Mackie ResearchBill Newman was an early entrant into the South American shale plays. He has been following BOE, MVN, and CVW in the Vaca Muerta shale in Argentina and now also follows CNE and rates it as a Top Pick.
There are several critical mentions that investors must be aware of with these results. First, the MA-
1 well only penetrated the upper ~760 feet of an estimated ~1,300 feet thick La Luna interval (Figure
1). Of the perforated upper La Luna interval, only ~50% was tested as a result of improper
cementing of the well, creating operational limitations. Thus, the test results represent
approximately only 25% of the La Luna formation potential. Future wells will aim to test 100% of
the La Luna formation potential. The MA-1 test flow rates are impressive for a vertical,
unstimulated shale well that only tested a portion of a formation under technical constraints.
Second, the well results are absent of any artificial physical or chemical stimulation procedures. The
results represent flow from natural fractures and organic reservoir pressure only. Note in Figure 2
the highly fractured nature of the shale. The same figure also shows that the deeper Simitri and
Rosablanca intervals have yet to be penetrated, leaving upside potential in future drilling. Also of
note, the lower La Luna formation was also not tested.