YPF YPF Sociedad Anonima

BUENOS AIRES—Argentina's YPF SA and American Energy Partners LP, run by energy industry veteran Aubrey McClendon, signed a deal Thursday to jointly explore and develop unconventional oil and gas projects in the South American nation, the chief executive of the Argentine state-run oil firm said.

The deal, the latest in a series of international joint ventures by YPF, underscores growing global interest in Argentina's Vaca Muerta—or "dead cow"—shale formation, located in the Patagonian Province of Neuqué n.

Drilling in Vaca Muerta has already turned Argentina into the world's top shale producer outside of North America.

YPF expects Mr. McClendon and his engineers to introduce a new, more competitive approach to producing unconventional energy in Argentina.

"We are adding someone with experience that will speed up our learning curve," Miguel Galuccio, YPF's chief executive, said in an interview. "This will introduce a kind of healthy competition that all players will benefit from, as early wildcatters and smaller companies did early on in the development of the U.S. shale industry."

American Energy Partners couldn't immediately be reached for comment.

YPF and American Energy Partners plan to drill more than 20 wells, most of them to horizontally fracture ancient shale rock, according to people familiar with the agreement. They will also build gas-treatment facilities, these people said.

One project entails launching a pilot program in the "Bajada de Añ elo" block, a roughly 55,000-acre area in Vaca Muerta. Another project involves a partnership between YPF, American Energy and two other companies to development shale gas in "Cerro Arena," a nearly 92,000-acre block.

Mr. McClendon formed American Energy in Oklahoma City in 2013 after being ousted as chief executive of Chesapeake Energy Corp., a company he co-founded. Mr. McClendon helped turn Chesapeake into an unconventional oil-and-gas powerhouse. But during his tenure, Chesapeake took on debt that is now threatening the company due to extremely low oil and gas prices.

YPF has already signed multibillion-dollar deals with companies including Chevron Corp. and Malaysia's Petroliam Nasional Bhd, or Petronas. Last month, it reached a $500 million shale-gas deal with Dow Chemical Co.

YPF plans turn over operations to American Energy, representing a departure from YPF's ventures with Chevron, Dow Chemical and Petronas. The thinking is that this would make it easier for Mr. McClendon's team to tap its vast experience in developing shale basins.

American Energy's plans come after it bought more than 55 million acres of land in Australia in hopes of developing oil-and-gas projects there.

YPF and its partners have invested more than $3 billion to develop unconventional oil and gas in Argentina. Agreements are already in place with Chevron and Petronas that could lift that amount to more than $25 billion over the next 15 years.

Write to Taos Turner at taos.turner@wsj.com

(END) Dow Jones Newswires

January 14, 2016 16:45 ET (21:45 GMT)

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