Pemex Moves to Adopt Powerwave for Waterflood Programs
Wavefront Technology Solutions has entered into a non-binding Letter of Intent ("LOI") with the Subdireccion Tecnica de Explotation, a department of Pemex PEP ("Pemex") for the use of Powerwave in both single well stimulation and enhanced waterflood applications.
Petroleos Mexicanos, or PEMEX, is the largest enterprise in Mexico and Latin America ranks 11th in the top 50 crude oil producers worldwide.
Under the LOI, Pemex will initially carry out 13 single well stimulations and 36 Powerwave-driven waterfloods. The decision on specific Powerwave installations will be solely determined by Wavefront based on the Company's selection criteria. Definitive agreements on an asset-by-asset basis in two operating regions are being drafted for execution.
The objective for single well stimulations is to re-establish oil production beyond current rates. In on-going discussion with Pemex, they have indicated to Wavefront that, in the event of successful well stimulations, Wavefront could be awarded a 5-year open contract without tender to supply Powerwave for well stimulation work. Wavefront cautions that no such contracts have yet been agreed to or entered into. Licensing fees for Powerwave well stimulations in a 5-year open contract are set at US $4,000 per day per well.
The objectives for Powerwave-driven waterfloods are to slow the rate of production decline and provide increased oil production. In on-going discussion with Pemex, they have indicated to Wavefront that, in the event of successful Powerwave-driven waterfloods, Wavefront could be awarded a 10-year open contract without tender to supply Powerwave for enhanced fluid injection. Wavefront cautions that no such contracts have yet been agreed to or entered into. Licensing fees for Powerwave-driven waterfloods in a 10-year open contract are set at US $6,000 per month per injection well.
"Wavefront is very pleased to have entered into this Letter of Intent with Pemex and we look forward to initiating Powerwave in the near term", said Wavefront President and CEO Brett Davidson. "This is a tremendous opportunity for Wavefront as it moves Powerwave into a new market on a large scale. The momentum we are experiencing is a testament to the production benefits Powerwave continues to bring to a host of clients. Wavefront anticipates Powerwave will bring major rewards to Pemex as it works to stem the tide of production decline in many of its operating assets."
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