By the OGJ Online Staff
HOUSTON, Aug. 9 -- Vintage Petroleum Inc., Tulsa, agreed to acquire producing properties in the Cuyo basin of Argentina from a unit of Royal Dutch/Shell Group for $50.4 million.
Vintage is acquiring Shell C.A.P.S.A.'s 40% nonoperating working interest in two blocks near its existing concessions acquired last year.
The blocks produce 3,000 b/d of 29°-gravity light, sweet oil.
The operator is Repsol-YPF SA. The Spanish-Argentine company is buying production from the blocks.
Vintage officials said that a long-term contract gives their firm 85% of the prevailing New York Mercantile Exchange price for that production.
Vintage said two recent 3D seismic surveys that cover 75% of the block will likely generate additional development drilling activity, waterflood expansion, and optimization opportunities.
CEO S. Craig George said, "To maintain our debt targets, we are offsetting the cost of the acquisition by reducing our 2001 capital budget $40 million to $238 million and increasing our target for non-strategic property sales by $15 million to $50 million."