The Prospectivity of Unconventional Oil and Gas

Resources in the Vaca Muerta Shale of the Neuqun

Basin of Argentina

Symbol: BOE

Dr. A. Easton Wren

Americas Petrogas Inc.

Toronto Stock Exchange

Forward Looking Statement

Certain statements, table and graphs throughout this presentation may contain forward-looking statements or
forward looking information within the meaning of applicable securities legislation. Forward-looking statements
or information in this presentation include, but are not limited to, statements, tables and graphs (collectively
statements) with respect to: future economic performance; projected production, sales, reserves and growth
estimates for crude oil, natural gas, NGLs and liquids as well as potash, brine and other minerals and mineral
resources; projections made on a per share basis; the Companys ability to achieve its production and sales
guidance; the potential production, scalability and upside associated with resource plays; the potential future
success, growth, timing and production for its various properties; the Companys projections with respect to its
ability to develop resource plays and the percentage of production from resource plays in the future; projections of
the Companys reserves; projected capital costs and risks associated with respect to APIs various regions, assets
and initiatives; projected future drilling costs, non-fuel operation costs, potential dispositions of assets, including
anticipated proceeds there from, the use of such proceeds and the dates for receipt thereof; projections of future
drilling inventories and plans therefore; anticipated currency exchange rates; projected growth rates capable of
being sustained from the Companys asset base in the future; projections of the potential future price and market
for petroleum, natural gas, potash and other minerals; and reference to potential exploration and the timing and
success thereof.
You are cautioned not to place undue reliance on forward-looking information, as there can be no assurance that the
plans, intentions or expectations upon which it is based will occur. By its nature, forward-looking information
involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will
not occur. Although the Company believes that the expectations represented by such forward-looking statements
are reasonable, there can be no assurance that such expectations will prove to be correct. Accordingly, the
Company cautions that events or circumstances could cause actual results to differ materially from those predicted.
Statements relating to reserves or resources or resource potential are deemed to be forward-looking
statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources
and reserves and resource potential described exist in the quantities predicted or estimated, and can be profitably
produced in the future. You are further cautioned not to place undue reliance on forward-looking statements
contained in this web site, which are made as of the date hereof, and except as required by applicable law, the
Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result
of new information, future events or otherwise. The forward-looking statements contained in this presentation are
expressly qualified by this cautionary statement. All oil and gas reserve information is based on the statement of
reserves data and other oil and gas information filed by Americas Petrogas Inc. for the year ended December 31,
2010, a copy which can be found on www.sedar.com

Unconventional Shale Hydrocarbon Potential

The Vaca Muerta and Los Molles Shales are the two principal
source rocks in the Neuquen Basin
They are thick, widely distributed and organically rich; depending on
their depth and maturity they may be gas and/or oil charged and
overpressured
Recent announcements (YPF, Apache) of shale gas and shale oil
discoveries coupled with substantial land acquisitions by major oil
companies (ExxonMobil,Total, Petrobras and others) has the play
well underway
Argentina must currently import natural gas and with the eia
estimate of > 774 tcf (3rd behind China and North America), and with
a suggested gas price up to $7.70/mmbtu for unconventional gas,
the unexploited resource could be the key to economic growth

World Shale Gas Resources: An Initial Assessment

of 14 Regions Outside the United States
April 5, 2011
The resource potential of the Vaca
Muerta Shale in the Neuqun
Basin is estimated at 168
bcf/sq.mi., comparable to that of
the age-equivalent Haynesville
Shale in the United States.
The Vaca Muerta risked shale gas
in-place is 687 tcf, with risked
technically recoverable resources
of 240 tcf.
Resource Estimates for
selected countries in the
Americas

Simplified Cross-Section: Neuqun Basin

Key Source Rocks and selection of Conventional/Unconventional Reservoirs

West

East

Modified from Cruz et al., 2002; Howell,.J et al.,2005

Key Source Rocks

Vaca Muerta and Los Molles Shales

Modified after Howell,J. et al.,2005

Los Molles

Vaca Muerta

Geologic Age

M. Jurassic

Jur-Cret

Area sq.miles

9,730

8,540

Thickness (m)

0 3,300

100-750

Rich (m)

800

500

Net (m)

300

325

Depth Interval (ft)

6,500-15,000

5,500-10,000

Average Depth (ft)

12,500

8,000

Reservoir Pressure

Overpressured

Overpressured

Average TOC Wt.%

1.1%

4.0%

Thermal Maturity Ro

1.5%

1.25%

Clay content

Low/medium

Low/medium

GIP (bcf/sq.mi.)

