Shale explorer Andes Energia has inked a conditional agreement to merge with Trefoli in an all-share deal to create a new enlarged oil and gas group in Argentina.
Under the terms of the deal, Andes Energia will own 24.62% stake in the combined group which will have five million operated acres and likely to be renamed as Phoenix Global Resources. The remainder 75.38% stake in the group will be owned by Upstream Capital, a subsidiary of Mercuria Energy.
Following the transaction, Mercuria Energy will own close to 78% of the new combined group, after considering its existing stake in Andes Energia.
Mercuria Energy president Daniel Jaeggi said: “Building upon our long-term view on investment in energy in the Americas, we are pleased to announce this next step in our cooperation with Andes Energia.
“We first invested in Andes in 2013, and this brings our relationship to the next level. We look forward to the enlarged group developing and expanding its business in Argentina, notably its significant exposure to the world class Vaca Muerta shale.”
As part of the deal, Andes Energia will merge with Trefoil, the holding company that indirectly owns over 99.99% of Petrolera El Tre´bol (PETSA), Mercuria Energy’s oil and gas exploration and production business in Argentina.
The combination is anticipated to result in a leading independent exploration and production company in Argentina with significant exposure to the Vaca Muerta formation in the Puesto Rojas region.
Andes Energia CEO Anuj Sharma said: “I expect the combination to create a stronger independent exploration and production company, and one of the most attractive Vaca Muerta asset positions in Argentina.
“We have an active work programme of development and exploration drilling which would not only enable us to help deliver attractive growth, by developing the Company’s conventional reserve base, but also take forward our substantial unconventional resources including our position in the Vaca Muerta.”
Phoenix Global Resources is expected to have 10 million licensed gross acres out of which more than 5 million acres are operational.
Put together, the new group is estimated to have a total production of about 11,500 barrels of oil equivalent per day along with total 2P reserves of about 63.0 million barrels, going by the 2016 figures.
The new group will have its corporate head office in London besides maintaining a country head office in Buenos Aires and a regional office in Mendoza in Argentina.