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YPF, ENAP Boost Gas Production From Argentina's PIAM Project

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YPF Sociedad Anonima YPF of Argentina along with ENAP of Chile recently announced their intention of increasing the production of natural gas, offshore South America. The project is worth $354 million. 

ENAP is the operator of the Incremental Project Magallanes Area (PIAM), which will ramp up gas production from the existing 2.4 million cubic meters per day to 4 million cubic meters. The project will also boost petroleum production by around 25%. The state-run energy companies engaged five oil platforms in the project, which are located in Argentina’s Santa Cruz province near the Strait of Magellan.

The investment plan was carried out for one and a half years, the peak which created more than 1,000 jobs. Laying new pipelines and modifications of the existing infrastructure were part of the investment plan. To treat the additional natural gas, a new plant with compressors of 9,000 horse power was built by the partnership.

The project is expected to directly address the Argentine demand for gas that increased rapidly since 2014. The production shortage of natural gas started increasing in the country before 2010, forcing more imports from neighbor countries like Bolivia. The project, thus, is in line with President Mauricio Macri’s plan to eliminate dependency on gas imports by 2020-21, which primarily banks on the country’s Vaca Muerta shale.

Price Performance

YPF has lost 15.3% in the past year against 8% growth of its industry.


About the Company

YPF is an international energy company based on the integrated business of hydrocarbons, focalized in Latin America, with high standards of efficiency, profitability and responsibility. They have a dominant position in Argentina's exploration, production, refining and marketing sectors, as well as a growing presence in petrochemicals. Found in 1977, YPF is based in Buenos Aires, Argentina.

Zacks Rank and Stocks to Consider

YPF has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the oil and energy sector are Pioneer Natural Resources Company PXD, EOG Resources, Inc. EOG and Continental Resources, Inc. CLR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Irving, TX-based Pioneer Natural is an independent oil and gas exploration and production company. Its revenues for first-quarter 2018 are anticipated to improve 23.7% from the prior-year quarter. The company came up with an average positive earnings surprise of 66.9% in the trailing four quarters.

Houston, TX-based EOG Resources is an upstream energy player. Its earnings for 2018 are anticipated to skyrocket 282.1% year over year. The company delivered an average positive earnings surprise of 25.7% in the trailing four quarters.

Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are estimated to soar 55.7% from the year-ago quarter’s figure. For 2018, the bottom line is likely to be up 370.6%.

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