MX Oil plc has agreed a number of amendments to its Joint Venture Agreement with its local partner Geo Estratos, which include an increase in MX Oil's interest in any concessions or E&P Contracts to 55% from 51% and the removal of MX Oil's obligation to fund Geo's share of costs from the point of award of the contract thereby significantly reducing the cost burden to MX Oil. In return for the improved terms, MX Oil has agreed that, once a minimum of two assets have been delivered by Geo under the JVA, Geo will no longer be required to work alongside MX Oil on an exclusive basis. Geo and MX Oil still intend to bid for up to 5 blocks in the current bid round.
Key changes to JVA:
•MX Oil and Geo will jointly participate in the attainment of Concessions and E&P Contracts as a non-regulated consortium under Mexican law in which MX Oil will have a 55% interest and Geo 45% - previously under the JVA, both parties had agreed to pursue concessions in Mexico through a Joint Venture company, 51% owned by MX Oil and 49% by Geo
•Within the Consortium, MX Oil will be the financial partner and Geo will be the operator or technical partner
•Geo agrees to work with MX Oil on an exclusive basis to secure E&P Contracts from the CNH until a minimum of two concessions have been awarded to the Consortium
•MX Oil will continue to fund all costs relating to the securing of concessions and E&P Contracts however once a concession has been awarded, the costs of development will be funded by both MX Oil and Geo in accordance with their respective participation percentage in the Consortium - previously MX Oil was responsible for funding 100% of the costs of development
As announced on 9 June 2015, both MX Oil and Geo have each been formally listed as interested parties by the National Hydrocarbons Commission ('CNH') in Phase III of Bid Round 1 which is focused on the tender for mature onshore conventional fields in Mexico. As a result both MX Oil and Geo are able to access the relevant data rooms to undertake due diligence on concessions of interest. This process is already underway.