Andes Energia reported Monday that its partner, YPF, has spud an exploration well targeting the Vaca Muerta, Chachao and Agrio formations in the El Manzano West block of the Neuquén basin, onshore Argentina. Andes said the new well is located around a mile from the successful Mirador del Valle x-1 discovery that was announced in mid-November. 

This well, which targeted the Neuquén group formation, produced an average flow rate of 535 barrels of oil per day during testing with the potential for 15 million barrels of recoverable oil. The object of the Las Varillas x-1 well is to evaluate the unconventional potential of the Vaca Muerte formation, as well as the conventional potential of the Chachao and Agrio formations, Andes said. 

The well is being drilled by YPF as part of a farm-in agreement with Andes. Andes has a 100-percent working interest in all production from the Agrio formation and a 40-percent carried interest in the other formations. 

Andes CEO Alejandro Jotayan commented in a company statement: "The Manzano West block has already demonstrated significant conventional oil production potential following the drilling of the Mirador del Valle x-1 well in November 2013, which was sourced from the Vaca Muerta formation and has significantly de-risked this well. "The Las Varillas x-1 well will investigate the complete stratigraphic column including the world class source rock Vaca Muerta as the main target, in an area located in the Northwest of the Neuquén basin where Andes has 170,000 net acres nearby. A successful program will provide Andes and YPF with the opportunity to develop a large and promising area with unconventional and conventional resources potential."