Continental partners with PAE in Vaca Muerta

U.S. oil producer Continental Resources has signed an agreement with Pan American Energy (PAE) to develop four areas in the Vaca Muerta region jointly.

Under the deal, Continental will acquire a 20% stake in PAE’s interests in the Coirón Amargo Sureste, Bandurria Centro, and Aguada Cánepa blocks, located in Neuquén, as well as the Loma Guadalosa block in Río Negro.

PAE will remain the majority partner and operator across all the blocks.

According to a statement from PAE, the closing of the transaction is subject to the approval of the transfer of interests by the provinces of Neuquén and Río Negro.

Pan American Energy Chief Executive Marcos Bulgheroni said Continental—one of the leading independent oil and gas companies in the United States—will contribute its expertise as a non-operating partner to help “unlock the enormous unconventional resources” Argentina holds.

Vaca Muerta, centered in the province of Neuquén, is the world’s second-largest unconventional gas reserve and the fourth-largest unconventional oil reserve, and is currently undergoing accelerating large-scale development.

The vast formation, first explored by Argentina’s state oil company YPF in 2013, has attracted billions of dollars in investment for its development.

“Vaca Muerta is one of the most attractive shale formations in the world, and we are excited to continue investing in Argentina and to strengthen Continental’s position through this agreement with Pan American Energy,” said Doug Lawler, president and chief executive of Continental Resources, which is based in Oklahoma City.