Why Argentina should not kill Vaca Muerta
54 pages, 99 exhibits
Download Link: sendspace.com
On Thursday April 12, Argentina’s President Cristina Kirchner is expected to
meet with provincial governors, and local press has mentioned a possible
definition towards the degree of intervention in YPF. YPF chairman Antonio
Brufau is reportedly in Buenos Aires to negotiate. In light of this, we provide an
in-depth analysis of the shale opportunity in Argentina, a key part of the YPF
investment case and paramount to the country’s energy matrix. At the same
time, we recognise the increasing difficulty to assess the rationale and timing of
decision-making from the governmental authorities pertaining to YPF. Due to
this growing uncertainty, we are downgrading YPF to Neutral, and our new
target price of $30/ADR (from $43/ADR) is an average of various scenarios
that could arise (see page 47).
Vaca Muerta should not die, as it could indeed represent a significant
opportunity for Argentina, the oil companies, and equity investors. From
geology characteristics, recent tangible results, existing infrastructure and
other formations outside Vaca Muerta, we deep-dive into the various aspects
behind this exciting resource base. |
