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Argentina's Neuquén province approved a 35-year E&P concession sought by local energy company Capex.
Capex will carry out a four-year pilot program requiring US$126mn of investment at the Agua del Cajón shale gas license plus a US$9mn payment to Neuquén province, the firm said in a regulatory filing.
If the pilot phase – which entails the drilling of 35 wells over four years – obtains the desired results, Capex plans to expand the operation to 240 wells with investment reaching US$1.530bn, state news service Télam reported.
With the license, Capex – which has operated Agua del Cajón since 1991 – is targeting the Los Molles shale formation.
"The primary focus of Capex's activity is the production of gas for sale to its own nearby power station," Wood Mackenzie says in a synopsis of a report on Agua del Cajón.