(Vista Oil & Gas, 22.Nov.2018) — Vista Oil & Gas, S.A.B. de C.V. announced that, Vista Oil & Gas Argentina S.A. and Apco Oil & Gas S.A.U., subsidiaries of Vista, signed with the Undersecretariat of Energy, Mining and Hydrocarbons of the Province of Neuquén, Argentina, an Investment Agreement Letter (Acta Acuerdo de Inversión) for the sub-division of the Bajada del Palo block, and the granting of one unconventional exploitation concession for Bajada del Palo Oeste block and one unconventional exploitation concession for Bajada del Palo Este block. The two concessions set forth in the Agreement Letter for a term of 35 years, include 12% fixed rate royalties for new shale production and once effective, will replace the conventional exploitation concession over the same filed currently held by the company.
The Agreement Letter, and therefore the unconventional exploitation concessions on the Bajada del Palo Oeste and Bajada del Palo Este blocks, will become effective if and when the Decree of the Governor of the Province of Neuquén approving and ratifying the terms of such Agreement Letter is notified to Vista. Upon the notification of the Decree approving the Agreement Letter, the two non-conventional exploitation concessions will become effective, the conventional exploitation concession currently held by the company over the same filed will be terminated and Vista will assume the commitment to carry out the following investments (i) with respect to the Bajada del Palo Oeste block, with 62,640 acres, drilling eight horizontal wells with a total investment amount of approximately $105,600,000.00 to be made within 18 months from the notification; and (ii) with respect to the Bajada del Palo East block, with 48,850 acres, drilling five horizontal wells, with a total investment amount of approximately $51,800,000.00 to be made within the 36 months counted from of said notification.
In accordance with the Agreement Letter, once it becomes effective and pursuant to the applicable laws, Vista will pay the following concepts to the Province of Neuquén for the unconventional exploitation concessions for both blocks: (i) exploitation bonus for a total of approximately $1,166,926.00, (ii) Infrastructure bonus for a total of approximately $2,796,274.00; and (iii) in terms of Corporate Social Responsibility, an amount of approximately $3,935,000.00.
Likewise, Vista will pay approximately $1,101,800 in concept of stamp tax.
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