Bruchou & Funes de Rioja and Martelli Abogados advised Vista Energy Argentina and Petrolera Aconcagua Energía in an innovative two-stage agreement regarding certain conventional assets
Bruchou & Funes de Rioja and Martelli Abogados legally assisted Vista Energy Argentina S.A.U. (“Vista Argentina”) and Petrolera Aconcagua Energía S.A. (“Aconcagua”), respectively, in an innovative agreement in two phases (the “Transaction”) of the conventional exploitation concessions Entre Lomas, Jarilla Quemada, Charco del Palenque, Jagüel de los Machos and 25 de Mayo-Medanito ; of the 25 de Mayo-Medanito crude oil transportation concession and the Entre Lomas and Jarilla Quemada gas transportation concessions (jointly, the “Concessions”), with effective date on March 1, 2023 (the “Effective Date”) .
Under the main terms of the Transaction, as of the Effective Date:
i. Aconcagua will become the operator of the Concessions;
ii. Aconcagua will pay Vista Argentina US$26.48 million in cash (US$10.00 million paid on February 15, 2023; US$10.74 million payable on March 1, 2024; US$5.74 million payable on March 1, 2025);
iii. Vista Argentina will retain 40% of the production of crude oil and natural gas and 100% of the production of liquefied petroleum gas, gasoline and condensates from the Concessions, until the earlier of (a) February 28, 2027 (the “Final Closing Date”) or (b) the date on which Vista Argentina has received cumulative production of 4 million barrels of crude oil and 300 million m3 of natural gas. For its part, Aconcagua will have the right to 60% of the production of crude oil and natural gas from the Concessions.
iv. Aconcagua will pay 100% of the capital expenditures, operating expenses, royalties, taxes and any other cost associated with the Concessions;
v. Vista Argentina will retain the right to explore and develop the Vaca Muerta formation in the Concessions and, likewise, the right to apply for and obtain one or more independent and separate unconventional concessions to develop such resources.
vi. Vista Argentina will continue to be the holder of the Concessions until, at the latest, the Final Closing Date, when the Concessions will be transferred to Aconcagua, subject to provincial approvals.
Vista Argentina is the third largest crude oil producer in Argentina and the second largest shale oil operator in the country, and the Transaction will allow Vista Argentina to fully focus on the development of Vaca Muerta while allowing it to generate higher yields and additional cash flow. For its part, Aconcagua is an upstream operator of the basin with integrated services, focused on conventional production. Through this agreement, it will become one of the 6 largest conventional operators in Argentina.
Legal advice to Vista Energy Argentina:
Bruchou & Funes de Rioja: Partners Santiago Pedro Balbi and Javier Rodriguez Galli. Associates Nicolás Dulce, Franca Stafforini, Macarena Rolon and Sofía Benegas Lynch.
In house counsel: Florencia Hardoy and Rosario Maffrand
Legal advice to Aconcagua:
Martelli Abogados: Partners Bernardo Bertelloni and Hugo Martelli.
In house counsel: Guillermo Bermudez, Eliana Romero and José Luis Bustamente.