Two upstart Mexican drillers have signed the first farm-out deal in Mexico’s oil sector that doesn’t include state company Petroleos Mexicanos.
Jaguar Exploracion y Produccion agreed to sell a 50 percent stake of three onshore areas in Tabasco and Veracruz to Vista Oil & Gas for $37.5 million, plus contingency payments if oil prices rise above $65 a barrel in the next two years. Vista, Mexico’s first listed crude producer following a $650 million share sale last year, will pay and operate two of the areas that are already in production, while Jaguar will remain the operator of the third exploratory block.
The deal will help Vista “position ourselves in Mexico,” said Chief Executive Officer Miguel Galuccio, former head of Ypf SA and the architect of Argentina’s shale boom. The areas Vista will operate in Tabasco are already known to Galuccio from his prior experience as a Schlumberger executive, he said. “These areas have a lot of potential. This year we are going to conduct a lot of studies, and next year we will drill eight wells.”