Sierra hires Canada’s Scotia Waterous to sell stake in Mexico block

Bloomberg

Upstart Mexican driller Sierra Oil & Gas S de RL de CV, which co-owns a billion-barrel find in the Gulf of Mexico, has hired Canada’s Scotia Waterous to sell a stake in a nearby exploratory block.
“We are negotiating the final terms of the agreement with the buyer,” said Ivan Sandrea, Sierra’s chief executive officer, speaking over the phone from Houston. “It’s been a very competitive process.” He declined to identify the buyer, citing a confidentiality agreement.
Sierra, which has backing from EnCap Investment LP, Riverstone Holdings and BlackRock Inc., is seeking to sell a minority stake of the 195-square kilometer area in the Southeast basin where it has partnered with Talos Energy Inc. and Premier Oil Plc. Sierra has a 45 percent stake in the block, one of two awarded to the consortia group led by Talos in Mexico’s first competitive auction in 2015. The second block, where the Zama well was drilled last year, is estimated to contain as much as two billion barrels of oil-in-place and is one of Mexico’s biggest oil discoveries.
Sierra is among a growing number of companies seeking to sell Mexican oil assets, a development made possible by 2013 legislative changes that opened the market to private investment after almost eight decades of state monopoly.
Last month, Jaguar Exploracion y Produccion SA de CV and Vista Oil & Gas SAB de CV signed Mexico’s first farm-out deal — a joint venture in which help developing an oil area is exchanged for a stake — that didn’t include state-owned Petroleos Mexicanos. Eni Spa and Cnooc Ltd have also said they are considering farming out blocks, and Pemex will seek partners to develop seven onshore areas in an October 31 auction.