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Incorporation of JV Company and Award of Permit to Participate in Upcoming Mexican Licensing Rounds
MX Oil, the AIM quoted oil and gas investment Company focused on the re-opening Mexican energy sector, has announced the incorporation of its Mexican joint venture company with established local oil services provider, Geo Estratos. This update is in line with the Company’s strategy to participate in Mexico’s energy industry that is being re-opened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves.
The JVCo, Geo Estratos MXOil Exploracion y Produccion, Sociedad Anonima Promotora de Inversion de Capital Variable, is 51% owned by MX Oil and 49% owned by Geo. Following the incorporation of JVCo and pursuant to the joint venture arrangement, MX Oil will invest US$1 million into JVCo to fund its share of the costs associated with an investment in the region. JVCo has been granted a general permit to operate as a fully incorporated entity in Mexico that will allow it to participate in the E&P bidding rounds scheduled to begin during the second week of November.
Subject to securing a Production Sharing Agreement, the JVCo will look to obtain an operating licence to develop E&P activities in Mexico. MX Oil, along with its partner Geo, continues to be in discussions with Pemex, the state-owned national oil company, with regard to making an application for a PSA in respect of three assets in Mexico as announced on 1 August 2014. A further announcement on this will be provided in due course.
MX Oil’s Chief Executive Officer Stefan Olivier said, “We regard the incorporation of the Mexican entity to participate in the upcoming rounds as an endorsement of MX Oil’s credibility as an early mover in the country’s vast reopening energy sector. In our view this is testament to the quality of both the team we have put in place at MX Oil as well as that of our partner Geo, a leading local oil services company with a proven track record in the Mexican energy sector. With the JV Company now established, MX Oil is well placed to develop oil and gas assets in Mexico with company-making potential. Discussions with both the Mexican authorities and state-owned Pemex are on-going and further updates will be provided in due course, as we look to build on the excellent progress we have made in such a short period of time.”
