YPF chiefs raise output outlook as Vaca Muerta begins to deliver

BUENOS AIRES (Bloomberg) -- YPF SA will produce more oil and gas than originally planned over the next five years as shale output from the Vaca Muerta formation picks up, according to the Argentine producer’s top two executives.

Average growth through 2023 will be as much as 7% a year, Chief Executive Officer Daniel Gonzalez and Chairman Miguel Angel Gutierrez said in a telephone interview from New York. That’s up from 5% forecast last year.

While YPF has been suffering from declining output at mature conventional fields, production will start to bounce back in 2019, and substantial growth will come later as Vaca Muerta accounts for an increasing share of the company’s production, Gonzalez said.

The state-run company produced the equivalent of 544,600 bopd in the second quarter, with about 10% coming from shale fields.

Plans for Vaca Muerta, the nascent Patagonian shale play that’s Argentina’s answer to the Permian basin, include moving test ventures with Schlumberger Ltd. and Malaysia’s Petroliam Nasional Bhd to full production soon.

The executives are scheduled to make a presentation to investors at the New York Stock Exchange at 12:30 p.m. local time.