Repsol’s Largest Ever Oil Discovery

Monday 12 March 2012, Amsterdam

Repsol’s Largest Ever Oil Discovery; Expected to Strengthen Its Upstream Portfolio

Repsol YPF’s production has been consistently declining since 2007, but the company has attempted to counteract this by beginning aggressive exploration activities, and consequently announced its largest ever oil discovery in southern Argentina in November 2011. The company encountered significant volumes of unconventional resources in the Loma la Lata area in Argentina, and holds rights to explore around 12,000 km2, of which 428 km2 is expected to hold 927 MMboe of reserves. The company has drilled a total of 15 vertical wells, which produced an initial 5,000 boe/d of high quality shale oil during 2011.

Following this discovery, Repsol YPF began exploratory and production activities in an area of 502 km2 in the same Vaca Muerta formation. The company expects a significant potential for large volumes from this new area to be developed in the future.

The discovery of resources in the Loma la Lata area also allowed Repsol YPF to focus its operational model towards unconventional resources. The company’s past operations were more focused towards conventional resource business, but with the addition of the significant reserve found in Argentina to its portfolio, Repsol YPF was able to strengthen its upstream operations.

See figure: Repsol YPF S.A, Reserves Map (Loma la Lata area), 2010

As a result of this discovery, the company was also able to increase its reserve base in 2011. The above figure shows the impact of the discovery on Repsol YPF’s reserves. GlobalData expects that the recent discovery of unconventional resources will allow the company to expand its upstream business, and anticipates that this discovery will support the company’s upstream operations.