YPF (NYSE:YPF) ended +7.8% on Monday to its highest level in nearly a decade after the governments of Argentina and Brazil signed a memorandum of understanding to study the development of infrastructure for sending natural gas exports from Argentina's Vaca Muerta shale formation to Brazil.

Vaca Muerta is the world's second-largest shale gas reserve and fourth-largest shale oil reserve, and Argentina's YPF (YPF) state oil firm is leading activity there in the hope of turning the country into a major energy exporter.

Meanwhile, Brazil is Latin America's largest crude oil producer, but its gas production is not sufficient to meet rising domestic demand, which has made increasing gas supply a priority for Brazil President Luiz Inacio Lula da Silva.

The working group created by the MoU will analyze potential routes for the gas to reach Brazil, with Brazilian authorities saying the deal could initially see imports of 3M cm/day from Argentina, potentially reaching as much as 30M cm/day by 2030.

The deal occurred even as Argentine President Javier Milei and his Brazilian counterpart have frequently criticized each other.