Calgary-based Americas Petrogas (TSX-V:BOE) said Thursday it is conducting intensive studies on its western region blocks in the Neuquen basin in Argentina to assess the potential for uncoventional shale oil and gas plays.
Recently, major oil and gas companies have taken notice of the western region of the Neuquen basin, as unconventional plays, though riskier, involve higher pay offs. Many of these majors have been granted exploration concessions around Americas Petrogas' western region blocks, such as Huacalera, Los Toldos I, II, III and IV blocks and the Loma Ranqueles block.
At Los Toldos II, the company has drilled three consecutive medium depth exploration wells, which all had oil and gas shows in several zones and were cased, said Americas.
The La Flecha well, LF.x-1, produced 90 bopd and 155 bopd in short term tests from two zones in a shallow formation, but subsequent tests showed substantial decline. These results are currently undergoing a technical review to determine if any future corrective measures can be taken, the company added.
At its Medanito Sur block also in Argentina, the company said today it drilled a sixth well, MS.s-1, which was originally licensed as a water disposal well, but Americas has decided to convert it to a productive well based on hydrocarbon shows and log responses. The EP.x-1 well, with its high water-cut, will now become the disposal well. This could mean a possible increase in daily production, as well as a reduction in water disposal costs.
Immediately south to Medanito Sur is the company's Rinconada Norte block, where Americas intends to drill three wells in the first half of next year. In so doing, the company expects to increase its probability of finding oil in targets similar to those in Medanito Sur, it said. Medanito Sur and Rinconada Norte together total 49,700 acres or 78 sections of land.
Americas Petrogas has oil and gas interests in 16 blocks involving exploration, development and production. The company was down 11% on Thursday, trading at $1.2 as of 11:14am EST.