March 5 (Bloomberg) -- YPF SA, Argentina’s largest shale oil producer, said it signed two contracts for a total of about $1.2 billion to lease 15 drilling rigs to develop the country’s Vaca Muerta shale formation.
The five-year accords adding rigs to the company’s existing 65 were signed with Norwegian Archer Ltd.’s DLS Argentina Ltd. unit, and Helmerich & Payne Inc., the Buenos Aires-based producer said today in an e-mailed statement. Helmerich & Payne, based in Tulsa, Oklahoma, will provide 10 rigs while Hamilton, Bermuda-based Archer will provide the rest. The contracts have an option for a three-year extension, it said.
YPF is pledging to invest $37 billion through 2018 and is seeking partners to develop Vaca Muerta, an area the size of Belgium that contains an estimated 27 billion barrels of shale oil, the world’s fourth-largest deposit. YPF said it has 19 rigs in Vaca Muerta’s Loma Campana area, which it is jointly developing with Chevron Corp.
“We are pleased to announce a growing presence in one of the most promising unconventional plays outside of the U.S.,” Helmerich & Payne Chief Executive Officer John Lindsay said in a separate e-mailed statement. “We believe that our interests are well aligned with those of the customer, and look forward to working with YPF in the near future.”
The first rig is expected to start operating during the fourth quarter of 2014, said Helmerich & Payne, the largest onshore drilling rig contractor in the U.S. The other nine rigs are expected to be deployed sequentially until reaching full capacity by the end of the second quarter of fiscal 2015, the company said.
The Loma Campana area has 130 wells producing 20,000 barrels of oil equivalent a day, YPF said.
Argentina is Latin America’s second most active driller, one rig behind Mexico, according to a Baker Hughes Inc. report published Feb. 11. Argentina’s count rose by 26 units, or 37.7 percent, in the report of active rigs for January.
Rigs in the Latin American region, which accounts for 11 percent of the global total, fell by 16 percent to 401, the report said.
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