LONDON (Alliance News) - MX Oil PLC Wednesday said it is feeling confident about pre-qualifying for Mexico's oil and gas licensing round, adding it does not need to raise any more funds to participate, and said it plans to target fields with estimated resources totalling 100 million barrels of oil equivalent.
MX Oil is focused on the re-opening Mexican energy sector and is currently participating in the country's tender for conventional and mature fields. The licensing round is seen as significant after 76 years of state monopoly, as foreign companies are allowed to own oil fields.
Last Thursday, MX Oil said the pre-qualifying criteria to participate in the third phase of the licensing round would focus on "companies that can demonstrate extensive experience in either working with PEMEX, the state-owned oil company, or a proven track record of developing onshore fields".
On Wednesday, MX Oil said the criteria had been broken down into two areas, financial and technical. Companies must have experience and the technical capacity to be an operator of a license with a minimum of 10 years experience in managing an oil extraction project.
The company must also have experience in the implementations of the industrial management security system and environmental protection related to a project.
The financial criteria states the company must have minimum equity of USD5 million per type one block it bids for and joint ventures that do not comply with the USD5 million threshold will still qualify with a minimum threshold of USD3 million of equity per block. Joint ventures will be required to prove that the operator partner owns at least one third of the capital, it said in a statement.
"It is the view of the directors that MX Oil?s joint venture with Geo Estratos and JVCo, complies with the experience, technical and financial requirements, meaning that no further equity needs to be raised by MX Oil in order to achieve pre-qualification," said the company.
"This is exciting news for our shareholders as it allows us to submit our pre-qualification application and bid for assets which, if successful, would give us considerable ownership with a limited financial outlay," added Chief Executive Stefan Olivier.
This pre-qualification criteria is for the third phase of the bidding process, which includes 26 land contract areas in the states of Chiapas, Nuevo Leon, Tabasco, Tamaulipas and Veracruz. MX Oil is primarily focussed on Type 1 blocks, which include onshore fields with estimated resources of around 100 million barrels of oil equivalent.
"I believe that we are in a very strong position in the country, both as an early mover into this space and as one of the most established, in terms of on the ground expertise and experience operating the type of fields being offered in Phase 3," said Olivier. "I would like to reiterate to our shareholders, that we do not anticipate raising any equity until after we have secured a company making asset or assets and I look forward to updating our shareholders in due course".
MX Oil shares were down 3.4% to 4.30 pence per share on Wednesday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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