Mexico is in the process of opening up its oil industry to private companies, ending an 80 year state monopoly.
AIM quoted MX has been set up to become among the early movers in this new market, alongside a Mexican partner, Geo Estratos.
The new joint venture company, called Geo Estratos MXOil Exploracion y Produccion (Sociedad Anonima Promotora de Inversion de Capital Variable), will be 51% owned by MX Oil and 49% owned by Geo Estratos.
“With the JV Company now established, MX Oil is well placed to develop oil and gas assets in Mexico with company-making potential,” said chief executive Stefan Olivier.
He added: "We regard the incorporation of the Mexican entity to participate in the upcoming rounds as an endorsement of MX Oil's credibility as an early mover in the country's vast reopening energy sector.
“In our view this is testament to the quality of both the team we have put in place at MX Oil as well as that of our partner Geo, a leading local oil services company with a proven track record in the Mexican energy sector. “
MX Oil is to put US$1mln into the new company to fund its share of initial investment costs.
The new company has a general permit to operate in Mexico which will allow it to participate in the licensing round which is scheduled to get underway in November.
In the meantime the company continues to hold discussions with Mexico’s state owned oil company Pemex regarding a possible application for a production sharing agreement for three assets.