123

168

Risked GIP (tcf)

478

687

Risked
Recoverable(tcf)

167

240

Legaretta et.al., 1995

Neuqun Basin Structural Elements

Base of the Vaca

Muerta Shale in the
Neuqun Basin
TWT
Shallow

Deep

Regional time structure

seismic map based on
limited information
Courtesy: Victor Linari

Main Structural / Depositional

Elements with Shale Prospectivity
1 Huincul Dorsal

2 Chihuidos High

6
5

3 Picn Leuf Sub Basin

4 Huacalera Low

5 Neuqun Embayment
1
3

6 NE Platform
7 Neuqun Fold Belt
Vaca Muerta source rock is present and prospective for oil
and gas in a large portion of the basin.

On 1 and 2 the shale is shallower but partially or totally

eroded due to the structural uplift
Courtesy: Victor Linari

YPF: Chihuido de la Sierra Negra

1.3

Vaca Muerta shale oil discovery: in production

test

0.6

YPF: Bajada de Aelo, Bandurria & Loma

Campana

0.0

SHALE OIL 2010/11 EXPLORATION &

DEVELOPMENT
3 new wells drilled to date
BA.x-1 (Bajada de Aelo) in Bajada de Aelo
block tested 40 m3/d of oil from Vaca Muerta with 5
frac clusters

APACHE & MADALENA: Cortadera

Drilled CorS.x-1 (Cortadera Sur), vertical
exploration well to Vaca Muerta; waiting on
completion.

2.0
ROCH : Coirn Amargo
CAS.x-1 (Coirn Amargo Sur) 3 months production
from Vaca Muerta, flowing @ 4 m3/d (25 bbl/d) after
only an acid job, no frac.

APACHE & AMERICAS PETROGAS:

Huacalera
Hua.x-1 (Huacalera), vertical exploration well
to Vaca Muerta; waiting on completion.

YPF: Loma La Lata

SHALE OIL 2010/11 EXPLORATION &
DEVELOPMENT
7 new wells (6 vertical, 1 500-m length horizontal)
drilled to date, plus 3 deepenings and 1 reentry
3 to 5 fracs per well
IP: 200 to 560 bls/d (average first month)
Area to develop: 330 Km2
Technically Recoverable Resources: 150 MMbls
2011 Plan: 17 new wells, 14 workovers (to be
fractured); Total Investment: 270 MMU$S (100
MMU$S invested)

APACHE: Anticlinal Campamento

ACO.xp-2001(h): First multifractured (10 fracs)
horizontal well drilled in Latin America.
Producing from Los Molles shales; IP: 4.5
mmcfd

560

200

240

4093

0.0

Km

30

216

Monday November 7 YPF announced 927 mmbbl

2.0 of shale oil resources from the Vaca Muerta in
Loma La Lata from 15 wells

Loma La Lata
337

IPs in BOEPD

Unconventional Plays:
Neuqun's Potential
Shale Comparisons
Haynesville
Lithology

Barnett

Marcellus

Siliceous Marl Siliceous Shale Siliceous Shale

Average Mature TOC(%)

Woodford Vaca Muerta Horn River Eagle Ford

Chert

Siliceous Marl

Chert

Calcareous Shale

3 to 4%

4 to 5%

4 to 7%

4 to 8%

3 to 5%

3 to 6%

4 to 8%

Net Thickness (Ft)

225 to 300

150 to 250

75 to 150

75 to 150

300 to 1300

125 to 450

120 to 280

Maturity (Ro)

