MX Oil (LON:MXO) has revealed changes to its Mexican partnership which see the oil junior take a bigger stake in the venture and reduce its financial burden.
The company’s interest in the Mexican venture with partner Geo Estratos will increase to 55% from 51% and, crucially, it will no longer be obligated to cover its partner’s share of costs once assets have been secured.
Together the partners have applied for five licence blocks in Mexico, where the government is opening up the industry after decades of state monopoly.
Stefan Olivier, chief executive of MX Oil, says the changes to the agreement will significantly reduce development cost payable by the company and as a result ensures more value is retained for shareholders.
“We are delighted with the progress we have made to date in Mexico,” Olivier said.
“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.”
Geo Estratos, meanwhile, as a result of the amendments announced today, will no longer be bound by exclusivity to MX Oil once the partners have secured at least two oil concessions.
Industry attention on Mexico is growing, not just because of the ongoing privatisation of the sector but also because of a significant new discovery.
State oil firm Pemex this week revealed one of the country’s biggest discoveries for several years after a shallow water well in the Gulf of Mexico found an estimated 350mln barrels of oil.
The new find, off the coast of the Tabasco and Campeche states, could yield as much as 200,000 barrels per day by mid-2018.