Hot Features
Premium
Register for real-time alerts, custom portfolio, and market movers
Mexico Update
Northcote (AIM:NCT), an onshore US oil and gas exploration and production company, has responded to the announcement by MX Oil (AIM:MXO) with whom it has entered into an Agreement conferring Northcote the right to participate, at a level of up to 20%, in potential business activities, alongside MX Oil, in the upstream oil and gas sector in Mexico.
The Mexican energy sector is being reopened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves. Further details on the terms of the agreement can be found in the announcement dated 1 August 2014.
The announcement reports that MX Oil has significantly strengthened its relationship with its partner Geo Estratos via an amended JV agreement which has now been executed. In line with this, Northcote has agreed to join MX Oil’s management team in transferring a portion of the existing warrants in MX Oilto key members of the Geo team to ensure that all parties’ interests are aligned. Following the Transfer, Northcote will retain 30 million warrants in MX Oil with an exercise price of 2p per share and the number of warrants with a strike price of 3p per share vesting in equal instalments at 6p; 12p and 18p, shall be reduced from 15,000,000 to 8,793,103 on a pro-rata basis. Both the Transfer and the issue of the Retained Warrants are subject to MX Oil shareholder approval.
Northcote Chief Executive Randall J. Connally said, “Northcote is fully supportive of the amended joint venture agreement with Geo announced today by our partner, MX Oil plc. This agreement and the Technology Agreement conveyed to the JV substantially enhances our position with respect to farm-in and certain concessions that are expected to be offered in the upcoming bid rounds and give us a competitive advantage in terms of securing certain opportunities.
“With both a substantial warrant position and a 20% participation right in the JV, it was clearly in the interest of Northcote shareholders for us to do our part in further aligning the interests of Geo with MX Oil and Northcote shareholders. We look forward to making further information about prospective opportunities available to Northcote shareholders as the process continues.”
