International Frontier Resources Corp (
TSX.V: IFR,
OTCQB: IFRTF,
Forum) is a Canadian junior energy company and already the subject of a previous full-length Stockhouse
feature article. The Company’s operational focus is in Mexico.
Why Mexico?
In 2013, after more than 75 years of a state run energy monopoly by PEMEX, Mexico’s government announced that it was opening its oil industry to local and foreign companies.
Not only have hundreds of oil and gas fields been made available to new bidders, Mexico’s state-owned PEMEX is also farming out many of its existing projects. These opportunities are available with respect to both offshore and onshore oil production. With offshore projects requiring greater financial resources, bidding has been highly successful with the supermajors including Exxon, Shell, Chevron, CNOOC and Total.
IFR’s focus is on the onshore opportunities. The Company was awarded a highly prospective block of land known as Tecolutla, located in the Tampico-Misantla Super Basin. According to IHS Markit, a London-based economic analysis firm, this basin remains highly under-explored, and could hold up to 2.5 billion barrels of equivalent (BOE) in multiple conventional fields. Last year, International Frontier produced a successful bid and ended up winning with favorable terms with respect to royalty payments to Mexico’s government.
It is expected that a new round of onshore fields will be announced before year end, and IFR expects to participate in the process. The re-development of Mexico’s oil patch is one of the bigger energy stories leading into 2018. Stockhouse recently had the opportunity to ask IFR’s CEO, Steve Hanson, to supply further information on
Mexico’s energy deregulation, and the investment opportunity for International Frontier and its shareholders.
Please provide some background on IFR for investors who are new to the Company.
IFR is a Canadian publicly traded company listed on the TSX.V as IFR, and OTC Markets as OTCQB: IFRTF. Our company has an accomplished team and demonstrated track record of advancing oil and gas projects and is one of the first foreign companies to participate in the historic reform of Mexico's oil and gas sector. Last year, IFR, assumed operatorship of the Tecolutla block from state-owned PEMEX through its Mexican-Canadian joint venture company Tonalli Energia. Tecolutla was acquired through the 50-50 joint venture with Mexican petrochemical leader Grupo IDESA in last year's onshore block auction. PEMEX handed over operatorship of Tecolutla to Tonalli Energia in November 2016.
How did International Frontier become involved with Mexico’s energy deregulation?
We were some of the first Canadians or foreigners to investigate the opportunity a few years ago when the Energy Reform was first announced, and quickly realized that it was unlike any oil and gas opportunity we had seen around the world. These fields were largely untapped, underdeveloped and well suited to developing with current day technology and engineering.
In general terms, what was it that attracted IFR to the Tampico-Misantla Basin?
Mexico’s Tampico-Misantla Basin has been identified as a potential “global onshore super basin” according to
new research released by business intelligence firm IHS Markit. They define ‘super basins’ as having multiple reservoirs and source rocks, diverse play types across numerous geologic horizons, infrastructure with access to markets, and established service sector and supply chains. The Tampico-Misantla Basin is under-explored and IHS estimates that as much as 2.5 billion BOE might be found in multiple conventional fields providing a great number of energy opportunities for large and small companies, national oil companies and investors.
The Tecolutla license is considered to be a “mature” block with respect to oil development. What does that mean?
The Tecolutla Block is a vastly underdeveloped block drilled between 1956 and 1972 with the last well producing in 2014. This is not exploration as there is a known oil pool in place and we intend on using new technology and engineering techniques to workover the existing wells and begin drilling a series of new ones very soon.
So the Company is working a lease with lots of existing infrastructure already in place, but which still hosts the potential for significant oil production?
Yes, we are optimistic and confident that we will be able in the near term to bring the oil field back on stream and exceed historic production. This is conventional drilling, with thick pay zones and the pressure is as good as it was back in the 1970s.
What areInternational Frontier’s near-term plans with respect to Tecolutla?
We are in the late stage of getting approvals from the Mexican government to begin operations on our oil block. As previously mentioned, we intend on using new technology and engineering techniques to workover several existing wells and begin drilling a series of new wells very soon.
But Tecolutla is not IFR’s only focal point. Please briefly outline the new round of bidding taking place in Mexico.
The government of Mexico has stated that there will be a series of bid round auctions for conventional and unconventional onshore fields over the next few years; - in fact, a few hundred fields are expected to become available. We expect Mexico’s National Hydrocarbons Commission (CNH) to make an announcement very soon regarding the next auction and we expect to participate.
Should investors be anticipating any significant developments for International Frontier over the short term?
Our short-term goals are to bring Tecolutla back into production and be one of the first free market companies to economically produce onshore oil in Mexico in almost 80 years. Also, as a team, we will continue to seek out new business opportunities in Mexico by way of joint venture and bid round to increase shareholder value.
Longer term, what is your mission with respect to IFR’s development over the next five years?
Our long-term goal is to build an asset base in Mexico that has a diverse product mix and is focused on development opportunities where IFR believes PEMEX has not developed the fields in a manner that has fully exploited the reservoir’s potential. In addition, we will focus on opportunities that have additional upside either through exploration or through conventional and unconventional zones that were not previously exploited. In partnership with Mexico’s leading petrochemical company, Grupo IDESA, IFR aims to be the next energy leader in Mexico.
FULL DISCLOSURE: International Frontier Resources Corp is a paid client of Stockhouse Publishing.