Tango, Malbec and MicroSeismic in Argentina

By Terry Jbeili
Chief Operating Officer

Last week MicroSeismic (MSI) announced an exclusive partnership with PanAmerican Geophysical Services (PA) for the joint provision of Hydraulic Fracture Monitoring and Completion Evaluation Services in specific geographical areas like Argentina and Canada.  In practical terms this means that MSI will leverage PA’s acquisition capabilities and strengths in those areas to deliver these services.  Similarly, PA will call on MSI for any processing and analysis of microseismic data they acquire.  From our clients’ perspective, we will operate seamlessly, both operationally and commercially and can be reached locally for any required support. Argentina-YPF-officesPanorama of Buenos Aires from 26th Floor of YPF offices

The roll out of the partnership gave me an ideal opportunity to visit Argentina. I met with our clients in Buenos Aires and Neuquen as well as with UGA Seismic, PA’s local company and now our partner in Argentina. I spent a busy week not only attending to business but also enjoying the local cuisine (yes including the fantastic beef and excellent Malbec) as well as the sights (such as tango dancing in the streets of Buenos Aires). Of course a good deal of the time was spent with clients such as YPF, the national oil company, and other operators. There are quite a few companies and the number is steadily increasing as more international interest and investment takes hold.

Vaca-MuertaIn my discussions with these industry experts, my impression of an Argentina poised for growth in the unconventional plays was certainly validated. The potential is significant. Investment in this sector has been somewhat muted in the past due to regulatory, political and fiscal challenges. However, recent events such as YPF’s exploration agreements with Chevron and Petronas as well as the settlement with Repsol point to a future with strong governance and prospects. The country is eagerly awaiting elections that will be taking place next year. The outcome will no doubt affect the investment environment and economy as a whole. The future certainly feels bright.

Much of this potential for growth will come from the big story in terms of unconventional plays - the Vaca Muerta shale (translated literally as the Dead Cow). La Vaca Muerta was discovered in 2011 by YPF. As of mid-2014, 169 wells have been drilled, the majority by YPF. This shale is truly massive - up to 305 m (1,000 ft) in thickness. Its geological properties vary dramatically over the vertical section. Most of the wells drilled to date are vertical but plans include laterals, so a good understanding of frac height growth and optimum landing zones will be essential to optimizing the development. The projected investment for the Vaca Muerta over the next 35 years is estimated at $16 billion, with $9 billion in operating costs to drill and complete 1500 wells for cumulative production of 750 million boe.

The main challenge we as an industry face is to develop the field safely, effectively and efficiently. This means reducing well costs and increasing productivity per well while addressing environmental concerns relating to fracking operations. We (MSI and UGA) are committed to helping our clients address this challenge. Our advanced Hydraulic Fracture Monitoring and Completions Evaluation Services will deliver not only a stage-by-stage diagnosis of the completion treatment, but also provide information to optimize well and stage spacing. Working closely with our clients we will integrate the results with other contextual information to provide detailed analyses on the reservoir potential and performance.

The future is indeed bright!

Terry