Is the Energy Sector in Argentina Und...
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Jonathan Yates
Is the Energy Sector in Argentina Undervalued?

Although the actions of the Government of Argentina have hardly been bullish for investors, the allure of its energy sector has proven to be simply too appealing. CNOOC Limited (NYSE: CEO), the major Chinese oil company, is teaming up with YPF S.A. (NYSE: YPF), the Argentine oil firm, to develop resources in the country.  Americas Petrogas (TSX: BOE), a Canadian oil and natural gas company, just received a very positive independent study for its share resource holdings in the Neuguen Basin of Argentina.

There are other major oil companies operating in Argentina.

Exxon Mobil (NYSE: XOM) is in a venture with Americas Petrogas.  Chevron (NYSE: CVX) recently announced a deal with YPF. BP (NYSE: BP) owns the Cerro Dragon concession in Argentine Patagonia.  The energy assets of Argentina are obviously very appealing to major oil firms.  As Barclay Hambrook, the President and Chief Executive Officer of Americas Petrogas, stated about the recent report on his company’s holdings, “We are delighted with the findings of Ryder Scott’s independent evaluation of the unconventional resource potential across Americas Petrogas’ Neuquén Basin blocks. This evaluation helps highlight the very large upside attributable to Americas Petrogas’ unconventional shale acreage in the Neuquén Basin.”

Investors are also warming up to Argentina again, too, at least in the energy segment of the economy.

YPF S.A. is up more than 40% over the last year of market action.  For 2013, YPF S.A. has jumped by over 16%.  The last month of trading has witnessed another 8% increase in the share price of YPF S.A.


For investors, there are a wide range of options.  Americas Petrogas offers a very appealing play on the energy bounty of Argentina.  So does YPF S.A. Major oil companies such as Exxon Mobil, Chevron, and BP are obviously very involved in the energy sector of the resource rich Latin American country, too.  With the Government of Argentina becoming more hospitable to investors, its energy assets appear to be undervalued, which is obviously very attractive to investors.

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