LONDON (Alliance News) - MX Oil PLC on Wednesday confirmed that it has pre-qualified to participate in the upcoming licensing round in Mexico which is offering 25 contract areas, all onshore, to prospective companies.
The licensing round in Mexico is significant as it represents the country opening up its oil and gas resources to foreign companies after around 76 years of state monopoly in the sector.
Under the licensing round, 25 onshore contract areas will be awarded, with MX Oil targeting a large chunk of those areas on offer by submitting applications for five areas in total. Back in May, MX Oil said it was potentially targeting concessions with estimated resources totalling 100.0 million barrels of oil equivalent.
MX Oil, alongside other companies participating in the licensing round, had to meet certain criteria in order to bid for the contract areas on offer. MX Oil paired up with local firm Geo Estratos, and submitted its pre-qualification filing with Mexico's National Hydrocarbons Commission regarding its participation in the third phase of the Bid Round 1 licensing round back in early October.
"Thanks to the due diligence we have carried out, and access to Geo's comprehensive proprietary database, we have a first rate understanding of the potential of the conventional concessions we are focused on, all of which are lower risk development projects with company-making potential, even at current oil prices," said Stefan Olivier, chief executive of MX Oil.
On Wednesday, MX Oil said it has been informed it has pre-qualified to participate in the licensing round, with the concessions expected to be awarded on December 15.
It is currently drilling in Nigeria to try to get some near-term production going. Peak production from two wells in Nigeria is expected to reach 11,000 barrels of oil per day before it enters phase two to boost that production up to 19,000 barrels of oil per day.
On Wednesday, MX Oil said the talks about securing some debt funding to finance its investment requirements in Nigeria are at an "advanced stage", and said it expects to provide an update before the end of 2015.
"With drilling operations reportedly now complete and production on course to commence offshore Nigeria in early 2016 and discussions to secure debt funding at an advanced stage, this is a highly exciting period for MX Oil, one in which we are focused on building a leading oil and gas investment company," said Olivier.
Importantly, MX Oil was initially targeting first production from Nigeria before the end of 2015.
MX Oil shares were up 3.1% to 2.63 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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