OIL & GAS PROJECTS - Neuquén Basin, Argentina

Brownstone is earning a 25% interest in the Vaca Mahuida Block by spending 50% of the project costs.  Brownstone is presently about halfway through its 3-year earn-in obligation.  Petrolifera Petroleum Limited (PDP:TSX) owns the remaining 75% in the Block.

The Vaca Mahuida Block is located along the northeastern shelf area of the Neuquén Basin situated in west central Argentina in the province of Rio Negro. The Block is 1025 km² (253,000 acres) in size and lies immediately south of the Rinconada Block that is currently being developed by PDP, which company is conducting follow-up drilling to their recent discovery in the Jurassic aged Sierras Blancas Formation (SB).

The Block is currently covered by 540 km² of 3d seismic shot by Chevron in the late 1990’s and 2d seismic of multiple vintages. To date (excluding the joint venture wells) 12 exploration wells have been drilled on the Block, one of which tested 10MMcf/d gas from a thin interval in the Jurassic Loma Montosa Formation (LM). Additionally there have been multiple shows in the SB as well as in the deeper Triassic section and the shallower Cretaceous Centenario Formation.

The current work program proposed to the Rio Negro Government consists of approximately 1,150 km² of 3D seismic and the drilling of 12 exploratory wells. The estimated actual cost of this program is approximately US$20 million. The state’s value in accordance with the work units bid, is valued at US$36 million. If minimum work is not fulfilled, then cash payments are made at this level. 

By the end of 2008, the joint venture completed 3 wells and 1,150 km² 3D seismic.  The wells were mixed with one dry well, one waiting on cement and one with oil (but not tied in).  The joint venture partners plans on completing the 7-well program in early 2010.



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Figure 1

The primary objective on the Block is a combination stratigraphic/structural play within the SB, a play that has conceptually proven to work in area as attested to by the success of PDP in the Rinconada Block to the north (Figure 1). This play is expected to continue into Vaca Mahuida (Figure 2) along the western flank of a large northwest trending basement high (Figure 3) 


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Figure 2 - Stratigraphic section through Rinconada

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Figure 3 - Stratigraphic section through Vaca Mahuida



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Figure 4 - Time Structure on Base Loma Montosa

Additionally, combination stratigraphic/structural-type plays exist in the LM and Centenario which have been proven to be productive on the PDP Puesto Morales Block to the northwest.