5th Dec 2016 16:31
LONDON (Alliance News) - BHP Billiton PLC on Monday said it submitted the winning bid to acquire a 60% participating interest in blocks AE-0092 and AE-0093, containing the Trion discovery, offshore Mexico. BHP will become the operator as well.
Mexico's state-owned Pemex Exploration & Production Mexico will retain a 40% interest in the blocks. BHP expects to finalise and sign the relevant agreements within 90 days, it said.
BHP will pay USD62.4 million in cash upfront as part of the bid, and commit to a minimum work programme, estimated to cost up to a maximum of USD320 million.
Should the two parties agree to progress Trion beyond that minimum work programme, BHP will be required to invest the remainder of the USD570 minimum work contribution, plus a USD624 billion cash contribution, comprising the USD62.4 million upfront cash payment already paid and the balance of USD561.6 million as a future carry for Pemex.
"We see attractive potential in Trion and the Perdido trend, and we are pleased to have the opportunity to further appraise and potentially develop this prospective frontier area of the deep-water Gulf of Mexico," said Steve Pastor, BHP president of petroleum operations, in a statement.
Shares in BHP were up 3.0% at 1,342.50 pence at the close in London on Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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