Pampa Reaches 35-Year Deal in Sierra Chata Block

Instant Max AI

(Pampa Energía S.A., 10.Jul.2018) – Pampa Energía S.A. announced an Investment Agreement was executed with the Neuquén province, which will grant a new 35-year concession for unconventional hydrocarbon exploitation at the Sierra Chata block (the ‘Block’), aiming at the development of unconventional shale and tight gas in the Vaca Muerta and the Mulichinco formations, respectively.

The Block is located 93 miles northwest of Neuquén city and accounts an area of 213 thousand acres. Currently, the Block produces natural gas from the Mulichinco formation (compact sands or tight gas), with 69 productive wells and 45 million cubic feet of daily net production. Pampa is the operator of the Block and holds 45.6% stake, jointly with Mobil Argentina S.A. and Total Austral S.A. Argentina Branch, with a participation of 51.0% and 3.4%, respectively (the ‘Consortium’).

In consideration for obtaining the new concession, the Consortium committed to make an investment in the Block for an amount of $520 million during the next 5 years (of which Pampa will contribute the corresponding amount according to its share participation), with the objective to continue developing the Mulichinco formation and explore the potential of the Vaca Muerta formation. Moreover, the Consortium disbursed an exploitation bond and a contribution to corporate social responsibility for US$30 million.

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