Argentina’s federal government, for over a decade, has hungrily eyed the vast hydrocarbon potential of the Vaca Muerta (dead cow in Spanish) shale formation in Neuquén Province. It was in 2011 that the Peronist government of Cristina Fernández de Kirchner seized 51% of YPF from Spanish energy major Repsol, provoking a major backlash from financial markets and Big Oil. Despite the considerable negativity surrounding YPF’s nationalization, it was the catalyst that saw the driller emerge as a driving force fo ...

Core Insights - Chevron Corporation aims to increase its oil output in Argentina's Vaca Muerta shale formation to 30,000 barrels per day (bpd) by the end of 2025, reflecting confidence in this significant energy resource [1][2] Company Expansion - Chevron has been investing in Vaca Muerta for years, currently producing approximately 25,000 bpd and planning to ramp up to 30,000 bpd by year-end 2025 [2] - The company’s Argentina country manager highlights the growth potential of Vaca Muerta, emphasizing its strong unconventional resource base and the ability to scale quickly under favorable conditions [2][8] Industry Impacts - Vaca Muerta is recognized as the world's second-largest shale gas reserve and fourth-largest for shale oil, playing a crucial role in Argentina's energy strategy to reduce reliance on imports amid an economic crisis [3][4] - Increased production from Vaca Muerta is expected to enhance Argentina's energy independence and economic prospects, with analysts estimating crude production could reach 1 million bpd by 2030 [4] Market Pressures - Despite its potential, Vaca Muerta faces challenges from global oil market pressures, including lower oil prices and reduced spending, which have led to a slowdown in drilling activities [5] - Other companies, such as TotalEnergies and GeoPark, have scaled back their involvement in the region, indicating a cautious approach to investment in Vaca Muerta [6][7] Regulatory Environment - Chevron emphasizes the need for a stable investment climate in Argentina, calling for competitive costs and predictable regulatory frameworks to support its expansion plans [8][9] - The company’s executives stress that uncertainties in capital movement and government policy could hinder the formation's potential [9] Future Outlook - Chevron's plans for increased output come amid mixed signals for shale development globally, but Vaca Muerta continues to show momentum with ongoing investments [10] - The anticipated Vaca Muerta South pipeline, expected to be operational by 2027, will further support production and export capabilities [10][11]

Corporate Strategy & Assets - Questerre holds strategic interests in Red Leaf for patented oil shale technology and a large oil resource in Utah[2] - The company is assessing a significant oil shale deposit in the Kingdom of Jordan for commercial development[2, 22] - Questerre is seeking value for a giant natural gas discovery in the St Lawrence Lowlands, Quebec[2, 27] - The company has a condensate-rich Montney resource play in Western Alberta with attractive economics and proven tight oil production in SE Saskatchewan/SW Manitoba[2] Financial & Operational Performance (Q2 2025) - Funds Flow from Operations reached $5 million[4] - Capital Expenditures amounted to $1 million[4] - The company reported a Working Capital Surplus of $13.2 million[4] - Production averaged 3,091 boe/d, with 55% weighting towards oil and liquids[4] - Revenue per boe was $48.62, with an Operating Netback of $21.90 per boe[4] Market Capitalization & Share Structure (Aug 31, 2025) - The Market Capitalization stood at $146 million[6] - Insiders held 24,099,804 shares, representing 6% of the total[6] - The Free Float was 404,416,032 shares, accounting for 94% of the total[6] - Daily Trading Volume averaged 1.6 million shares[6] Quebec Legal & Political Challenges - The company is seeking leave to appeal to the Supreme Court of Canada regarding the Quebec Court of Appeal decision on Bill 21[38] - Economic losses related to the Quebec situation are estimated to range between $700 million and $4.8 billion[38]

Core Viewpoint - Questerre Energy Corporation has entered into a definitive agreement to acquire 100% of PX Energy, a privately held shale oil production and refining company in Brazil, which is expected to enhance Questerre's operational capacity and expertise in oil shale resources [1][2]. Acquisition Details - The acquisition involves the purchase of PX Energy for 65 million common shares of Questerre, with a plan to spin out Quebec-based assets into a separate subsidiary to protect existing shareholders [3]. - PX Energy currently produces approximately 4,500 barrels of oil equivalent (boe) per day, with a target to increase production to 6,000 boe per day by August 31, 2026 [3][7]. Financial Aspects - The acquisition includes a performance-based share release structure, with 15 million shares issued upon closing and 50 million shares released in two tranches based on achieving specific Free Cash Flow milestones [6]. - The company has retained Clarksons Securities AS as a financial advisor to manage PX Energy's existing debt, which includes US$80 million in senior secured bonds [5]. Operational Synergies - PX Energy has over thirty years of operational experience using technology developed by Petrobras, which is expected to provide Questerre with a strong operational base and expertise to advance its oil shale and biofuel technology [2][8]. - The acquisition is anticipated to strengthen Questerre's oil shale footprint and support its commitment to environmentally responsible hydrocarbon technologies [8]. Closing Conditions - The completion of the acquisition is subject to several conditions, including satisfactory due diligence, board approval, and regulatory approvals from the Toronto and Oslo Stock Exchanges [4].

Group 1 - OPEC+ aims to increase production not only to punish overproducing allies but also to compete for market share with U.S. shale oil producers, indicating a clear strategy to drive oil prices below $60 [1] - OPEC's market share has decreased from 40% a decade ago to below 25% this year, while the U.S. share has risen from 14% to 20% [1] - U.S. shale oil producers are in a more vulnerable position now compared to a decade ago, with rising costs and production concerns due to the depletion of prime drilling areas [2] Group 2 - U.S. shale oil producers now require an oil price of $65 per barrel to achieve profitable drilling, while Saudi Arabia's production cost is only $3-5 per barrel [2] - Companies like Diamondback Energy have lowered their 2025 production forecasts due to global economic uncertainty and increased OPEC+ supply [2] - The price war initiated by OPEC+ could harm all participants, leading to reduced capital expenditures, layoffs, and dividend cuts for oil companies [3] Group 3 - Countries reliant on oil revenues face fiscal pressures, with Russia needing oil prices above $77 per barrel to balance its budget, and Saudi Arabia requiring over $90 per barrel [3] - Despite the fiscal challenges, Saudi officials believe they can endure a price level of $60 per barrel, even if it means borrowing more to balance the budget [3] - The competition for market share may just be beginning as Brent crude oil prices have fallen from the $70-80 per barrel range last year to nearly $58 per barrel this year [3]

Core Viewpoint - The IEA monthly report indicates that the decline in oil prices is prompting some shale oil producers to cut back on spending and production activity levels [1] Group 1 - The report highlights that lower oil prices are leading to reduced capital expenditures among shale oil companies [1] - It notes that production levels are being adjusted downward in response to the current market conditions [1] - The overall impact of these changes may affect the supply dynamics in the oil market [1]