Statoil ASA has agreed to partner with YPF SA to explore the promising Vaca Muerta shale formation in the Neuquen Basin onshore Argentina.

YPF, headquartered in Argentina, and Norway’s Statoil plan to explore about 38,800 acres within the Bajo del Toro play of the Vaca Muerta, a geological formation that has attracted prospectors from around the world.

Neuquen province, in the western part of the country at the northern end of Patagonia, is considered Argentina’s most prolific hydrocarbon basin. The U.S. Energy Information Administration (EIA) has estimated that the Vaca Muerta contains 308 Tcf of shale gas and 16.2 bbl of tight oil.

“This is a light oil exploration project in a world-class unconventional resource play, the Vaca Muerta formation,” said Statoil’s exploration chief Tim Dodson. “The opportunity has an excellent fit with Statoil’s sharpened strategy, and is in line with our exploration strategy of delivering profitable, high-quality resources.”

Last year, Statoil signed a technical study agreement with YPF to map exploration opportunities in a large area of the continental slope offshore Argentina. The preliminary exploration agreement signed Thursday would give Statoil a 50% participating interest, with operator YPF retaining a half-stake.

Statoil plans to fund 100% of the costs of future activities in the block and help defray some of YPF’s past costs. No financial details were disclosed.

“Bringing in a new international player like Statoil into the country shows confidence in Vaca Muerta as a promising shale play and in YPF as a leading operator,” said YPF Chairman Miguel Angel Gutierrez.

In 2013, the EIA reported that Argentina may have the most prospective shale oil and gas outside of North America. The Neuquen Basin may hold “about as much shale resource as every other South American country combined,” with similar characteristics as the Eagle Ford Shale, according to Raymond James & Associates Inc.

Among the Big Oil companies that are poking around the shale play is Chevron Corp., which working with partners has been a leader in developing the formation. An ExxonMobil Corp. subsidiary in 2011 began a farm-out agreement with a subsidiary of Canada-based Americas Petrogas to explore an estimated 163,500 acres in the Los Toldos blocks in Neuquen. China’s CNOOC Ltd. and Bridas Energy Holdings Ltd. are also working in the play.

The Vaca Muerta isn’t the only potential producing formation in the Neuquen Basin. In fact, a significant part of the Vaca Muerta shale overlies other producing formations, such as the Los Molles. Apache Corp. had tested the shale in the Neuquen and in 2011 reported results from a horizontal multi-stage well that it said produced at a rate of 7 MMcf/d. At that point the company had already drilled more than 70 unconventional wells in four Neuquen fields. Apache sold its Argentina assets in 2014 to YPF to pay down its debt.