Random Information - Part 3 Management pointed out that ROE may be a small company but it is a big player in Mexico. Last year, ROE drilled 12% of all onshore wells drilled in Mexico last year. They drilled 18 out of the total of 150 wells drilled in all of Mexico. I found the fact that only 150 wells had been drilled onshore in all of Mexico last year absolutely astounding. The oil well drilling activity in Alberta last year, which was an extremely slow year, with large parts of the industry suffering huge declines and yet there were 7,900 wells drilled and completed last year in Alberta. Texas had close to 12,000 completions in 2018.
Management pointed out that their partner, Lukoil is a big player in Mexico in the offshore oil area being involved in three offshore blocks. He stated that ROE has everybody’s attention as they are doing more than virtually anybody else onshore.
Management stated that PEMEX is essentially an offshore development company and they are one of the best companies in the world in offshore development. Their people and engineers are world class. Everything about Pemex is for offshore. The opportunity for ROE and other companies onshore is huge as Pemex has nothing onshore planned and its’ technology level for conventional onshore is light years behind other countries and light years behind Pemex ability offshore. Nobody needs to worry about Pemex taking over shale oil development, they don’t have the technology, the personnel or the money to do so.
When it comes to the new government and all of the new people being added, it was explained to me that while new people have been added most of the additions have been at the Department head levels. The employees who do the work have not had many changes. They just have to work and get the new people in charge to understand and become knowledgeable. As for Pemex having a new CEO, he is the fourth new person in that position since ROE was awarded its Contracts on the Chiapas blocks. ROE has gotten used to the revolving door for the Head of Pemex.
Hope the above gives you some incite into what is being done and what the overall situation is. ROE has a highly skilled group in business development, finances, shale oil, and negotiations. They are also one of the most experienced oil groups present and working in Mexico when it comes to understanding and dealing with the regulatory process in Mexico.