Northcote, an onshore US oil and gas exploration and production company, is pleased to announce that it has entered into an agreement with a Mexican company, Gaia Ecologica S.A. DE C.V ('Gaia Ecologica'), that was established by two oil field and environmental services companies to pursue opportunities in the Oil & Gas sector in Mexico.
Pursuant to the agreement Northcote and Gaia Ecologica have agreed the principle framework pursuant to which opportunities in Mexico will be jointly undertaken by the partners as well as the basic process to be undertaken with respect to evaluation of new opportunities. This agreement establishes a business relationship between the companies with the intent of undertaking multiple projects on a joint basis. This is in line with Northcote's strategy to pursue business development activities within Mexico's vast energy sector which has recently been reopened to international operators.
Pursuant to the joint venture, Northcote and Gaia Ecologica will work together to secure contracts and business opportunities ranging from oil field services, environmental remediation, waste water treatment to oil and gas development concessions and production sharing agreements in Mexico. Profits from any such joint ventures will be split on the basis of 51% to Northcote and 49% to Gaia Ecologica after provisions for capital recovery and a preferred rate of return to Northcote. The specific terms may vary based on the characteristics associated with any undertaking between the partners, will be affirmed in a memorandum of understanding related to each specific projects which will upon execution become part of the partnership agreement. Terms related to specific transactions will be disclosed to shareholders as business opportunities are undertaken.
Northcote Managing Director Randall Connally said, "Gaia Ecologica is supported by shareholders, who together have significant experience of providing services to numerous major international companies including PEMEX, Halliburton, Schlumberger and Weatherford and we are pleased to be partnered with such a strong and knowledgeable partner in Mexico. We are fortunate to have a range of value triggers within our portfolio at present including our ongoing work on the ground at Shoats Creek, USA where we will shortly be drilling our first well. This is an exciting time for Northcote on many fronts and I look forward to providing further operational updates in due course."