On 21 November 2018, the CNH granted the official award after contract signature for the CNH-M5-Miquetla/2018 license contract with Operadora de Campos DWF, S.A. as operator and PEMEX as partner.Â      The contract was migrated from      the AE-0388-2M-Miquetla exploration entitlement block and represents the      fourth legacy service contract migrated to an exploration and production      contract (CEE).Â    Operadora de Campos DWF, S.A.      de C.V. is the operator with 51% working interest and non-operating      partner is PEMEX with 49% working interest.  The minimum work commitments      for the contract include 11,209 work units for exploration activity and      14,911 work units for development activity for a total of 26,120 work      units.Â  With and oil price of USD      55-60/bbl this equates to USD 1,000/work unit or the total work      commitments are approximately equivalent to USD 26.12 million.    On 19 January 2017, the CNH approved a request by PEMEX to modify Anexo 2 (Addendum 2) of its Exploration and Production entitlement to include the exploration commitments approved for the AE-0388-M-Miquetla block on 13 October 2016. This represents another step in the migration to an Exploration and Production contract (CEE).  On 13 October 2016, the CNH approved a request by PEMEX to modify its exploration commitments for five modified Service Contracts including the AE-0388-M-Miquetla block Exploration and Production entitlement.Â  In September 2015 SENER granted PEMEX rights to all horizons instead of just the Paleocene and Upper Cretaceous productive zones in the block area.Â  The rights include all stratigraphic horizons to the Jurassic and also for unconventional exploration and production.Â  As a result, PEMEX has requested modifications to its exploration commitments for the block that includes the provisional proposal to drill one unconventional test well within the block to the Upper Jurassic Pimienta Formation.Â  The proposed horizontal test is the OPS-1 well.Â  It has a proposed total depth (PTD) of approximately 4,700 m measured depth (MD), 3,204 m true vertical depth (TVD), the Pimienta Formation objective at 2,816 m and a 1,500 m horizontal leg.Â  The total approved investment commitment for the block is USD 9.18 million.Â  The approved budget also includes re-processing existing 3D seismic, geological studies as well as the drilling of the horizontal test.Â  The OPS-1 well has estimated resources to be incorporated of 11.7 MMb of 33Â° to 38Â° API oil.Â  PEMEX has a provisional trajectory for the horizontal to be drilled in a northwest to southeast direction.Â  The CNH approved modifications were sent to SENER who will grant the final approvals.Â  If PEMEX proceeds with its planned horizontal test, it will have to have the final plans approved by the CNH.Â Â Â    PEMEX is the underlying titleholder to the entitlement and there was no mention of the companies involved in the Service Contract but it is assumed they will remain as partners in the CEE. The CNH suggested in its final opinion that PEMEX considers farming out to other companies in order to share risk and have companies involved with the latest technology to help it develop the unconventional potential in the country.Â Â  One of the factors in the CNH suggestion for PEMEX to farm-out was the marginal economics of the planned activity.   On 11 January 2017, the CNH approved a request by PEMEX to modify the area of the adjoining AE-0388-M-Miquetla and the A-0217-M-Campo Miquetla blocks in order to exclude the Castillo de Teayo archeological site.Â  The AE-0388-M-Miquetla block was reduced by 1.60 sq km from 140.83 sq km to 139.23 sq km and the A-0217-M-Campo Miquetla was reduced by 1.60 sq km from 202.52 sq km to 200.92 sq km. The AE-0388-M-Miquetla block has undergone a number of modifications over the past year.  On 1 September 2015, the Secretaria de Energia de Mexico (SENER) granted formal approval for the migration of the A-0388-Miquetla block production entitlement Service Contract to the AE-0388-M-Miquetla block Exploration and Production entitlement. The block covers an area of 139.23 sq km in the Tampico-Misantla Basin after modification on 11 January 2017. The Exploration and Production entitlement continues to have a 25 year total term from original granting date of 13 August 2014 but now has a new commencement date to the two phase exploration period.Â  The first three year exploration phase of the entitlement commenced on 1 September 2015 indicating a final expiry of 1 September 2018 and there is the possibility of a two year extension period.Â  Additionally in October 2016 the Exploration and Production entitlement was modified significantly with changes to the exploration commitments and rights to all geological horizons.Â  The entitlement is still in the final migration process to the CEE which is expected to occur by 4th quarter 2017, or two years from the initial 2015 date SENER and PEMEX reported at the start of the process.
CNH granted the official award after contract signature for the CNH-M5-Miquetla/2018 license contract with Operadora de Campos DWF, S.A. as operator and PEMEX as partner.  