MX Oil announced a number of amendments to its joint venture agreement with its local partner Geo Estratos (Geo), which include an increase in MX Oil's interest in any concessions or exploration and production contracts to 55% from 51% and the removal of MX Oil's obligation to fund Geo's share of costs from the point of award of the contract thereby significantly reducing the cost burden to MX Oil. Previously under the joint venture agreement, both parties had agreed to pursue concessions in Mexico through a joint venture company, 51% owned by MX Oil and 49% by Geo.
In return for the improved terms, MX Oil has agreed that, once a minimum of two assets have been delivered by Geo under the joint venture agreement, Geo will no longer be required to work alongside MX Oil on an exclusive basis. Geo and MX Oil still intend to bid for up to five blocks in the current bid round.
“In Geo we have a partner with an established relationship with PEMEX, the state-owned oil company, proven expertise in the provision of oil and gas services to local operators, and a comprehensive database on onshore Mexican concessions,” said Stefan Olivier, CEO of MX Oil. “In addition both MX Oil and Geo have formally been recognized by Mexico’s National Hydrocarbon Commission (CNH) as two of 16 interested parties in tendering for mature onshore concessions, and as a result we have both been granted access to the relevant data rooms.”
Within the consortium, MX Oil will be the financial partner and Geo will be the operator or technical partner. MX Oil will continue to fund all costs relating to the securing of concessions and exploration and production contracts however once a concession has been awarded, the costs of development will be funded by both MX Oil and Geo in accordance with their respective participation percentage in the consortium. Previously MX Oil was responsible for funding 100% of the costs of development.
Image: producing basins/MX Oil
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