Argentina's YPF cuts drilling costs; efficiencies push breakeven below $40/bbl

|About: YPF Sociedad Anonima (YPF)|By:, SA News Editor

Argentina's state-run oil company YPF (YPF -0.5%) has cut horizontal drilling costs by more than half to ~$8M per well from $17M and reduced the time required to complete new wells to 15 days from 40 days, Chairman Miguel Gutierrez tells the CERAWeek energy conference.

The efficiencies have pushed break-even prices to below $40/bbl, a significant gain for Argentina as it tries to attract energy investment into the country, particularly into its massive Vaca Muerta formation.

Despite vast reserves and changes to its subsidy program to offer producers $7.5/MMBtu of natural gas produced through 2020 - a figure well above U.S. gas prices - Argentina is short on energy as production has lagged, and Gutierrez says a bump in output is not likely to curb imports in the near term.

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