Renaissance to acquire more Mexico acreage

Canadian E&P company Renaissance Oil has signed two agreements with a Mexican upstream player to participate in the development of the Pitepec block, the company announced in a statement released Thursday.

Under the technical services agreement signed with Perforadora Latina, Renaissance will participate in development works under the Pitepec Integrated Exploration and Production Contract established between the drilling company and state-owned Pemex Exploración y Producción (PEP).

The option agreement allows Renaissance to acquire as much as 50% of Perforadora Latina’s Pitepec stakes and become the block’s operator following the migration of the service contract into an Exploration and Extraction Contract. These actions are subject to the approval of both PEP and regulatory authorities.

“Working with Latina and their modern fleet of drilling rigs on the Pitepec block is a significant advancement in a core area,” Renaissance CEO Craig Steinke said in the statement. “The deal structure with Latina positions Renaissance, on a gross basis, to double the company’s acreage in the Upper Jurassic shale trend.”

PEP had previously carried out works at Pitepec, producing up to 150 bopd by 2012. Since Perforadora Latina took over operations, more wells have been drilled in the block and output has increased to 1,075 bopd. The company statement said that 88.6% of the the block has been covered by 3D seismic.

Discovered in 1943, Pitepec is a 248-square-kilometre area located in the unconventional Chicontepec formation in the state of Veracruz. According to National Hydrocarbons Commission estimates, the block holds 6.4 billion barrels of oil with gravities in the range of 32-40 degrees API, in addition to 70.8 bcm (2.5 tcf) of gas.