IFR Makes Early Dive into Mexico’s Round 2.3

IFR has been granted access to the data room for the third tender of Round 2 in Mexico’s onshore oil and gas auction

Calgary-based International Frontier Resources (ticker: IFR) announced Thursday that its jointly owned Mexican company Tonalli Energia has registered and been granted access to the National Hydrocarbons Commission (CNH) data room for the third tender of Round Two of Mexico’s oil and gas energy reform. Tonalli is in the process of analyzing and assessing block data, and completing documentation in anticipation of entering the bidding process this spring.

Concessions are to be awarded in July 2017 under a license contract model. The licenses for exploration and production will last 30 years and can be extended for a maximum of two additional terms of five years each.

The Mexican government announced the third tender of Round Two on November 14^th which will be the eighth upstream bid round in Mexico since the energy reform began. Fourteen onshore blocks, averaging 185 km2 (72 sections) are available nationwide: six in the Southeastern Basin, four in the Burgos Basin, three in the Veracruz Basin and one block in the Tampico-Misantla Basin which offsets the Tecolutla Block.

Round 2.3 covers a total of 2,595 km2, these development and exploration blocks contain 25 oil and gas fields with existing 3D or 2D seismic coverage. The Mexican Government has estimated that together the blocks contain prospective exploration resources of approximately 251 million barrels of crude equivalent and remaining original extraction volumes of approximately 328 million barrels of crude oil equivalent.

International Frontier Resources continues to move forward with the Mexican energy reform

IFR was one of the first foreign companies to participate in the Mexico’s energy reform, officially taking over operatorship of Tecolutla from state-owned Pemex in November of last year. Tonalli plans to drill its first well in the first half of 2017, according to the company.

“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 after reviewing seismic data from Tecolutla.

For more information about the oil and gas bids taking place as part of Mexico’s energy reform, read Haynes and Boone’s brief here.