Vaca Muerta operator watch

Argentine junior operator Medanito said it incurred losses of more than 15% of its net worth during Q1.

Market relations chief Carlos Marcos Gibson said in a release filed to Argentina’s securities regulator CNV that the company was “analyzing different alternatives,” including selling some strategic assets and seeking new capital contributions, which could benefit the company’s financial structure.

Energy ministry figures show that in Q1 Medanito produced 5.15Mm3 of gas at its most productive Vaca Muerta block, Aguada del Chivato. Next in line was El Molino, with production of 3,718Mm3, and Medianera, with production of 813,000m3.

Aguada del Chivato was also the company’s greatest oil asset, with output of 12,942m3 during Q1, followed by Medianera (3,393m3), Aguada Bocarey (145m3) and Cutral Norte (91m3). Production at blocks Cutral Este, Dos Picos, La Tropilla, Loma Linda and Puesto Roa remained at zero.

BNamericas reported in February that Medanito secured an extension on a previously announced standstill deal with Credit Suisse and other creditors regarding a US$80mn syndicated loan.

More recently, the government of Mendoza province rescinded a concession for its Chañares Herrados block, operated by Medanito-owned Chañares Energía, after which the company is exploring legal options.

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After Phoenix Global Resources, which operates exclusively in Argentina, released its 2018 financial results and outlined plans to complete two Vaca Muerta wells this year, it reached a deal to increase a previous US$235mn loan by an additional US$40mn.

The loan was extended by Mercuria Energy Netherlands, part of Phoenix shareholder Mercuria Group, and will be used to support the exploration and production company's 2019 business plan, according to a release.

Phoenix plans to complete two wells at Mata Mora, which were spudded last year, in a simultaneous hydraulic fracture operation. Their performance will determine whether further wells will be spudded in the Mata Mora block.

At Corralera, the company plans two further horizontal wells to be completed in tandem in the second half of this year.

Last year, Phoenix increased its participation in both blocks from 27% to 90%. Also in 2018, the company completed eight wells at Puesto Rojas, for which it had its concession renewed in April, and said it plans to prioritize the block in 2019.

Energy ministry figures show production at Puesto Rojas, managed by subsidiary El Trébol, yielded 4.7Mm3 of gas and 22,615m3 of oil last year.