VANCOUVER, Jan. 5, 2016 /CNW/ - Renaissance Oil Corp.
(the "Company" or "Renaissance") (TSX-V: ROE) is pleased to provide
additional information on the three petroleum blocks awarded to the
Company on December 17, 2015 in Call
3 of Round 1 Mature Field Auction in Mexico.
The three blocks, Mundo Nuevo,
Topén and Malva, were the Company's top three choices in the
auction and are in close proximity to each other in the
State of Chiapas, which will allow
operational efficiencies. The blocks collectively comprise
74.2 km2 (18,335 acres) and currently have gross
production of approximately 650 barrels of medium to light oil and
natural gas liquids per day. Renaissance believes that untested
upside exists on all three properties to allow significant
increases to future production levels.
Renaissance won the blocks by very small differentials of less
than 2.5% above each of the second place bid values in a
well-attended auction process that saw over 40 companies vying to
be the first onshore operators in Mexico's historic privatization of the energy
sector. In total, all 25 blocks for auction were awarded.
Additional information on the auction results and awarded blocks
can be found at http://ronda1.gob.mx/?page_id=16419.
According to Comisión Nacional de Hidrocarburos ("CNH") of
Mexico with information provided
publically for the Mature Field Auction, these three blocks
collectively contained original volumes in place of approximately
140 million barrels of oil and natural gas liquids and have
collectively produced approximately 46 million barrels of oil and
natural gas liquids, as at January 1,
2015. The volume estimates publically disclosed by CNH were
not prepared by a qualified reserves evaluator in accordance with
the Canadian Oil and Gas Evaluation Handbook ("COGEH") or National
Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). Renaissance will have a third
party evaluation conducted on each block this year by a qualified
reserves evaluator and will provide the results publically when
available.
The acquisitions are expected to be finalized in the second
quarter of 2016 at which time Renaissance will post a performance
bond of approximately USD$16 million
entitling the Company to three (3) license contracts with terms of
25 years each and the potential for two 5 year extensions per
license area. As a component of the winning bids, Renaissance
committed to certain minimum work programs for each block designed
to enhance current field production which can include the drilling
of new wells, workovers of existing wells, acquisition and
interpretation of seismic data and other analyses. The initial
appraisal stage is expected to last up to two years and estimated
costs of the minimum work programs over the three (3) licenses are
expected to be within the USD$16
million required bond.
The Company currently has over USD$26
million in cash and restricted cash, therefore has
sufficient financial resources to satisfy the required performance
bonds and to fund the expenditures of the work program for each
block.
"We are in an advantageous position with the ability to complete
the minimum work programs for the blocks awarded to Renaissance,
having the financial resources and ample time to meet the required
commitments," stated Craig Steinke,
Chief Executive Officer of Renaissance. "Upon finalizing the
license contracts, Renaissance will be one of the first independent
producers and operators in Mexico's historical energy privatization. Our
bidding success is already providing greater access to additional
material business development opportunities."
Mundo Nuevo
The Mundo Nuevo block is
located 70 km 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 through the drilling of 14 wells,
reaching a peak production of over 15,000 barrels per day
(bbls/day) of natural gas liquids, in the early 1980's. This
field is currently producing approximately 130 bbls/day of natural
gas liquids, 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.
Renaissance was awarded the Mundo
Nuevo block with an additional royalty amount of 80.69%.
According to information publicly released by CNH during the
auction process and as of yet unconfirmed by the Company's own
qualified reserves evaluators in accordance to COGEH and NI 51-101,
the Mundo Nuevo field was
estimated to have contained original volumes in place of 86 million
bbls of natural gas liquids and has had cumulative production of 35
million bbls of natural gas liquids, as at January 1, 2015. Renaissance sees
significant opportunity for additional value creation in new well
locations as well as application of innovative re-completion
technologies.
Topén
The Topén block is located 80 km southwest of the city of
Villahermosa, Tabasco with an
areal extent of 25.3 km2 (6,251 acres). The Topén
field, an upper Cretaceous fractured carbonate reservoir, was
discovered in 1978. This field was developed by PEMEX through
the drilling of 5 wells, reaching a peak production of over 1,500
barrels bbls/day of medium crude oil, in the mid 1980's. This
field is currently producing approximately 280 bbls/day of oil,
with an average reservoir depth of 3,300 meters. 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
which is supported by seismic amplitude analysis. In order to
satisfy the minimum work commitment for Topén, the Company is
required to drill one development well. Renaissance was
awarded the Topén block with an additional royalty amount of
78.79%. According to information publicly released by CNH during
the auction process and as of yet unconfirmed by the Company's own
qualified reserves evaluators in accordance to COGEH and NI 51-101,
the Topén block was estimated to have contained original volumes in
place of 40 million bbls of oil and has had cumulative production
of 8 million bbls of oil, as at January 1,
2015. Renaissance sees significant opportunity for
additional value creation in new well locations as well as
application of innovative re-completion technologies.
