Chevron Announces 20% Plunge In Vaca Muerta Drilling Costs
Zacks Investment Research | Jun 26, 2016 09:39PM ET
Integrated major Chevron Corporation (NYSE:CVX) reported that cost of drilling wells at Vaca Muerta shale play have plunged by 20% in 2016, thereby enabling it and its partners to better meet their spending objectives.
The costs of drilling at the Loma Campana field in Argentina’s Vaca Muerta – location of the world’s second-biggest shale reserves – declined from $14 million to $11.2 million per well in the last three months of 2015. This, in turn, has pushed the joint venture of Chevron with YPF S.A. (NYSE:YPF) closer to the goal of drilling wells at less than $10 million each.
In 2013, Chevron had entered into an agreement with YPF to invest $1.6 billion in a drilling program at Vaca Muerta in the Neuquen province. Given the success of the program, the agreement was extended by another 35 years in 2014. So far, the joint venture has drilled around 400 wells. The performance of the wells has been impressive and has been compared with those in the U.S. – the nation with the largest shale reserves.
San Ramon, CA-based Chevron is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses.
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