24th Sep 2014 12:20
LONDON (Alliance News) - MX Oil PLC Wednesday said its Mexican joint venture has been incorporated with Geo Estratos, the Mexico-based oil services company.
The company's local joint venture, Geo Estratos MXOil Exploracion y Produccion, is 51% owned by MX Oil and 49% owned by Geo.
Following the incorporation of the joint venture, MX Oil will invest USD1 million into the business to fund its share of the costs associated with investing in the region. The joint venture has been given a permit to operate as a fully-incorporated entity in Mexico which will allow the company to take part in the exploration and production bidding rounds in Mexico, scheduled to start in the second week of November.
MX said it and Geo are still in talks with Mexican state-owned oil company Pemex with regard to making a bid for three assets in Mexico.
MX's announcement was welcomed later in Wednesday by Northcote Energy Ltd, which signed a three-year deal with MX in August. Under the deal, Northcote will continue providing advice, introductions and support to MX.
In exchange, Northcote got the right to participate with MX as a partner on exploration, drilling, development or production of its oil and gas projects in Mexico. It will be able to participate in the projects to an interest of up to 20%.
"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," said Stefan Olivier, the Chief Executive Officer of MX Oil.
"With the JV company now established, MX Oil is well placed to develop oil and gas assets in Mexico with company-making potential," Olivier added.
MX Oil shares were down 1.8% to 4.20 pence on Wednesday. Northcote shares were down 0.8% to 0.957 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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