MEXICO CITY, Dec. 4, 2018 /CNW/ -- Sierra Oil & Gas announced today the signing of an agreement that will result in Sierra's business being integrated with Deutsche Erdoel AG (DEA AG), an international independent exploration and production company headquartered in Germany.
Upon completion of the transaction, Sierra will be integrated into Deutsche Erdoel México, a fully-owned subsidiary of DEA AG. The resulting portfolio will consist of ten exploration blocks and one onshore production block and is expected to require capital investment of more than 2 billion US dollars over the next five years.
With this agreement, DEA AG commits to participate in the drilling of 9 offshore exploration wells and to the development of Zama, a world class discovery expected to provide a significant contribution to oil production growth in Mexico in the near term.
Ivan Sandrea, CEO of Sierra Oil & Gas, commented: "We are very pleased to have secured an experienced and well capitalized industrial investor that brings valuable technical talent and international know-how into our organization. Our drilling program for 2019, which has taken years to plan, involves three appraisal wells in Zama and four exploration wells in other blocks, making Sierra one of the most active players in Mexico next year," said Sandrea.
The transaction is expected to be completed during the first half of 2019, subject to regulatory approvals.
About Sierra Oil & Gas
Sierra Oil and Gas is based in Mexico City and the leading independent oil and gas company in Mexico. On the back of its participation in several CNH-managed and highly competitive bid rounds from 2015 to 2018, Sierra Oil & Gas was awarded a total of 6 offshore exploration blocks located in the South East of Mexico, having offered the highest revenues to the Mexican government in each round and a commitment to drill a total six wells.
SOURCE Sierra Oil & Gas