina.

Deeds of Agreement with Neuquen Government

Additionally, GeoPark has stated that it has signed two “Actas Acuerdo” or “Deeds of Agreement” with the government of Neuquen Province. The Deeds of Agreement establish the commitments made by both parties to this acquisition, and outline the terms and conditions upon which the transfer of the oil and gas concessions will be made to GPRK. Notably, the Deeds of Agreement specify that the government will issue a new unconventional exploitation license to GeoPark for the Puesto Silva Oeste Block. However, this involves a condition stating that GPRK must transfer a 5% working interest in the block to Gas y Petróleo del Neuquen S.A. (GyP).  Consequently, the upstream player will hold a 95% operated working interest in the Puesto Silva Oeste Block, while GyP will hold 5%.

Reserves Profile, Production and Growth Potential

The deal is expected to strengthen GeoPark’s footprint in the Vaca Muerta shale, a prolific, world-class, unconventional oil and gas play in Latin America. The acquisition provides the company with more than 12,300 gross acres in the black oil window of Vaca Muerta. The acreage is estimated to hold recoverable resources of 60 million gross barrels of oil under long-term concessions of over 30 years. These blocks are currently producing approximately 1,700-2,000 barrels of oil equivalent per day (boe/d). The production from the blocks is anticipated to raise GPRK’s pro forma output to nearly 30,000 boe/d for 2025.

GeoPark also mentioned that it expects to reach plateau production of approximately 20,000 boe/d from these assets by the end of 2028. The acquired blocks hold an estimated 11.4 million barrels of oil equivalent (mmboe) of proved net reserves (1P reserves) and 25.8 mmboe of proved plus probable net reserves (2P reserves). Furthermore, the company estimates the presence of 45.3 mmboe of proved, probable plus possible net reserves (3P reserves), which are expected to provide GPRK with significant financial upside.

Transaction Terms and Financing

The transaction involves a payment of $115 million, which GeoPark plans to finance using its available cash balance. Furthermore, GPRK paid a security deposit of $22.7 million on the day the two companies signed the agreement. The acquisition is expected to conclude before year-end 2025.

Growth Stories in the Vaca Muerta Shale

Chevron Corporation CVX, theU.S. oil and gas major, plans on increasing production from Argentina’s Vaca Muerta to 30,000 barrels per day (bpd) by year-end 2025. The company’s current production from this unconventional shale play in Argentina is approximately 25,000 bpd. CVX believes that Vaca Muerta holds significant growth potential and could quickly scale into one of the most profitable shale assets if the country implements favourable market policies. The Vaca Muerta shale is a crucial asset for Argentina’s energy sector and the country can utilize the shale asset to enhance energy independence and economic improvement.

YPF Sociedad Anónima YPF previously announced that it had earmarked a $3.3 billion investment in Vaca Muerta, providing a significant boost to the Argentinian energy sector. This investment will be primarily used to complete and connect its existing wells rather than drill new ones. The company intends to raise its production from Vaca Muerta to nearly 190,000 bpd. YPF also exports a significant portion of its production volume. At the end of the second quarter, the company exported nearly 44,000 bpd.

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