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Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: Oil & Gas

18 December 2014

Northcote Energy Ltd ('Northcote' or 'the Company')

Mexico Update

Northcote (AIM: NCT), an onshore US oil and gas exploration and production company, notes today's announcement by MX Oil (AIM: MXO) with whom it has entered into an Agreement conferring Northcote the right to participate, at a level of up to 20%, in potential business activities, alongside MX Oil, in the upstream oil and gas sector in Mexico. The Mexican energy sector is being reopened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves. Further details on the terms of the agreement can be found in the announcement dated 1 August 2014.

The announcement reports that MX Oil has significantly strengthened its relationship with its partner Geo Estratos ('Geo') via an amended JV agreement which has now been executed. In line with this, Northcote has agreed to join MX Oil's management team in transferring a portion of the existing warrants in MX Oilto key members of the Geo team ('the Transfer') to ensure that all parties' interests are aligned. Following the Transfer, Northcote will retain 30 million warrants in MX Oil with an exercise price of 2p per share and the number of warrants with a strike price of 3p per share vesting in equal instalments at 6p; 12p and 18p, shall be reduced from 15,000,000 to 8,793,103 on a pro-rata basis (the "Retained Warrants"). Both the Transfer and the issue of the Retained Warrants are subject to MX Oil shareholder approval.

Northcote Chief Executive Randall J. Connally said, "Northcote is fully supportive of the amended joint venture ('JV') agreement with Geo announced today by our partner, MX Oil plc. This agreement and the Technology Agreement conveyed to the JV substantially enhances our position with respect to farm-in and certain concessions that are expected to be offered in the upcoming bid rounds and give us a competitive advantage in terms of securing certain opportunities. With both a substantial warrant position and a 20% participation right in the JV, it was clearly in the interest of Northcote shareholders for us to do our part in further aligning the interests of Geo with MX Oil and Northcote shareholders. We look forward to making further information about prospective opportunities available to Northcote shareholders as the process continues."

MX Oil's full release:

MX Oil / Ticker: MXO / Index: AIM / Sector: Oil & Gas

18 December 2014

MX Oil plc ('MX Oil' or the 'Company')

Update on Mexican Joint Venture Company activities in Mexico

MX Oil plc, the AIM quoted oil and gas investment Company focused on the re-opening Mexican energy sector, is pleased to update the market on its Mexican Joint venture company ('the JVCo') with its partner Geo Estratos ('Geo').

Significant work has been undertaken by the JV on a number of target blocks which are anticipated to be proposed for sale by both CNH, Mexico's upstream energy regulator, and made available for farm-in by Pemex, the state-owned national oil company. The JVCo has been in dialogue with a number of potential incoming partners who are interested in assisting the JVCo in pre-qualifying to bid for these assets. These parties include both potential partners with an historic production profile that it is likely the CNH will insist upon, and potential strategic investors which would demonstrate the JVCo's ability to fund multiple asset bids in Bid Rounds 0.5 and 1. 

Over the last few months, it has become clear to the management team, how important the JV with Geo is to MX Oil and with this in mind, the Company has strengthened its relationship via an amended JV agreement which has now been executed. As part of this agreement, 20 million of the warrants announced to the market on the 1 August 2014 are being transferred to Geo's principal shareholders from MX Oil's management team and partners. As a result, Geo's and MX Oil's shareholder interests are more closely aligned without any dilutive impact to MX Oil's shareholders. Furthermore, under the terms of this amended JV agreement, Geo is assigning to the JVCo all the benefits and opportunities that fall under their Master Technological Agreement with Pemex. Management believes this strengthens JVCo's profile as a partner with Pemex which better positions it to secure farm-out opportunities that are currently being explored with Pemex.

The key changes to MX Oil's JV with Geo are:

· Geo agrees to direct any E&P concession with either Pemex, the state-owned national oil company, or CNH in Mexico exclusively through the JVCo on a right of first refusal basis - however, MX Oil retains the right to participate in any concessions or projects in Mexico outside of the JVCo

· Geo agrees to transfer the benefits and opportunities generated by Geo's Research, Scientific and Technology Agreement ('Technology Agreement') with Pemex through which it provides services such as exploration, drilling, production, transportation and storage of hydrocarbons into the JVCo

· To further align interests between MX Oil and Geo, 20 million existing warrants currently due to the Board and Northcote Energy ('Northcote'), are to be transferred to Geo's management team - subject to shareholder approval

· JVCo's technical team including geoscientists, engineers and seismic specialists which has been in place since September 2014 continues to undertake analysis on a number of target onshore assets and have identified a number of primary candidates to focus on

· Discussions with Pemex with regards to making an application for specific target assets in Mexico under Bid Round 0.5 are progressing well - a further announcement will be provided in due course

MX Oil's Chief Executive Officer Stefan Olivier said, "MX Oil's strategy to acquire and develop licences in Mexico is progressing well and we are confident that the funds raised during 2014 will be sufficient to see us secure our first block or blocks in the initial bidding rounds. Geo's agreement to exclusively bid for all concessions and projects in Mexico through our JVCo is a major milestone for us which, thanks to Geo's existing relationship with Pemex, strengthens MX Oil's position as an early mover in the vast reopening Mexican energy sector. Geo have received approaches from a number of significantly larger players than MX Oil and their commitment to us is a reflection of our growing status in the Mexican energy space. Similarly, transferring the benefits and opportunities generated by their technology agreement with Pemex, which covers the provision of activities including exploration, drilling and production significantly enhances our JVCo's credibility with both Pemex and CNH, the upstream regulator. 

"We are greatly encouraged by the results of the work we and our partners have carried out to date on our target concessions. This work suggests that these are highly attractive, both in terms of the geology but also with regards to the financial returns on offer, which remain significant despite current volatile oil markets. Following last week's opening of Bid Round 1 by the Mexican energy regulator initially for shallow offshore acreage, we are looking forward to the release of prequalification criteria covering conventional onshore acreage in Q1 2015. Given that MX Oil has sufficient funding to participate in the upcoming bidding rounds, we believe we have in place a strong platform with which to secure assets in both Bid Rounds 0.5 and 1. Further updates on our progress and exploration work will be provided in due course as we look to secure and develop what we believe are company-making oil and gas assets, and in the process generate significant value for our shareholders."

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For further information visit www.northcoteenergy.com or contact the following:

All of the technical information, including information in relation to reserves and resources that is contained in this announcement has been reviewed internally by the Company's Technical Director, Mr. Kevin Green. Mr. Kevin Green is a Petroleum Geologist who is a suitably qualified person with over 30 years' experience in assessing hydrocarbon reserves and has reviewed the release and consents to the inclusion of the technical information.

Notes:

Northcote Energy Ltd is a producing oil & gas company with a portfolio of US exploration and production assets principally focused in Osage County, Oklahoma. The Company has substantial acreage in the US where its primary focus is on the Pennsylvanian and Mississippi Lime formations. Northcote is currently undertaking a continuous 2014 work programme which includes recompletions, new wells, fracks and workover programmes in order to grow Northcote's production and reserves.