Asset A&D

Shell Acquires Vista's 10% Interest in the CASO Block in Argentina

By Isha Makkar
June 28, 2021
2 minutes read
Oil & Gas Rig

Royal Dutch Shell Plc has entered into an agreement with Vista Oil & Gas Argentina SAU, a wholly-owned subsidiary of Mexico-based Vista Oil & Gas SAB de CV, to acquire its 10% interest in the JV agreement over the Coiron Amargo Sur Oeste (CASO) block located in the Neuquen basin in Argentina, for a total consideration of US$21.5 million, including cash and certain carry funding commitments related to infrastructure works.

Upon completion, Shell E&P Argentina, a wholly-owned subsidiary of Shell, will hold an increased 90% operated interest in the block, with Argentine provincial oil company Gas y Petroleo del Neuquen SA (GyP) holding the remaining 10%.

The transaction consideration is comprised of an initial cash consideration of US$15 million, and an additional US$6.5 million payable as carry funding for the extension of infrastructure works for the collection and supply of water, which is operated by Shell and supplies Vista’s operations.

The CASO block covers an area of 16,440 gross (14,796 net) acres in Neuquen province. The license expires in 2053, and primarily targets the unconventional Vaca Muerta formation. The pilot phase was completed in 2019, and the block is currently under field development. As of December 31st, 2020, proved (1P) reserves attributable to the block were approximately 1.5 million barrels of oil equivalent (MMboe) net to Vista’s 10% stake, while average net daily production was approximately 94 barrels of oil equivalent per day (boe/d) during 2020.

Listed on the Mexican Stock Exchange (BMV), Vista is focused on the exploration and production of conventional oil & gas assets in Argentina and Mexico, with plans to expand its upstream portfolio across Latin America including Brazil and Colombia. The company was originally formed as a Special Purpose Acquisition Company (SPAC) backed by Riverstone Holdings LLC, and raised a further US$650 million from its initial public offering in August 2017.

The Province of Neuquen has approved the addendum to the JV agreement, reflecting the new working interests in accordance with the transaction. The transaction is expected to close within the next 5 days, with an effective date of April 1st, 2021.

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