Stimulus Program For Investments In Vaca Muerta Gas Production

 
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The Ministry of Energy and Mining published Resolution 46-E/2017, which created a program to stimulate investments in natural gas production projects in the Neuquén Basin's unconventional reservoirs (the "Program").

The Program guarantees the following minimum prices for gas from unconventional reservoirs sold in the domestic market, starting in 2018 for a period of four years:

Year Minimum Price 2018 7.50 USD/MMBTU 2019 7.00 USD/MMBTU 2020 6.50 USD/MMBTU 2021 6.00 USD/MMBTU The difference between the weighted average price effectively received by the producer for its gas sales - produced from conventional or unconventional reservoirs in the Neuquén Basin and sold in the domestic market - and the guaranteed Minimum Price under the Program, will be paid by the Republic of Argentina . The production company included in the Program will receive 88% of the price difference and the remaining 12% will go directly to the province, which awarded the concession. This 12% covers the corresponding royalty on the sale price, which would have been payable to the province which granted the concession, had the subsidized price actually been obtained in the free market.

To participate in the Program, producers must make a request to the Secretariat of Hydrocarbon Resources of the Ministry of Energy and Mining, informing:

the list of concessions...

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