MX Oil secures Joint Venture with Geo Estratos
MX Oil plc is pleased to provide an update on its activities in line with the Company’s strategy to explore investment opportunities in Mexico’s energy industry, which is being reopened to the private sector to attract greater foreign investment and expertise to develop its substantial hydrocarbon reserves.
· Potentially transformational Joint Venture Agreement (“Geo JV”) signed with Geo Estratos S.A. de C.V.(“Geo”), a highly reputable and established oil services business in Mexico
· The Geo JV is to identify, evaluate, explore, develop, and produce hydrocarbons in Mexico – due diligence can now commence on three potential asset transactions identified by Geo
· Issue of 66,666,666 new ordinary shares via an oversubscribed placing at 3p per share to raise £2 million to provide working capital ahead of the upcoming licencing rounds in the re-opening Mexican energy sector
· Appointment of Pat Mendoza and Sergio Lopez to the Board of MX Oil as Non-executive directors with immediate effect – both of whom have direct experience of operating in Mexico’s oil and gas industry and have long standing relationships with Geo
· Strategic relationship in place with Northcote Energy Limited (“Northcote”) who have played a key role in developing MX Oil’s Mexico strategy and relationships with Patrick Mendoza and Sergio Lopez who were essential in the delivery of the Geo JV
· Appointment of Hybridan LLP as lead AIM broker to the Company
MX Oil’s Chief Executive Officer Stefan Olivier said: “We have an early mover advantage in Mexico and this transformational JV with Geo ideally positions MX Oil to capitalise on the country’s vast hydrocarbon potential, which is estimated to hold 13 billion barrels of recoverable oil resources. From the outset we recognised the need to secure a highly qualified and well-connected local partner to penetrate the sector and Geo more than fits the bill. With over 17 years of in-country experience it has a long track record of delivering a diverse range of services to many of the leading operators in the Mexican oil and gas sector, including Pemex, the state-owned operator, and FTSE 100 listed Petrofac. Geo also has a comprehensive in-house database covering Mexico’s geology and hydrocarbon formations and an extensive list of concessions that will be of major benefit to MX Oil. We are about to start evaluating three of these to determine whether MX Oil will elect to participate alongside Geo in the bidding round and, subject to the outcome, in their subsequent development.
“We are thrilled with the response to our first placing as MX Oil and believe that with this additional funding in place we will be fully funded into 2015 and well positioned to hit the ground running with targeted concession bids in Mexico’s re-opening energy sector.
“Our proposition is also bolstered by the appointment of Pat and Sergio to the Board. Their extensive experience in the oil and gas sector in both the US and Mexico, along with their long term relationship with Geo, will prove invaluable as we look to work with our new partner in Mexico. These relationships were facilitated by Northcote (AIM: NCT), and we look forward to continue working with them in the future. We have built a first class team and along with the continued support of our existing and new shareholders, we are confident we will deliver on our objectives, and in the process generate considerable value for investors.”
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MX Oil plc