Energy Interests In Argentina Score Another Win In Court

As detailed in a previous article on this site, a court ruling in August was very bullish for oil and natural gas companies with assets in Argentina. There was more good news on this front as the United States Supreme Court handed another victory to the Argentine energy sector in denying the appeal of the Government of Argentina on October 7.

That action by the Supreme Court upholds the ruling of the Second Circuit which stood by Judge Thomas P. Griesa's of the Southern District of Manhattan's order that Argentina could not pay off some creditors, and not others. Obviously that raises confidence in the investor community about future acquisitions in Argentina. It also restores more of the investor confidence in energy assets that was lost after the Government of Argentina seized control of YPF SA (YPF).

Due to the recent ruling and other actions, that appears to be forgetten by Wall Street as shown by the stock peformance of firms operating in the energy sector of Argentina. YPF SA is up more than 70% over the last year. Over the same period, Petrobas Argentina (PZE) has surged more than 20%. Americas Petrogas (BOE.V), a Canadian oil and natural gas firm with substantial assets in Argentina, is now trading about at a level about twice that of its low for the last 52 weeks; with the stock price appearing to be headed even higher. Global X FTSE Argentina (ARGT), the main exchanged traded fund for Argentina, is up about 15% for 2013.

There is a bullish future for YPF, PZE, Americas Petrogas, and others operating in Argentina. Americas Petrogas received a very positive report on its holdings in Argentina. It also reported higher net revenue and sales volume. Depending on the standard of measure, Argentina is in the top three countries in the world for shale resources.

Those natural resources are now more alluring with another court decision in favor of investors. Due to the actions of the Government, YPF SA fell deeply in value. Along with Petrogas Argentia, it is still recovering. But with the court decision, investors should be rewarded even more by the peroformances of Americas Petrobas, YPF SA, and Petrobras Argentina.