ST. GEORGE’S, GRENADA, 22nd December, 2016 –GIS: MX Oil has signed a non-binding Memorandum of Understanding (MOU) with the Government of Grenada with regard to making an investment in the exploration and development of hydrocarbons in a subterranean area adjoining the maritime boundary with Trinidad and Tobago.
The area covered by the MOU includes underexplored prospective Grenada Tobago Basin acreage adjacent to the Venezuelan/Trinidadian Patao - Poinsettia gas trend.
The intention of the MOU is to form the basis for the negotiation of a more detailed Production Sharing Agreement ("PSA") which, if signed, is likely to occur during the first half of 2017.
It is expected that the PSA will cover matters including, but not limited to, tenure and work programme including 2D seismic and, subject to these results proving encouraging, further exploratory phases including 3D seismic data acquisition.
The signing of the MOU does not guarantee that the Company will be successful in securing a PSA and the Company will update the market in due course in the event of any significant development.
Additional Note from the Government of Grenada:
Companies continuously show interest in exploring for oil and gas in Grenadian waters. On their contacting the Energy Ministry, they are given information on available areas for exploration and that there is no seismic data for these areas since these areas have never been investigated before.
Such virgin areas hold little prospects for investors/explorers, who eventually move to other countries with greater prospects and where data are available.
As indicated in the above release, MX oil and Government, through the MOU, will engage in three months of discussions to ascertain whether conditions can be reached for MX Oil to enter into an exploration arrangement with GOG.
If an agreement is reached after the three month period of discussions, then the Government of Grenada will be able to say it has an investor.
The release by MX oil, and authorized by the Government of Grenada, indicates just this.
The MOU is NON-Binding and there may be no investment coming from these discussions.