(WO) — Laredo Oil Inc. has signed a non-binding letter of intent (LOI) with an unnamed Argentine oil operator to evaluate the potential commercial deployment of its Underground Gravity Drainage (UGD) technology at selected oil fields in Argentina.
The agreement marks Laredo’s first potential commercial opportunity for the technology in Argentina, where the company is targeting mature conventional oil fields. UGD is designed to increase recovery from mature reservoirs using gravity drainage and high wellbore density.
Under the LOI, the companies will evaluate selected areas through technical, legal, financial and operational studies, including Front-End Engineering and Design (FEED). If the evaluations are successful, Laredo would finance and deploy the UGD facilities through an Argentine operating entity.
“Argentina has an exceptional inventory of mature conventional oil fields that are ideally suited for UGD, which is designed to recover from mature reservoirs by using gravity and high wellbore density,” Laredo CEO Mark See said. “This LOI gives us a potential pathway toward commercial deployment and creates a foundation for future expansion across Argentina.”
The proposed structure would have Laredo fund agreed project development expenditures and recover its investment from incremental oil production attributed to the UGD deployment. The parties envision a production-sharing agreement if the project advances to definitive agreements.
The LOI is largely non-binding, and any commercial deployment remains subject to additional due diligence, technical and economic evaluation, financing, regulatory approvals and execution of definitive agreements. The agreement includes a 180-day exclusivity period for Laredo’s Argentine partner.
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