YPF SA, Argentina’s largest company, is monitoring the market to sell debt to fund shale development plans, its chief executive officer said.
The state-controlled oil producer is watching local and international markets for an opportunity to sell debt, CEO Miguel Galuccio told reporters Thursday on the sidelines of an oil and natural gas conference being held at Punta del Este, Uruguay.
“We will go to market when it suits us,” Galuccio said. “We need financing and we are always looking.”
Buenos Aires-based YPF last tapped international markets in February, when it reopened a 2024 bond shelf to sell $500 million of bonds due in 2024 at an 8.95 yield. Today the bonds yield at 8.19, according to prices compiled by Bloomberg. YPF is investing to develop its Vaca Muerta shale and gas field in a bid to reduce Argentina’s reliance on energy imports.
YPF reported an average cost of peso debt in 2014 worth 23 percent and dollar debt at 6.84 percent for year-end total debt of $4.9 billion. Forty-one percent of that debt was denominated in pesos.
The company could announce a memorandum of understanding with a potential new partner during the first half of 2015, Galuccio said. Since being nationalized in April 2012, YPF’s CEO has signed deals with Chevron Corp., Dow Chemical Co. and Malaysia’s state-owned Petroliam Nasional Bhd., or Petronas, to drill in the Vaca Muerta in southern Argentina. YPF said Feb. 27 it plans to drill more horizontal wells this year than it did in 2014.
Galuccio said YPF will be producing all its own sand for hydraulic fracturing by year-end and may be able to supply sand to other companies. YPF said in February it will try to cut costs by ending sand imports from Brazil and China. Sand and water are used to allow oil to flow from rocks as deep as 3,000 meters (9,843 feet).
YPF’s American depositary receipts, which are equivalent to one ordinary share, rose 2.1 percent to $30.42 at 3:36 p.m. in New York. They have climbed 15 percent this year.
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