MXO.L Share News (MXO)

(ShareCast News) - MX Oil said the four licenses it successfully bid for in Mexico's recent oil auctions have all been drilled before, but with modern fracking techniques it expects to significantly increase flows.All four onshore concessions in the prolific Tampico-Misantla Basin, known as the Pimienta tight oil play, have previously been drilled but they remain underexploited, the AIM-listed outfit said, with Mexico having been closed to outside investment for many years.Though the four land contract areas (LCAs) have been largely explored and developed using 2-D seismic data and produced rates of up to 2,528 bopd from vertical wells, MX and its local partner Geo Estratos, a services supplier to state oil producer Pemex and others, believe that by using more modern methods there is a "low risk route to increase the reserves and production profiles of all four fields".The companies will apply 3-D seismic surveys and once results are available, whoever re-drills will have access to the sort of horizontal wells and other recovery enhancement techniques that have proved such a success in US shale, which MX was confident would significantly increase flow rates.The company intends to commission a Competent Person's Report (CPR) in the near-term to confirm the investment potential of the four awarded LCAs.Unconventional oil and gas experts from consultancy group Wood Mackenzie recently said they believed the Tampico-Misantla Basin has good potential, believed it to be an analog to the Barnett formation in Texas.Nevertheless, MX's shares continued to track the slumping oil price lower, falling 14% to 1.71p by 1400 GMT on Thursday.