VANCOUVER (miningweekly.com) – TSX-V-listed International Frontier Resources (IFR) announced Friday that Tonalli Energia met all the terms and conditions and signed a licence 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, a Mexican company with the ownership split equally between IFR and Mexican petrochemical leader Grupo Idesa, signed the agreement on Thursday, marking a significant milestone for the companies eager to establish oil and gas operations in Mexico.
"After months of preparation, this is an important milestone for IFR and Tonalli in formalising our partnership with the Mexican government. The Tecolutla block provides a strategic operating presence in the Tampico-Misantla basin and a solid foothold into Mexico’s energy reform,” stated IFR president and Tonalli Energia director Steve Hanson.
As required by the CNH, IFR advised that Tonalli had secured a $1.76-million performance bond from a Mexican institution for the guarantee of performance of the minimum work programmes required by the 35-year licence agreement.
Mexico's historic energy reform has established a new legal framework for the country's energy industry and is expected to attract billions of dollars in foreign investment.
The denationalisation of more than 900 oil and gas blocks kicked off in August 2014, when Mexico's energy ministry Sener issued a five-year, four-round tender plan stretching from 2015 to 2019 for the denationalisation of 914 oil and gas blocks. IFR believes that there are a significant number of underexploited oil and gas fields in Mexico that would be issued in these bidding rounds.
On May 12, IFR announced that Tonalli Energia, a Mexican company jointly owned by IFR and Grupo Idesa, which each have a 50% stake, was notified by Mexican authorities that it had been awarded the onshore oil and gas development block 24, named the Tecolutla block.
As part of the first round and third call of Mexico’s oil and natural gas ‘mature fields’ bid round (Round 1.3), Tonalli was awarded the Tecolutla block, with an incremental royalty of 31.22%.
The Tecolutla block comprises a 7.2 km2 block in the Tampico-Misantla basin, located within the state of Veracruz.
The producing carbonate oil reservoir in the Tecolutla block is the El Abra formation, which has a depth of 2 340 m. Three-dimensional seismic surveys had been acquired over the entire block and seven existing vertical wells had been previously drilled by Pemex to bring the field into production.
Cumulative output to date on a well-by-well basis from four key vertical wells was 316 000 bbl, 507 000 bbl, 267 000 bbl and 352 000 bbl each. IFR’s technical team believes oil production from Tecolutla has yet to be optimised.