Non-Conventional Hydrocarbon Exploitation Concession
The Government of Río Negro Province has authorized Pan American Energy (PAE), Argentina's largest private oil producer, to transfer 13% of its working interest (WI) in the Loma Guadalosa block, the easternmost frontier of the Vaca Muerta formation, to Continental Resources, the U.S. shale company founded by Harold Hamm. Decree 447/26, published Tuesday in the provincial Official Gazette, formalizes the move.
The decree closes the first chapter of the agreement signed January 5 between PAE and Continental, which committed the U.S. company to take stakes in four unconventional blocks operated by PAE on the Río Negro side of Vaca Muerta. Once the final deed is filed with the Application Authority, the concession will be reconfigured as follows: PAE retains operatorship with 52%; Continental Resources Argentina S.A.U. enters with 13%; and Tango Energy Argentina holds 35%.
Río Negro province, through its hydrocarbon development company EDHIPSA, will continue to receive 2.5% of total hydrocarbons produced in the concession, under the framework of Decree 827/25 — which last September granted Argentina's first Unconventional Hydrocarbons Production Concession (CENCH).
The Math Behind the Swap
The January agreement called for Continental to acquire 20% of PAE's stake in four blocks: Coirón Amargo Sureste, Bandurria Centro, and Aguada Cánepa in Neuquén province, and Loma Guadalosa in Río Negro. The 13% figure in the Río Negro decree is not a change to the original deal but the same transaction expressed on a different base.
PAE controlled 65% of the block, with Tango Energy holding 35%. Transferring 20% of PAE's working interest equals 13 percentage points of the total area: the result of multiplying 65% by 20%. The January announcement reported the share relative to PAE's stake; the provincial decree records the absolute fraction of the total. The final block structure closes at 100%: 52% + 13% + 35%.
In terms of operational control, PAE retains enough equity to hold capex decisions in the consortium committee. The move replicates, on a smaller scale, the capital-sharing pattern that PAE has already committed to with U.S. partners in Bandurria Centro and Coirón Amargo Sureste, the two blocks pending approval in Neuquén province.
From Agreement to First Closing
The Río Negro transfer is the first of four corporate closings from the January agreement. Three provincial approvals are still pending in Neuquén, covering Coirón Amargo Sureste, Bandurria Centro, and Aguada Cánepa. The province led by Governor Rolando Figueroa has not yet issued formal approval, while Río Negro Governor Alberto Weretilneck closed his end in less than four months.
In the interval, Continental built operational position in the basin along two parallel tracks. On March 26, the company formalized its acquisition from Pluspetrol, an Argentine independent oil and gas producer, of Los Toldos I Sur and Pampa de las Yeguas I, its first capital structure as operator in Neuquén territory. On April 2, CEO Doug Lawler confirmed to Bloomberg an increase in Continental's 2026 capital budget, after the company had idled rigs in the Bakken, North Dakota's main shale oil-producing basin, in January with Brent at $59 per barrel. With the benchmark trading above $110 since June, the decision rests on a price environment unrecognizable from the one Continental faced when it stopped drilling in the Bakken.
Whether Continental's escalation in Vaca Muerta sustains itself through the next pricing cycle will depend on factors the data cannot yet resolve — among them the pace of Neuquén's three pending approvals, well-licensing timelines, and the durability of the post-crisis Brent floor.
The strategic ambition was first stated by Hamm himself in January, when he said Vaca Muerta would become Continental Resources' fifth core asset globally. With the Río Negro transfer formalized, the statement is now backed by a participation registered in the Official Gazette.
The Three Consolidated Partners
The Loma Guadalosa concession is the first CENCH granted by Río Negro, with a 35-year term running until August 4, 2060. It covers 101 square kilometers at the eastern edge of the Neuquén Basin, roughly 60 kilometers from the city of Neuquén, and holds estimated unconventional prospective resources of 48.4 MMBOE.
The approved pilot plan calls for an initial $36 million investment, distributed across two horizontal wells with 3,000-meter laterals targeting the Vaca Muerta formation, plus one vertical evaluation well. The operational schedule envisions the first well in 2026, the second in 2027, and a results review in 2028. If the area's potential is confirmed, the massive development phase could scale to 44 additional horizontal wells with a projected investment of more than $1 billion.
The May closing leaves the operating consortium consolidated — PAE as operator, Continental contributing Bakken know-how, and Tango Energy under the leadership of Pablo Iuliano, the former YPF CEO — in time for the spud of the first horizontal before year-end.