1.7 to 2.8

1.3 to 2.1

1.3 to 2.4

1.2 to 2.8

1.4 to 1.8

1.6 to 2.7

0.7 to 1.8

9.6 to 10.6

11.6 to 13.5

9.6 to 10.6

9.4 to 17.3

10.6 to 13.5

9.6 to 14.5

7 to 9%

4 to 8%

7 to 9%

5 to 6%

7 to 12%

4 to 10%

4 to 10%

100 to 500

50 to 200

100 to 200

40 to 70

50 to 200

100 to 1000

100 to 1500

8 to 25

3 to 7

4 to 10

2 to 6

2 to 12

5 to 8

2 to 17

GIP*/Sq Mi (bcf)

150 to 250

100 to 150

75 to 125

75 to 150

300 to 800 (bcf)

175 to 250

80 to 250

EUR**/Well (bcf)

8 to 12

3 to 4.5

3 to 6

2.5 to 5

8 to 20

4 to 10

2 to 6

Pressure Gradient (ppg) 13.5 to 17.3

Porosity (%)
Permeability (nD)
Well IP (mcfd peak month)

* Gas in place
** Estimated Ultimate Recovery

All different with no clear analogs

Companies with
Recent Land
Acquisitions in the
Shale Fairway
API has 1.28
million net
acres along
the northsouth trending
shale corridor

Shale Compositional Characteristics Comparison

Comparison

The Horn River, Barnett,

Haynesville and Bakken
appear to be Vaca
Muerta analogs

NuTech analysis of Barnett and Vaca Muerta shale sections in wells in API blocks.
The similarity of extensive, continuous permeability and silica is compelling

Barnett

Los Toldos

Silica
Clay
Calcite
Permeability
Hydrocarbon

Los Toldos

Los Toldos

0
feet
0

Relative Maximum Thickness

Vaca Muerta

Barnett

Haynesville

Marcellus

Eagle Ford

Horn River

500

1000

Vaca
Muerta

Barnett

Haynesville

Marcellus

Eagle Ford

Horn River

2350

500

350

300

220

600

Estimates of Maximum Thickness (feet)

1500

Note: Net and gross thicknesses of the

shales vary with different published sources
2000

Estimation Comparison: Gas

Apache Corporation estimates 150+ bcf/section

ultimate recovery for the Vaca Muerta shale gas in its
drilled and tested Neuqun Basin properties
(Apache Corporation, May 17, 2011 Investor Day Presentation, p.6)

Apache: Vaca Muerta

Talisman: Montney

150 bcf/section

128 bcf/section

11.7 tcf for 50,000 acres

10 tcf for 50,000 acres

*Talisman Energy Presentation September 1,2011, p.13

One of the richest properties so far reported in North America

Estimation Comparison: Oil

Repsol YPF estimates 43 million barrels of Oil

In Place per square kilometre for its Neuqun
Shale Oil Property based on an average Vaca
Muerta Shale thickness of 200 metres
(Repsol 2Q Presentation, Mr. Miguel Martinez, July 28, 2011, p17)

Repsol Vaca Muerta

Eagle Ford

200 metre thickness

70 metre thickness

43 million bbl. in place /sq.km 23 million bbl. in place /sq.km

Risked Resource Estimates

18

Challenges and Technologies

This is a very early stage in the exploration of the Vaca Muerta
The shale has a long depositional history with variable mineralogy
composition and reservoir characteristics
There is limited published information in terms of some of the key
parameters:

porosity, permeability, brittleness, natural fractures, sweet spots, and

gas/oil in place/recoverable
The Vaca Muerta is so thick that completed vertical wells may turn out to be
preferable to horizontals
A critical element relates to gas and oil pricing scenarios and monetization
of the resource; moving resources to reserves
Rapidly developing drilling and completion technologies will be available to
accelerate the advancement of the play
The North American Learning Curve will increase efficiency and reduce
costs

Iguazu Falls, Argentina

Non-conventional oil reservoirs in the Neuqun Basin are

superior to the United States
Toms Garcia Blanco, Director E & P, YPF, October 17, 2011
Source: Platt
Symbol: BOE
Acknowledgements: Victor Linari, Gustavo Diez, Marcelo Santiago:

Toronto Stock Exchange

Thank you for your attention!!