Renaissance is developing a high quality, diversified shale and mature fields portfolio for development in Mexico.
By applying latest technologies, developed in North America, the Company’s team has evaluated high potential shale and mature fields opportunities throughout Mexico.
In January 2017, PJSC LUKOIL, one of the world’s largest oil producers, chose Renaissance as their partner for the Integrated Exploration and Production Contract for the Amatitlán block in Mexico. Amatitlán is to be the first block developed by Renaissance that the Company has identified with significant prospectively for shale development in Mexico.
Amatitlán is a multi-zone oil rich block with shallow conventional reservoirs and deeper unconventional development potential. The Comisión Nacional de Hidrocarburos evaluation of resources effective January 1, 2019 estimates Amatitlán contains—in the shallow Chicontepec formation only—4.1 billion bbls of crude oil and 3.3 trillion cubic feet of natural gas originally in place.
Renaissance is applying modern oilfield development technologies in Amatitlán to re-establish production in the underdeveloped Chicontepec formation and to commercialize the Upper Jurassic shale formations. Renaissance’s analysis indicates the Upper Jurassic interval is an oil-rich, hybrid shale system in the Amatitlán block and is highly prospective for targeted stacked pay development of this thick unconventional resource. The Upper Jurassic shale interval is widely considered to be the major carbonate source rock for the oil-rich Chicontepec formation but the Upper Jurassic formations have not been commercially developed. To date Renaissance has drilled 16 wells targeting the Chicontepec formations restoring oil production to the block. The company also drilled a 3,550 meter well testing the deeper Upper Jurassic formations, acquiring coring and logs that confirms the presence of the critical characteristics of a commercial play.
In coordination with LUKOIL, Renaissance has taken the lead role in operations for joint development of the Amatitlán block currently held by Pemex-Exploración y Producción (“Pemex”). The minimum US$50 million appraisal work program has been completed for the Integrated Exploration and Production Contract at Amatitlán. The completion of this program is expected to facilitate the existing contract to migrate to a new contract structure with enhanced economics for all parties.
Renaissance was awarded its top three choices in December 2015 in Mexico’s historic first auction of oil and gas properties in 80 years:
The blocks are all in close proximity to each other in the State of Chiapas, which will allow operational efficiencies.
About Our Chiapas Blocks
The Mundo Nuevo block is located 42km southwest of the city of Villahermosa, Tabasco with an areal extent of 27.7 km2 (6,845 acres). The Mundo Nuevo field, a middle Cretaceous fractured carbonate reservoir, was discovered in 1977. This field was developed by PEMEX, Mexico’s state owned oil and gas company, through the drilling of 14 wells, reaching peak production of over 15,000 barrels per day (bbls/day) of natural gas liquids, in the early 1980s. This field’s average production for Q1 2020 was approximately 183 bbls/d of light oil and 4.1 MMcf/d of natural gas with an average reservoir depth of 3,580 meters.
With the advantage of 3D seismic data, acquired since the original wells were drilled, Renaissance has identified numerous potential new development well locations. In order to satisfy the minimum work commitment for Mundo Nuevo, the Company is required to drill one development well.
The Topén block is located 45km southwest of the city of Villahermosa, Tabasco with an areal extent of 25.3km2 (6,251 acres). The Topén field, an upper Cretaceous fractured carbonate reservoir, was discovered in 1978. PEMEX developed this field through the drilling of five wells, reaching peak production of over 1,500 barrels bbls/day of medium crude oil, in the mid 1980s. This field’s average production for 2017 was approximately 200 bbls/d of medium oil and 0.9 MMcf/d of natural gas with an average reservoir depth of 3,300 meters. In September 2018 the field’s production was suspended in preparation of the field development activities.
The Topén field is delineated with 3D seismic data acquired since the original wells were drilled. Renaissance has identified numerous new development well locations and potential for significant field extensions as well as a previously untested area, supported by seismic amplitude analysis.
In order to satisfy the minimum work commitment for Topén, the Company is required to drill one development well.
The Malva block is located 61km southwest of the city of Villahermosa, Tabasco with an areal extent of 21.2km2 (5,239 acres) The Malva field, an upper Cretaceous limestone reservoir, was discovered in 2003. PEMEX developed this field through the drilling of four wells, reaching peak production of over 2,000 barrels bbls/day of light crude oil, in the late 2000s. This field’s average production for Q1 2020 was approximately 177 bbls/d of light oil and 1.1 MMcf/d, with an average reservoir depth of 2,680 meters. The Malva field is delineated with 3D seismic data.
Renaissance used high tech seismic technology and advanced structural interpretation to identify a number of untested potential hydrocarbon amplitudes, new well locations and field optimization opportunities in the existing producing area. In order to satisfy the minimum work commitment for Malva, the Company is required to drill two wells.
For these blocks, Renaissance sees significant opportunity for additional value creation in new well locations as well as application of innovative re-completion technologies.
Renaissance won the three Chiapas blocks by very small differentials of less than 2.5% above each of the second place bid values. Well-attended auction processes saw over 40 companies vying to be the first onshore operators in Mexico’s historic privatization of the energy sector.
In August 2016, Renaissance acquire the license for the Pontón block from the December 2015 “mature fields” auction to become the fourth license held by the Company.
The Pontón block is located 25km southeast of Panuco city, Veracruz, with an areal extent of 12km2 (2,965 acres). The Pontón field was discovered and put into production in 1971 in the Upper Jurassic San Andres formation. In May 1991, production was commenced in the Lower Cretaceous Tamaulipas Inferior formation. PEMEX developed this field through the drilling of 14 wells in the 1970s. The Upper Jurassic San Andres formation has an average reservoir depth of 1,266 meters and the Lower Cretaceous Tamaulipas Inferior formation has an average reservoir depth of 925 meters.
On July 13, 2017, the Company was awarded its request for force majeure for the Pontón block, allowing for a temporary suspension of development operations, to facilitate the remediation by the previous operator of certain areas of the Pontón block that incurred surface contamination from previous oil field activities. Under the terms of the licenses for all of Renaissance’s operated blocks in Mexico, previous operators are responsible for the remediation of all pre-existing damages identified and documented by the Company. In May 2019 the Company entered into an agreement for the transfer of the Pontón license to a Mexico based oil and gas company for consideration of US$1,000,000, upon closing, plus a gross overriding royalty of 10% on future oil and gas revenue from Pontón, for maximum aggregate royalties of US$3,000,000. Renaissance received a cash deposit of US$250,000 towards the closing amount of the transaction.