The emerging unconventional Vaca Muerta formation in Argentina's Neuquen province is proving to be among the most significant discoveries of the century. With the potential to transform Argentina from a net importer of oil & gas to a net exporter of hydrocarbons, the development of Vaca Muerta production is vital to the nation's economy. International investment experts point to the Vaca Muerta as having the potential to "revolutionize Argentina's debt dynamics, balance of payments and fiscal performance".1 Mander

This study chronicles one operator's development of a concession in the Neuquen basin during 2019. The paper discusses engineering and planning for the geologic and geo-mechanical challenges which characterize the calcareous Vaca Muerta formation. The study also describes the actions taken by the operator to manage the "below surface" risks involved in drilling, completing, and producing horizontal wells in this unique basin.

The operator of this project faced difficult downhole conditions including high pore pressure/frac gradients, casing collapse incidents, circulations losses from natural fracture networks, stuck pipe, increased horizontal stresses caused by tectonic influence, calcite filled stringers, distant water sources, and key service equipment availability challenges.2 Buijs, These "below surface" issues are addressed first in the paper.

Blessed by an abundance of natural resources, a large land mass, and an attractively small population density Argentina is regarded as a near ideal setting for unconventional development. However, as this study points out shale oil & gas projects undertaken in Argentina can find it more difficult than in North America because "other risks" have taken precedence over technical challenges for International Operating Companies (IOC's) and independent oil & gas operators.

This final section of the paper includes a discussion of the headwinds external to the drilling and completion process. The paper uses the term "above surface" risks when describing these challenges. Some examples of above surface risks include lack of needed infrastructure including roads, rail access, and pipelines.

The paper's final section includes comments on how attracting investment capital to develop the Vaca Muerta remains challenging. Additionally, acquiring and developing a "social license to operate" in Argentina is essential and requires local knowledge along with a dose of patience. It is entirely possible smaller, nimbler operators have an advantage over IOC's in this pursuit. With eyes and ears better tuned to local concerns smaller independent Argentine operators are likely to take a leadership position in community involvement.

Most of the lessons learned by this operator and the risks they were able to manage are not unique to Argentina or the Vaca Muerta. Operators in other global shale plays are likely to confront similar challenges when developing unconventional oil & gas resources.

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