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Under terms of agreements recently entered into with Constructora y Perforadora LATINA (Latina), Renaissance Oil Corp. said it would assist Latina in operations under the Pitepec Integrated Exploration and Production Contract (Pitepec CIEP) with Mexican state oil company Petróleos Mexicanos (Pemex).
The Pitepec CIEP is a 61,300-acre service contract to explore and produce oil and gas near Poza Rica in Veracruz. It is "positioned to migrate into a contract of exploration and extraction (CEE), pursuant to the constitutional amendments of the Mexican Energy Reform," according to Vancouver-based Renaissance.
Assuming approval by state-owned Pemex and Mexican regulators, Renaissance would have the exclusive right to acquire up to 50% of Latina's interest in the Pitepec block at fair market value, following migration. Renaissance would also hold the right to operate the Pitepec CEE post migration. The Pitepec block is adjacent to the 60,000-acre Amatitlán block, now operated by Renaissance.
"The Pitepec block is located in the Tertiary-aged Chicontepec paleochannel formation, in East Central Mexico, and is on trend with the deeper Upper Jurassic shale formations that are widely considered to be the main source rocks for Mexico's prolific conventional oil production," Renaissance said. "While the more shallow Chicontepec formation has been the predominant producing zone for the Pitepec block, Renaissance's log and core analysis, from previous wells testing the Upper Jurassic shale formations, indicate these deeper source rocks are high potential reservoirs for commercial development."
Through the Pitepec CIEP, Latina has drilled 21 Chicontepec wells since 2016 and has increased production to 1,075 b/d of light crude oil. Mexico's Comisión Nacional de Hidrocarburos estimates the Pitepec block has 6.4 billion bbl of oil and 2.5 Tcf of natural gas.
Renaissance took payment last year for its first sale of crude oil, condensate and natural gas to Pemex for production from the Mundo Nuevo, Topen and Malva blocks in Chiapas. The blocks were awarded in Mexico's December 2015 "mature fields" auction.