LONDON (Alliance News) - MX Oil PLC on Thursday said all four of the Mexican onshore concessions it was awarded alongside its local partner Geo Estratos in mid-December are in the "prolific" Tampico-Misantla Basin, and it now intends to commission an independent "competent person's report" to confirm the investment potential of each of the areas.
According to the AIM-listed oil and gas investing company, the basin has to date produced around six billion barrels of oil and currently produces approximately 70,000 barrels of oil per day.
The four land contract areas in question, namely Tecolutla, La Laja, Ponton, and Paso de Oro, all have "previously discovered but underexploited" fields, MX Oil said.
"By applying advanced technology and techniques such as 3-D seismic surveying and drilling horizontal wells, there is a clearly defined and low risk route to increase the reserves and production profiles of all four fields. This is before the exploration and development of new targets, which either have been or will be identified using 3-D seismic," Stefan Olivier, MX Oil's chief executive, said.
Previously, the fields were largely explored and developed using 2-D seismic data and produced from vertical wells at rates of up to 2,528 barrels per day.
Separately, AIM-listed Northcote Energy Ltd welcomed the news from MX Oil, as it has the right to participate as a partner at a level that is 20% of the interest retained by MX Oil in any concessions or other oil and gas production projects it enters into in Mexico.
That right terminates on August 1, 2024, a decade on from the original deal. "Per the terms of the participation agreement MXO will formally notify Northcote that it has procured a bid and Northcote will then have 20 business days to elect to participate in the project," Northcote said.
Shares in MX Oil were down 7.3% at 1.85 pence on Thursday morning, while shares in Northcote were down 14% at 0.0562p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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