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8 Oil & Gas Journal
Sept. 7, 2015
GENERAL INTEREST QUICK TAKES
EIM, AEP partner for unconventional work in Mexico
EIM Capital, a private equity fund in Mexico City, announced a
long-term partnership with an affiliate of American Energy Partners LP (AEP) of Oklahoma City to explore for unconventional
resources in Mexico although financial terms were not disclosed.
The US Energy Information Administration reported in
January 2014 that Mexico ranked eighth in the world in terms
of oil and condensate technically recoverable from shale, estimated at 13. 1 billion bbl.
Regarding natural gas, EIA reported Mexico holds 545 tcf
of technically recoverable shale resources (UOGR, March-April
2014). Energy reform in Mexico has opened its oil and gas resources to outside exploration and production companies and
The greatest unconventional potential exists in the part of
the Eagle Ford shale that extends into Mexico’s Burgos basin
from South Texas.
EIM Capital is led by Chief Executive Officer Franco C.
Hamdan and former Mexican President Vicente Fox. AEP is led
by Aubrey K. McClendon, former Chesapeake Energy Corp. co-founder and chief executive officer.
AEP and EIM Capital agreed AEP will invest in EIM Capital to
jointly pursue investments in Mexico’s energy industry and explore
unconventional oil and gas development. No specifics were outlined.
Hamdan, EIM Capital founder and chief executive officer,
said, “Mexico’s proximity to the US market’s established infrastructure, service providers, and operators could help quickly
scale the nascent Mexican shale industry and, with the right
conditions, Mexico could rapidly emerge as a global leader in
AEP Chairman and CEO McClendon said, “EIM’s knowledge of and investments in Mexican infrastructure coupled with
[AEP’s] knowledge of and operation within the unconventional
energy industry will produce unparalleled opportunities.”
Wood calls for further UKCS incentives
The architect of a UK strategy to boost offshore oil and gas work
has called on the government and industry to apply “clever
thinking to incentivize investment.”
Calling crude prices below $50/bbl unsustainable, retired
Wood Group Chairman Ian Wood told the BBC the industry “is
right now facing as tough a time as it has ever faced.”
Wood led a committee that in 2013-14 developed recom-
mendations for taxation and regulatory changes to help the
country achieve what it called maximum economic recovery
from the mature UK Continental Shelf oil and gas resource. The
government has implemented many of the recommendations
(OGJ Online, Feb. 25, 2015).
In his Aug. 28 remarks to the BBC, Wood said the government and industry should continue seeking tax changes to encourage development. “Otherwise, we will not be in a position
to take advantage of the upturn,” he said.
E&P startup buys Permian assets from W&T Offshore
Ajax Resources LLC, a newly formed exploration and production company backed by private equity firm Kelso & Co., has
agreed to acquire all interest in Yellow Rose field belonging to
Houston-based W&T Offshore Inc. for $376 million.
W&T also reserved a 1-4% sliding scale overriding royalty
interest in the field. The deal is effective Jan. 1 and expected to
close during the third quarter.
W&T’s interest in Yellow Rose field includes 25,800 net
acres in Andrews, Martin, Gaines, and Dawson counties in
West Texas. Net production from the field in July averaged
Ajax believes that significant resource potential exists in the assets—which the company was formed to acquire—through multiple stacked pay horizontal drilling zones, and the company will
benefit from extensive well control with more than 200 vertical
and horizontal wells drilled and producing across the property.
Ajax will be led by Chief Executive Officer Harvey Klingen-smith, who has more than 40 years of operating experience in
the oil and gas industry.
For W&T, the move represents an opportunity to increase
its focus on offshore E&P. Earlier this year the company reported a discovery at Ewing Banks Block 910 and the start of production from the Medusa SS No. 6 well on Mississippi Canyon
Block 538, both in the deepwater Gulf of Mexico (OGJ Online,
May 28, 2015).
“This sale will allow us to strengthen our balance sheet and
improve our financial flexibility to pursue the acquisition of
Gulf of Mexico assets while valuations are favorable,” explained