(Zacks Equity Research, 22.Aug.2019) — Equinor ASA recently announced the signing of a deal with the Argentine energy company, YPF Sociedad Anónima YPF, to jointly conduct exploration activities in the CAN 100 Block. The offshore prospect — acquired by YPF Sociedad in May — is located in the North Argentinian Basin.
Per the deal, Equinor will receive a 50% stake in this largest offshore block of Argentina, which will significantly boost the company’s offshore presence in the country. Notably, in the first offshore licensing round conducted this April, the company won five blocks as operators. Moreover, it received stakes in two other blocks, operated by Total S.A. and YPF Sociedad. Markedly, Equinor also has significant renewable assets in the country.
The exploration deal for the 15,000-square-kilometer CAN 100 Block further strengthens the relationship between Equinor and YPF Sociedad, which are already operating jointly in CAN 102 and CAN 114 offshore blocks. The companies are also working together at the Bajo del Toro onshore exploration block, located in the unconventional resource play of Vaca Muerta formation.
Per the company, deals like the latest one enable it to benefit from scale advantage in basins that have high impact potential. Moreover, this agreement can boost the company’s profit level in the Exploration and Production (E&P) International segment. Notably, the unit reported net operating income of $1,402 million in first-half 2019, up from $1,267 million in the comparable year-ago period on the back of higher production.