Mexico greenlights US$2.5bn Hokchi development plan

Thursday, May 17, 2018

Mexico's hydrocarbons commission CNH has approved Hokchi Energy's development plan for the Hokchi field comprising area 2 awarded in licensing round 1.2.

This makes Hokchi the first player who participated in the licensing rounds after the energy reform to reach the development phase which will require a US$2.5bn investment.

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The development plan proposes two platforms, seven production wells and seven injections wells. Hockchi aims to produce 147.8Mb of 45.4Bf3 of natural gas with a recovery factor of 37%. The contract considers a period of 25 years with the possibility of two five-year extensions. Royalties for the Mexican government amount to 70%.

Hokchi won the shallow water area in the Cuencas del Sureste basin in October 2015. The firm's evaluation plan was presented in April 2016 and its development plan in December 2017. During the 20-month evaluation phase it had to drill five wells and invest about US$135mn.