Continental Resources, Mercuria envision equal partnership JV to boost Vaca Muerta oil production
Continental Resources Inc., Oklahoma City, Okla., aims to increase its presence in the Vaca Muerta formation in Argentina. The company signed a heads of agreement (HoA) with Mercuria Energy Group, majority owner of Phoenix Global Resources, outlining a proposed deal that would see it acquire a 50% interest in Phoenix.
Phoenix Global Resources is currently the sixth largest crude oil producer in the Vaca Muerta, with core operations concentrated in the Neuquén and Río Negro provinces. The private company in five years has grown net production to 25,000 b/d from zero, with only 15% of its acreage developed.
In a release Aug. 20, Mercuria said a planned partnership with Continental Resources—and some $4 billion in capital investment over the next 5 years—are part of a larger plan to grow Phoenix's production to over 100,000 boe/d from its current 28,000 boe/d.
The HoA envisages a joint venture operating company held 50-50 by Mercuria and Continental holding about 163,000 net acres across six blocks in Vaca Muerta, bringing together Phoenix's interests in Mata Mora Norte, Mata Mora Sur, Confluencia Norte, and Confluencia Sur, Continental's operated interest in Los Toldos II Oeste, and additional interests being acquired from Bajo del Toro Este block currently owned by Integra.
The companies anticipate the combined portfolio to qualify under Argentina's Large Investment Incentive Regime (RIGI), a governmental framework designed to provide 20 years of fiscal, foreign-exchange, and regulatory stability for large-scale developments.
"The reforms led by President Milei and his administration generated our interest in Argentina and strengthened our confidence in its future,” said Doug Lawler, president and chief executive officer, Continental Resources.
“Vaca Muerta is a world-class resource, and we believe the combination of Argentina's tremendous potential, Phoenix's established capabilities and Continental's unconventional development expertise can help further establish the country as a global oil and natural gas leader,” he continued.
Late last year, Continental Resources marked its first operational role outside the US through a deal to acquire a 90% operating stake in the Los Toldos II Oeste block from Pluspetrol, and began a process to register its local subsidiary, Continental Resources Argentina SAU, as part of its entry into Argentina.
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Mikaila Adams
Managing Editor, Content Strategist
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.