PentaNova-YPF to develop heavy oil

PentaNova Energy will develop Argentina’s Llancanelo block with a 50% working interest, together with state-owned YPF, the Canadian company announced in a press statement on Monday.

The company has finalised the acquisition of Roch’s 10% stake in the heavy oil area and has completed a farm-in deal for another 11% share, adding to its initial 29% interest.

According to the statement, under the terms of the farm-in agreement, PentaNova and YPF will have up to six months to establish a planning and evaluation scheme for Llancanelo’s development. The objective is to identify enhanced recovery technologies and prepare a drilling campaign that will take place in 2018.

“The decision of YPF, Argentina’s largest energy producer, to deepen its partnership with PentaNova is a significant advancement for our company’s strategic plan to become Latin America’s next significant oil and gas company,” said PentaNova chairman and executive director Serafino Iacono in the company statement.

“We are also pleased that as we develop one of Argentina’s largest heavy oilfields, PentaNova continues to generate revenue and execute plans to reactivate wells on KM8, enabling that field to move back into active development.”

Discovered by YPF in 1937, Llancanelo is located in the Mendoza province. The block currently produces about 1,277 boepd from 13 deviated wells that were drilled in 2016.