Apache to tap Argentina unconventional gas

Argentina’s secretary of energy has approved the first contract under an incentive program to encourage development of unconventional natural gas reservoirs.

Alan Petzet
OGJ Chief Editor-Exploration

HOUSTON, Oct. 7 -- Argentina’s secretary of energy has approved the first contract under an incentive program to encourage development of unconventional natural gas reservoirs.

Under the contract, Apache Corp., Houston, will drill as many as 48 wells in two Neuquen basin fields in the next 4 years and supply 50 MMcfd of gas at a price of $5/MMbtu. The contracts take effect in January 2011, but the power plant customer has indicated it may begin taking gas in mid-2010.

The expected reserves would not be developed without Argentina’s Gas Plus program, said Jon Graham, president of Apache Argentina. Apache has submitted five more development projects in the same basin with different geological parameters for approval under Gas Plus.

At Anticlinal Campamento field in Neuquen Province, Apache will drill as many as 12 wells to tap dry gas in Jurassic Pre-Cuyo fractured volcanics and basement reservoirs as deep as 10,500 ft. Apache describes the reservoirs as unconventional and said it will apply multiple hydraulic fracs in the highly deviated lower part of the wells.

Meanwhile, Apache will drill as many as 36 wells in Estacion Fernandez Oro field in Rio Negro Province. These wells involve drilling to 12,500 ft true vertical depth with as much as 20° of deviation and conducting multiple fracs in tight Jurassic Lower Lajas sandstone. Expected recovery is rich gas and 50° gravity condensate.

Apache will provide measurement and production facilities for the Gas Plus volumes separate from the rest of the fields’ production facilities.

Apache produced 193 MMcfd of gas in Argentina at an average $1.89/Mcf in the quarter ended June 30. That included sales to regulated residential and power generation markets and deregulated industrial markets. Regulators recently approved price increases in the residential and power generation sectors, Apache said.

Contact Alan Petzet at alanp@ogjonline.com.

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