German exploration and production company DEA Deutsche Erdoel has enhanced its presence in the Mexican exploration and production (E&P) market with the acquisition of Sierra Oil & Gas.
The transaction was completed following the approval of Mexico’s National Hydrocarbons Commission (CNH) and the Federal Economic Competition Commission (COFECE).
The acquisition, reported to be valued around $500m, was announced in December last year.
DEA CEO Maria Moraeus Hanssen said: “DEA sees Mexico as a growth market for its gas and oil business. Following the combination of the new Sierra portfolio and the existing DEA assets, we will have a very active year ahead in terms of operations.
“The acquisition of Sierra is a fantastic opportunity for us to become a very serious player with a significant portfolio in the country.”
Sierra Oil & Gas will now operate as a subsidiary of DEA Deutsche Erdoel until its consolidation with DEA’s Deutsche Erdoel México to create a new business unit.
Deutsche Erdoel México managing director Juan Manuel Delgado said: “Together we will develop a business unit, that is very well equipped to deliver results in all parts of our enlarged operations, and that will serve as the foundation for further growth.”
The acquisition provides DEA with six exploration and appraisal blocks in Mexico, including a material stake in the Zama discovery. Zama is one of the largest shallow water discoveries of the past 20 years globally and is estimated to hold 400-800 million barrels of recoverable oil equivalent (Mboe). It is expected to start production by 2022/23.
It adds a total of 9,400km² of exploration acreage in the core of the Sureste basin to DEA’s portfolio.Through Sierra, DEA holds 40% non-operated working interest in Block 7, containing a significant part of Zama.