Argentina Energy Assets Profit From The Rebound Following Court Loss

While the energy industry in Argentina is a long way from full recovery, due to the actions of its Government and a recent adverse court ruling, YPF S.A. (NYSE: YPF) and other stocks have begun the rally. This should have investors reacting to how undervalued the energy assets are in the country.

Just last week Americas Petrogas (TBX: BOE), a Canadian oil and gas concern partnered with Exxon Mobil (NYSE: XOM), received a very favorable independent study about its holdings in the Neuguen Basin. According to the independent report by Ryder Scott Company, there are 56.1 billion of oil equivalents that are recoverable with another 8.3 billion potential. About the report, Barclay Hambrook, President and CEO of Americas Petrogas stated:

"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."

As detailed in the video, Americas Petrogas and Exxon Mobil are both very bullish about shale production in Argentina.

From across the other pond, CNOOC (NYSE: CEO), the Chinese oil giant, obviously shares that outlook and is finalizing a deal with YPF S.A. to further develop shale resources in Argentina. According to a Bloomberg piece by Pablo Gonzalez, "Argentina Prepares China Shale Deal to Boost Gas Reserves," CNOOC is nearing "...a definitive deal to explore and develop deposits in the Vaca Muerta formation, either as part of its Bridas Corp. joint venture with the billionaire Bulgheroni brothers or with the Bridas-run Pan American Energy LLC."

After Argentina's recent court loss at the appeals level in New York on $1.5 billion in defaulted debt, the exchange traded fund for the country, Global X FTSE Argentina (NYSE: ARGT), is down almost 3% for the last week of market action. But for 2013, it has risen by almost 8%. The last month of trading lifted it nearly 6%, with the court case reversing the bullish trajectory.

The ARGT is certainly appealing for a full country play on Argentina, as it consists of assets that match the performance of the top twenty companies in the country. For a large cap energy stock, the obvious choice is YPF S.A., which has already rewarded its shareholders with a gain of over 44% for the last year. Americas Petrogas is a small cap with valuable holdings in oil and gas in Argentina too, and noteworthy for investors wanting a position in that group.