In October 2012 Petrel acquired an interest in a large petroleum project in Uruguay. The project comprises two concessions, Piedra Sola and Salto, covering 14,000 sq km (3.5 million acres) which are held under separate production sharing contracts.

Petrel's initial entry was acquired with a US$2.5 million investment for 25% of Schuepbach Energy International LLC (SEI), a private US company, holding the Piedra Sola and Salto concessions and an 85% interest in two prospective gas licences in southern Spain. Petrel exercised an option to increase its SEI shareholding to 51% for US$5.5 million in December 2013. 

In December 2017 Petrel’s partner in SEI failed to fund its share of a cash call. Petrel agreed to not only fund its US$2.04 million 51.0% share but also exercise a US$1 million short term option to increase its SEI interest from 51% to 62.7%.

The Piedra Sola and Salto concessions onshore Uruguay represent an excellent first-mover opportunity for a company of Petrel's size, in an asset with the resource potential normally associated with major oil companies. The project is prospective for both unconventional oil within the shales and conventionally reservoired oil in the underlying and overlying sandstones.
Attractions of the Norte Basin
The Norte Basin in Uruguay forms part of the same oil-producing Devonian basin system which extends into neighbouring Parana Basin in Brazil. It is also productive in Bolivia and Argentina but largely unexplored in Uruguay.
Uruguay is a stable democracy with an excellent working environment, including ready access to oilfield services and equipment from nearby Argentina and Brazil. Uruguay currently imports 40,000 bopd for domestic consumption into the La Teja refinery in Montevideo.

                                                         Core rig, Uruguay

The initial attractions of the Uruguay venture were:

  • Intensive technical work by Dr Martin Schuepbach since 2007 indicated the presence of a previously unknown rift basin which is prospective for unconventional oil hosted in Devonian shales, conventional oil in similar age sandstones and the possibility of hybrid plays akin to the Bakken. Data from shallow coreholes drilled on the basin margin together with evidence from water wells provides anecdotal evidence of hydrocarbons;
  • The two concessions cover a vast 14,000 sq km (3.5 million acres) and are held under separate production sharing contracts with attractive fiscal terms;
  • Uruguay was an emerging target for international energy companies where the government had recently conducted a very successful offshore licensing round with companies such as BP, BG and Total acquiring offshore permits;
  • French major Total had also recently acquired two onshore unconventional concessions to the north of SEI's concessions;
  • Petrel's staged investment allowed for a disciplined assessment of the licences with each stage designed to yield data pertinent to early resource characterisation.
Three-Year work Program
The initial three-year work program for both concessions consisted of a combination of a magnetotelluric (MT) electromagnetic survey, drilling two coreholes and seismic data acquisition.
MT Survey
The magnetotelluric (MT) electromagnetic survey, completed in early 2013, was acquired across the Piedra Sola and Salto concessions with results confirming the existence of a northwest-trending rift basin with Devonian and potential Permian sediments. In addition to basin delineation, the MT survey assisted in identification of corehole locations designed to characterise basic reservoir parameters, resource extent and potential resource size.