CALGARY — Canadian oil and gas producers operating in Argentina watched their stocks plummet Monday after the South American country announced it was seizing 51 per cent of oil producer YPF SA.
Azabache Energy dropped 24 per cent off its share price to 49 cents, while Madalena Ventures fell the lowest in almost three years, to 61 cents a share Monday.
However, Calgary-based producer Madalena stood its ground while the market continued an exodus from the South American country after President Cristina Fernandez de Kirchner announced her government would take over YPF management.
“For our operations I am not concerned at all,” said Dwayne Warkentin, chief executive. “It hasn’t affected our working interest, royalties, oil price, nothing on an economic basis. What it does do is send up warning flags about investment in the country, which is what I am worried about.”
Warkentin, who has worked in Argentina for more than a decade, said his company continues to reinvest in Argentina, selling its 100-plus barrels of oil to local refineries. More importantly, Madalena Ventures is not a former national oil company, he said.
Argentina holds the third largest shale oil and gas reserves in the world, after the United States and China. YPF, the country’s largest corporation, was privatized in the 1990s, then bought by Spain’s Repsol. It produces about 34 per cent of Argentina’s oil and gas.
Investors had started backing away from Argentina earlier this month when rumblings of nationalization were beginning to be heard in government corridors.