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IFR Joint Venture to commence drilling operations, rig mobilisation at Tecolutla

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Oilfield Technology,

International Frontier Resources Corporation has provided a drilling update on its onshore oil and gas block Tecolutla, and its Mexican joint venture, Tonalli Energia, a 50-50 joint venture with Mexican petrochemical leader Grupo IDESA.

Tonalli has received the final authorisation necessary to commence drilling operations at Tecolutla. Approval of the plan for Industrial Safety Management System, Operational Safety and Environmental Protection (SASISOPA) (the implementation plan) has been granted by the National Agency of Industrial Safety and Environmental Protection of the Hydrocarbons Sector (Agencia de Seguridad, Energía y Ambiente - ASEA). The implementation plan details the operations safety system Tonalli will use for oil and gas operations in Mexico.

"Having satisfied all regulatory requirements, Tonalli is now preparing for rig mobilisation and drilling operations for the TEC-10 directional development well," said Steve Hanson, President and CEO of IFR. "Tonalli expects the construction of the drill pad to be completed by mid-March and a spud date is anticipated in mid-April. Based on our interpretation of 3D seismic data, we believe the Tecolutla field has been significantly underdeveloped, and the TEC-10 well is an important step in developing the asset to achieve commercial production."

Tonalli intends to initiate the Tecolutla development program utilising modern drilling and completion techniques to increase productivity and recovery from the reservoir. TEC-10 will be the first Tecolutla well to target new locations within the reservoir leveraging the advantage of recently acquired 3D seismic, which has now been reprocessed by Tonalli. In addition, offsetting field data obtained by Tonalli in Round 2.3 indicated reservoir properties and well productive capabilities of the El Abra formation that increased Tonalli's confidence in the economic viability of the Tecolutla block.

The producing carbonate oil reservoir in the Tecolutla block is the El Abra formation at a depth of 2340 m. To date, 1.9 million bbls of oil have been recovered from four previously producing wells at Tecolutla. The wells at Tecolutla were drilled by PEMEX between 1956 and 1972 and had initial production rates up to 473 bpd.

IFR was one of the first foreign companies to participate in the historic reform of Mexico's oil and gas sector when Tonalli was granted the right to operate, develop and produce hydrocarbons at Tecolutla through a licencing contract with the Mexican government. The Tecolutla block was awarded to Tonalli as part of the first round and third call of Mexico's oil and natural gas ‘mature fields’ bid round (Round 1.3), the first in almost 80 years. Each of the blocks offered in Round 1.3 attracted multiple bids.

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