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International Frontier Resources Corporation (ticker: IFR) has received a drilling permit for its onshore oil and gas block, Tecolutla, with its Mexican JV, Tonalli Energia.

Tonalli was granted the right to operate, develop and produce hydrocarbons at Tecolutla through a licensing contract with the Mexican government. The Tecolutla block was awarded to Tonalli as part of the first round and third call of Mexico’s oil and natural gas mature fields bid round (Round 1.3), the first in almost 80 years. Each of the blocks offered in Round 1.3 attracted multiple bids.

International Frontier Resources Receives Mexican Drilling Permit

IFR Tecolutla Map

The producing carbonate oil reservoir in the Tecolutla block is the El Abra formation at a depth of 2,340 meters. To date, 1.9 million barrels of oil have been recovered from four previously producing wells at Tecolutla. The wells at Tecolutla were drilled by PEMEX between 1956 and 1972 and had initial production rates up to 473 BPD.

Old field, new data – more reserves

Tonalli has secured the drilling authorization permit from Mexico’s National Hydrocarbons Commission for its TEC-10 directional development well. TEC-10 will be the first Tecolutla well to target new locations within the reservoir with the advantage of 3D seismic that was recently completed by the previous operator and has now been reprocessed by Tonalli.

Based on IFR’s new interpretation of the 3D seismic, the company believes that the Tecolutla field has been significantly underdeveloped.

Tonalli intends to initiate its new Tecolutla development program utilizing modern drilling and completion techniques to increase productivity and recovery from the reservoir. In addition, offsetting field data obtained by Tonalli in Round 2.3 indicated reservoir properties and well productive capabilities of the El Abra have increased the economic prospects of the Tecolutla block.

Progress at Tecolutla so far

  • Additional regulatory permits required to drill and operate TEC-10 have been received
  • Critical services required to drill the TEC-10 well have been secured. These services include an active drilling rig in Mexico, which just completed a successful multi-well drill program

The TEC-10 drilling site is being designed to accommodate the central production facility in addition to four horizontal and directional oil wells.  IRF said a spud date will be announced.


Potential production from TEC-10 will initially be trucked to existing PEMEX facilities in the area. These facilities all have idle capacity, favorable usage terms and have historically accepted crude oil drilled at Tecolutla. As the Mexican crude oil marketing framework emerges, Tonalli intends to pursue new markets for its production. The company is already engaged in discussions to explore markets for its future production.

IFR was one of the first foreign companies to participate in the historic reform of Mexico’s oil and gas sector. Last year, IFR assumed operatorship of the Tecolutla block from state-owned PEMEX. Tecolutla was acquired through a 50-50 joint venture with Mexican petrochemical leader Grupo IDESA.

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