Mexico-focused junior explorer MX Oil reported Friday that it has secured a joint venture with Geo Estratos that it has described as "potentially transformational" for the company.
The joint venture is to identify, evaluate, explore, develop and produce hydrocarbons in Mexico. MX said that the JV agreement means that due diligence can now begin on three potential asset transactions that Geo has identified.
MX CEO Stefan Olivier commented in a company statement:
"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."
MX also announced that it had raised approximately $3.4 million in a share placing to provide working capital ahead of the upcoming licensing rounds in the re-opening of Mexico's energy sector.
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