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The Vaca Muerta Comes of Age


For many years, my favorite thing from Argentina was a fossil I found near Tucunuco in 1986 while doing geologic field work. We were jouncing across the desert in a mid-1950s Jeep affectionately named La Tortuga, when I glanced down at the passing rocks and happened to notice a nice ammonite (Figure 1) in a small block of limestone — what luck! But my new favorite thing might just be the up-and-coming unconventional oil and gas play that has blossomed 600 miles south of my fossil find: the Vaca Muerta.

Photo of Argentine Ammonite Fossil

Figure 1 | Argentine Ammonite Fossil (Photo by Patrick Rutty)

Why would I be so fond of a relatively new unconventional play with just fewer than a thousand wells drilled so far? The simple answer? It’s the real deal, in the sense that it competes with the top North American shale plays in both productivity and economics. Production in the play has increased six-fold from 2016 to ~413 Mboe/d today and the average oil EUR for a 2018+ horizontal Vaca Muerta well is about 100 Mbbl/1,000 feet, placing it well on the high end when compared to top U.S. shale plays (Figure 2). Historically, well costs have been one of the play’s biggest headwinds, with average drill and complete costs coming in above $10 million per well, but recently operators have been able to curve costs downwards, placing half-cycle breakevens as low as $36/bbl WTI.

FIGURE 2 | Vaca Muerta Oil — Weighted Type Curve Versus U.S. Shale Plays

Figure 2 | Vaca Muerta Oil — Weighted Type Curve Versus U.S. Shale Plays (Source: Enverus; Note: 2018+ vintage wells, >40% WH Liquids)

With many super majors (TTE, RDSA, XOM and CVX) participating in the play, either directly or through non-operated assets, and a number of smaller pure-play operators (YPF, PAE, VIST and Wintershall), Enverus anticipates activity levels within the play to keep climbing. YPF, the Argentine NOC, planned to spend $1.5 billion in 2021, PAE is investing ~$150 million in infrastructure through mid-2023 and RDSA intends to spend $1 billion to drill 100 wells through 2022.

Perhaps the most exciting part of the Vaca Muerta story is that the play is well positioned to benefit from data-driven optimization using U.S. analogues; applying the hard lessons learned regarding completions, spacing and parent-child wells from U.S. plays to develop the Vaca Muerta in the most optimized way possible (Figure 3 and 4). Enverus’ industry leading analysis and tools for U.S. unconventional plays, whether it’s multivariate analysis or machine learning algorithms, can amplify available data and guide technical teams of engineers and geologists to an understanding of what works where, and why.

Other unconventional plays in Abu Dhabi, Australia, China, Russia, and Saudi Arabia have gained momentum in the last few years. Using the Vaca Muerta as a playbook, world-class operators can stand to reap the most in terms of capital efficiency, production and economic returns. But it won’t be by luck, like when I found my ammonite, but by properly leveraging Enverus’ data analytics tools and expertise.

FIGURE 3: Cross Plot of Williston Basin EURs Versus Spacing

Figure 3 | Cross Plot of Williston Basin EURs Versus Spacing (Source: Enverus)


Figure 4: Multivariate Analysis Quantifying Relative Contribution to EUR Versus Spacing for Different Reservoir Qualities

Figure 4 | Multivariate Analysis Quantifying Relative Contribution to EUR Versus Spacing for Different Reservoir Qualities (Source: Enverus)

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Patrick Rutty

Patrick is Director – Global Research at Enverus, where he previously held positions in Sales, Technical Sales & Consulting, and Product Management. Before joining Enverus, he spent 26 years working with large and small E&P companies as a member of exploration teams focused on basins in North America, Saudi Arabia, and central Europe, in roles from prospect generation and exploration management to business development and executive leadership. Patrick holds an A.B. in Earth Sciences from Dartmouth College and an M.S. in Exploration and Development Geophysics from Stanford University.

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