Export Development Canada to provide half of International Frontier Resources’ performance bond for work in Mexico
Calgary-based International Frontier Resources (ticker: IFR) announced today that the company has closed on an Account Performance Security Guarantee (APSG) with Export Development Canada (EDC), a credit agency that supports the development of Canada’s export trade abroad. EDC will provided 50% (US$882,050) of a performance bond issued by IFR’s Mexican joint venture company Tonalli Energia, according to a company press release.
On August 25, 2016, Tonalli Energia met all the terms and conditions and signed a license contract with the Mexico Comision Nacional de Hidrocarburos (CNH) for the Onshore Oil and Gas Development Block 24 (“Tecolutla”), granting Tonalli the right to develop and produce hydrocarbons. Tonalli Energia is a Mexican company with the share ownership split equally between IFR and Mexican petrochemical company Grupo Idesa.
As required by the CNH, Tonalli had secured from a Mexican institution a US$1,764,100 performance bond toward the guarantee of performance of the minimum work programs. Upon completion of the minimum work program, the performance bond will be returned.
“Having EDC as a financial partner is an important step in the ongoing growth of IFR and we look forward to building on this strategic relationship,” said Steve Hanson, IFR’s President and CEO. “IFR is honored to be the first Canadian oil and gas exploration and production company to be backed by EDC in Mexico.”
“IFR’s early success in Mexico provides a great example of the world-class expertise that Canada’s junior oil and gas companies have to offer in emerging markets,” said Mark Senn, Regional Vice-President, Western Region, EDC.
“With the energy reforms taking place in Mexico right now, we believe there are tremendous opportunities to be had in that sector, and IFR has just proven that Canadian companies have what it takes to compete and win in the market.”
The Tecolutla block
In November, IFR announced that it officially took over operatorship of Tecolutla from Mexico’s state-owned PEMEX. Tonalli was able to find service providers to be readily available and competitive, and plans to drill its first well in the first half of this year.
“After review of the reprocessed 3D seismic, we have identified areas of the reservoir which we believe, are significantly higher and thicker than previously reported and which have not been penetrated by existing wells,” IFR said in a statement.