Malva
The Malva block is located 95 km southwest of the city of
Villahermosa, Tabasco with an
areal extent of 21.2 km2 (5,239 acres) The Malva
field, an upper Cretaceous limestone reservoir, was discovered in
2003. This field was developed by PEMEX through the drilling
of 4 wells, reaching a peak production of over 2,000 barrels
bbls/day of light crude oil, in the late 2000's. This field
is currently producing approximately 270 bbls/day of light oil,
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 and
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. Renaissance was awarded the Malva block with an
additional royalty amount of 57.39%. According to information
publicly released by CNH during the auction process and as of yet
unconfirmed by the Company's own qualified reserves evaluators in
accordance to COGEH and NI 51-101, the Malva block was estimated to
have contained original volumes in place of 13 million bbls of oil
and has had cumulative production of 3 million bbls of oil, as at
January 1, 2015. Renaissance sees
significant opportunity for additional value creation in new well
locations as well as application of innovative re-completion
technologies.
Focused in Mexico, Renaissance
has through this licensing round, firmly established a high quality
entry position and is working to further develop a diversified
portfolio of lower risk mature fields and unconventional
exploration and development opportunities. Mexico's Energy Reform, now solidly underway,
provides Renaissance with unprecedented opportunity to become a
major player in a world-class resource base.
RENAISSANCE OIL CORP.
Per:
Craig Steinke
Chief Executive Officer
Cautionary Note Regarding Forward-Looking
Statements
Certain information provided in this press
release constitutes forward-looking statements. Specifically, this
press release contains forward-looking statements regarding
expected continuing production levels associated with each of the
acquired blocks, efficiencies created, projected capital
expenditures with respect thereto, expected results of additional
testing and optimization, execution of the necessary agreements,
the length of the initial evaluation stage and expenses associated
therewith, the results of a future COGEH and NI 51-101 evaluation,
the Company's ability to fund and complete the work programs,
projected operating expenses, and sufficiency of resources to fund
the performance bonds. This information also includes information
regarding the acquisition of the blocks, completion of the
acquisition and the benefits to be acquired therefrom including
drilling, exploration and production potential, operating costs and
other economics. For the purposes of this press release, the
Company has assumed that the information received from CNH and
other sources regarding production and remaining hydrocarbon pools
on the properties is accurate, and that the Company's estimates of
prospective drilling locations, synergistic savings and potential
production results are reasonable. Since forward-looking statements
address future events and conditions, by their very nature they
involve inherent risks and uncertainties, including failure to
execute the necessary agreements, unexpected declines in
production, expenses or costs associated with the acquisition
beyond what is anticipated, unforeseen geophysical or geological
structures, failing to complete the acquisition of the blocks on
terms that are acceptable to the Company or at all. Forward-looking
statements are necessarily based on a number of assumptions and
judgments, including but not limited to, assumptions relating to
the outlook for commodity and capital markets, the political
stability in Mexico, the success
of future resource evaluation and development activities, the
performance of producing wells and reservoirs, well development and
operating performance, general economic conditions, weather, and
the regulatory and legal environment in Mexico and Canada. The reader is cautioned that
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
incorrect. Actual results achieved during the forecast period will
vary from the information provided herein as a result of numerous
known and unknown risks and uncertainties and other factors. You
can find a discussion of those risks and uncertainties in the
Company's Canadian securities filings. Such factors include, but
are not limited to: general economic, market and business
conditions; weather conditions and access to properties;
fluctuations in oil prices; the results of exploration and
development drilling, recompletions and related activities; timing
and rig availability; outcome of exploration contract negotiations;
fluctuation in foreign currency exchange rates; the uncertainty of
reserve estimates; changes in environmental and other regulations;
uncertainties associated with the regulatory review and approval
process in respect to projects; risks associated with the
application of early stage technologies; risks associated with oil
and gas operations and other factors, many of which are beyond the
control of the Company. There is no representation by the Company
that actual results achieved during the forecast period will be the
same in whole or in part as those forecasted. Except as may be
required by applicable securities laws and TSX Venture Exchange,
the Company assumes no obligation to publicly update or revise any
forward-looking statements made herein or otherwise, whether as a
result of new information, future events or otherwise.
The resources information that can be derived from the
information in this press release are estimates only. In general,
estimates of oil and natural gas volumes are based upon a number of
variable factors and assumptions, such as production rates,
ultimate reserves recovery, timing and amount of capital
expenditures, ability to transport production, marketability of oil
and natural gas, royalty rates, the assumed effects of regulation
by governmental agencies and future operating costs, all of which
may vary materially from actual results. For those reasons,
estimates of the oil and natural gas reserves attributable to any
particular group of properties, as well as the classification of
such reserves prepared by different engineers (or by the same
engineers at different times) may vary. In addition, the Company's
actual production, revenues, development and operating expenditures
will vary from estimates thereof and such variations could be
material.
The oil and gas volumetric information presented in this
press release was provided to Mature Field Auction participants by
CNH for the purposes of permitting the auction participants to
evaluate their interest in participating in the auction, are not
intended to represent recoverable volumes and are provided for
informational purposes only. To the best of the Company's
knowledge, the "in-place" volumes referred to herein were not
estimated by a qualified reserves evaluator (as such term is
defined in NI 51-101) and no evaluation or audit in accordance with
COGEH or NI 51-101 was undertaken by CNH in the preparation of such
estimates. There is no certainty that such estimates
represent any recoverable volumes. There is no certainty that
any portion of the volumes represented by such estimates, that have
not already been discovered, will be discovered, and if discovered,
there is no certainty that it will be commercially viable to
produce any portion of such resources.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Renaissance Oil Corp.