Vaca Muerta: A New Era in Global Shale | Enverus

The launch of Enverus Intelligence^® Global Research significantly enhances our ability to deliver comprehensive global upstream opportunities and insights to our customers. Highlighted below is a recent example of our research on the Vaca Muerta, showcasing the attractive shale opportunities beyond North America. This is taken from our webinar comparing the Permian, Montney and Vaca Muerta, click here to watch the webinar now.

An Introduction to the Vaca Muerta

The Vaca Muerta is emerging as Argentina’s standout unconventional play, drawing comparisons to global powerhouses like the Permian Basin in the U.S. and Canada’s Montney Formation. While still in the early stages of development, the Vaca Muerta is distinguished by prolific wells and rapid growth. However, it lags the Permian in the inventory of drillable locations, underscoring the need for further delineation to compete.

The analysis presented here offers a snapshot of its fundamentals, with comprehensive insights available for further exploration.

Argentina’s Vaca Muerta Is Redefining Global Shale Economics

The Vaca Muerta shale play is quietly rewriting the narrative for global shale economics. Positioned south of the equator, it is often likened to the Eagle Ford shale in the U.S. for its geological traits and resource potential. The play’s large areal extent and ultra-thick formation enable multi-zone development.

Unlike the fragmented operator landscape in North America, Argentina’s approach to ownership centralization—managed at the government level—makes operator analysis and data collection far more streamlined. The presence of international independents and domestic Argentinian companies offers a diversified corporate landscape.

Well Productivity Degradation in the Vaca Muerta

Widely regarded as a world-class shale play, the Vaca Muerta averages more than 100 barrels of oil per lateral foot, a productivity rate unmatched globally. For comparison, North America’s productivity leader, the Delaware Basin, averages only 70 barrels per lateral foot, with other U.S. basins registering less than 50 barrels per foot.

Despite its exceptional baseline, productivity in the Vaca Muerta has demonstrated a notable annual decline of 7-12% since 2021. This is largely attributed to operators expanding into less prolific areas and implementing varied spacing strategies. The degradation rate surpasses that of North American analogs and introduces long-term sustainability concerns. Still, the recent addition of pipeline infrastructure should support continued growth, though operators will need to remain vigilant of these trends to mitigate risks.

Promotion: Watch the Great Basin Bake-Off Webinar

In today’s high-stakes M&A environment, choosing where to place your next bet is just as critical as how fast you can make it. And with premium inventory getting harder to find, smart operators are expanding their scope and their upside.

Join Enverus experts Jeb Burleson, Trevor Rix and Andrew McConn for a global inventory showdown, where they’ll put three of the world’s most talked-about plays to the test: the Permian, the Montney and Argentina’s Vaca Muerta. We’ll slice into spacing assumptions, production potential and economics to see which basin has the right ingredients for your next acquisition or investment strategy.

Inventory Mapping

Our inventory analysis, augmented by mapping breakeven economics, suggests that current drilling activity levels could comfortably extend for the next 20 years. Should well density increase, this drilling runway could potentially double. However, the play shows high variability in both productivity and economics, influenced by inherent geological characteristics and operator-driven factors such as spacing techniques. And the rapid growth rate compresses its longevity.

While the Vaca Muerta’s inventory runway is robust, it is not without its challenges. Risks such as productivity degradation, regulatory pressures and potential above-ground issues (e.g., infrastructure gaps or operational challenges) could destabilize long-term projections. These factors underline the need for a measured approach as the play continues to expand.

Vaca Muerta Operators Learn From North American Peers

One of the Vaca Muerta’s success stories lies in its ability to quickly leverage lessons learned from North American shale development. By incorporating the “bigger-is-better” philosophy observed in the U.S., such as larger hydraulic fracks and increased proppant and fluid intensity, operators in Argentina have leapfrogged initial hurdles to achieve scale more efficiently. The widespread adoption of these techniques early on has placed the region on a rapid growth trajectory.

The Vaca Muerta has also shown progress in increasing lateral lengths and improving completion designs, though faster drill speeds remain an area for improvement. Competition among oilfield services providers ensures a dynamic sector that encourages cost efficiency, though the market is still top-heavy with a learning curve ahead for achieving optimal cost reduction.

Significant Above-Ground Events Tied to the Vaca Muerta

Argentina’s political volatility has historically been a deterrent for investors. Yet, in today’s global context where stability is the exception rather than the rule, such concerns are increasingly relative. With North America’s shale inventory dwindling, the Vaca Muerta’s unmatched resource quality and quantity have gained favor, attracting both public and private capital.

Under the Milei administration, Argentina has fostered an environment that encourages energy sector development, sparking confidence in the long-term potential of the Vaca Muerta. While future elections could pose challenges, the play’s substantial economic contributions make dramatic policy shifts unlikely. These factors, coupled with major investments in infrastructure and expanded production capacity, have solidified the region’s standing as a strategically vital energy hub globally.

The Vaca Muerta has moved from being an under-the-radar player to a fundamental part of the global shale conversation. While challenges persist, particularly around productivity and political risk; this resource-rich basin carries the promise to redefine the landscape of unconventional oil and gas. With sustained investment and strategic execution, the Vaca Muerta’s best days are likely still ahead.

The Vaca Muerta is just one of many global opportunities worth exploring. Visit the Global Suite webpage to discover more about our comprehensive intelligence offerings worldwide. Or you can watch our webinar comparing the Permian, Montney and Vaca Muerta to get the full story.

Enverus Intelligence® | Research, Inc. is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts, and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.