Large oil find in Argentina boosts Repsol stock

Shares in Repsol stock rocketed on Tuesday following the announcement that its Argentinian affiliate has discovered what is being described as the largest petroleum find in the energy giant's history.

Known as Vaca Muerta (dead cow), the rocky formation stretching across Neuquén and Mendoza provinces could yield as much as four billion barrels of crude, Repsol officials estimate.

Repsol's shares closed at 6.34 percent after remaining by more than 5 percent on the Spanish bourse. In Argentina, Repsol YPF shot up 9.6 percent on the Buenos Aires stock exchange.

According to a press statement released late Monday by the Spanish energy giant and its Argentinian affiliate, company officials calculate that within the 428-square kilometers that have already been explored in a zone commonly known as Loma La Lata there are reserves that could amount to 927 million barrels. So far, 15 wells have been drilled in the area.

The amount is modest compared to what the company expects to tap in the long run. Within the 30,000 square kilometers of Vaca Muerta, Repsol YPF was granted the concession rights to almost half -12,000 square kilometers - of the area, which could yield a total of four billion barrels of oil.

"The recent discoveries are not only going to change our company's profile, but that of Argentina as well," say Repsol sources.

Just a few years ago, Argentina was considered a small oil- producing nation with wells that were said to be close to running on empty. But now, the finds in Neuquén-Mendoza provinces will provide a much-needed transfusion for the Southern Cone country's fledgling energy sector. It had been known for some time that Vaca Muerta could be a great treasure chest for the nation. Last December, President Cristina Fernández de Kirchner announced that a large discovery of non-conventional gas (shale gas) in the area was enough to increase Argentina's reserves within the next six to 16 years.

Since 2008, Repsol has had great success in its oil ventures in neighboring Brazil. The company has been helped by the use of cutting-edge technology. Using a technique called hydraulic fracking, engineers have been able to reach reserves to extract oil and gas. But the method has come under attack by environmentalists and has been banned in several countries