Adm Energy Regulatory News (ADME)

24 April 2014

Astar Minerals / Ticker: ASTA / Index: AIM / Sector: Oil & Gas

Astar Minerals plc ('Astar' or 'the Company')

Implementation of Investing Policy

Further to the announcement of 22 April 2014, Astar Minerals plc is pleased to announce that it has now implemented its investing policy, having satisfied the requirements of Rule 15 of the AIM Rules for Companies.

In addition, the Board would like to take this opportunity to provide shareholders with further information on the investment opportunity in Mexico's energy sector. The Board is actively exploring opportunities in Mexico and against this background will, if necessary, present any amendments to its investing policy to shareholders ahead of its next Annual General Meeting.

In 2012, Mexico produced approximately 3m barrels of oil per day, making it the world's ninth largest oil producer. According to the BP Statistical Review of World Energy 2013, Mexico is estimated to have the 18th largest oil reserves in the world with some 11.4bn barrels. Further, Energy Information Administration ("EIA") estimates Mexico has the eighth largest tight oil resources, being oil that is trapped in impermeable formations such as shale or sedimentary rocks that require artificial fractures to allow the hydrocarbons to flow, at 13bn barrels. As an example, the prolific Eagle Ford Shale formation across the border in Texas which produces natural gas, condensate, oil and natural gas liquids at margins more favourable than other shale plays in the US, extends into Mexico where it is largely under-exploited due to insufficient capital and lack of access to technology and expertise. Similarly, there has been very little activity in Mexico's portion of the Gulf of Mexico compared to the US due to lack of technical capacity to effectively explore or produce from deep water areas.

As a result of recent regulatory reforms to attract greater foreign investment and expertise, Mexico's energy sector is being reopened for the first time since 1938 allowing for the exploitation and development of its hydrocarbon reserves. Following discussions with relevant members of the Government of Mexico and business leaders, it is management's view that, as well as the need to attract capital into Mexico to develop its resources, appropriate technical capability and expertise are also required. The Company therefore believes that attractive opportunities exist with companies and individuals with knowledge of the Mexican energy sector and with the skills and equipment that will be required. 

Astar's Chief Executive Officer Stefan Olivier said

"We are delighted that the Company has implemented its investing policy. Thanks to regulatory changes, the vast Mexican Energy sector is rapidly opening up to the international community. With our strategy to invest in natural resource companies in place, we believe that this is a highly opportune time for Astar to exploit the significant opportunities on offer within Mexico's already substantial energy industry. I look forward to providing updates on our progress in due course."

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