Early Production With Plans for the Long Run

Q: How has Jaguar E&P strengthened its business through its JV with Vista Oil & Gas?
A: Our JV with Vista Oil & Gas has been a great success. We are blending Jaguar E&P’s experience working in Mexico with Vista Oil & Gas’ strong track record as operators in Latin America. When working with such a volatile commodity it is necessary to have a strong focus on costs. Together with Vista’s experience, we believe we can accomplish this more effectively. We are proud of what we have accomplished as a team and we continue strengthening our capabilities.     Having said that, we are open to partner with companies that share our vision, always considering the added value they provide, either in the financial, managerial or technical areas.  
Q: In May 2018, Jaguar announced its intention to invest US$110 million before the end of 2019. How will that capital be used?
A: We have already invested US$60 million in the upfront bonus for the awarded blocks, which means that over half of that commitment has been already covered. We are waiting for permits to be granted before investing the rest of the capital. If everything goes according to plan, we would be able to complete some workovers by 1H19 and start drilling exploratory wells by 2H19. This year is our initial phase. Jaguar has a long way to go and we are working diligently to invest every penny where it has the highest impact. Throughout our development phase, Jaguar’s investment will be much more than the $110 million mentioned for this phase.
Q: How would you rate the statements of the new administration focused on increasing production?
A: It is encouraging to hear there will be a strong push for more production. As private operators, it is our objective, just like that of the government, to increase production, so our goals align very well. I believe this can be achieved by speeding up processes and ensuring that regulation is performed effectively, which is an issue we have had to deal with constantly. Mexico has to create the right conditions for investments to flow. Capital has no flag and it will go wherever it is incentivized to go, meaning wherever it finds the best ROI.
Q: What production levels can be expected from Jaguar E&P for the next year?
A: We are not ready yet to talk about an average production for 2019, as there are many elements to consider in the equation. Depending on the scope of the activities to be performed, it can take up to a year to get all of the permits, even if we already have the teams and the required capital ready. 2019 will be a busy year for us given the number of licenses we have. If the government decides to keep going with the licensing rounds, we would of course be happy to participate and grow our portfolio of onshore fields.
Q: How can regulation be improved to allow for an increase in production levels in Mexico?
A: Regulators have done an excellent job in ensuring that all processes during the licensing rounds were transparent for everyone. However, on the operational side, there is a great deal of room for improvement. The amount of paperwork requested for permits is overwhelming and even redundant in some cases. We should aim for a regulatory approach like that in Colombia, Argentina or Canada, where permits are granted in much shorter time frames, while ensuring that operators are aware of all the required compliance elements for their activities.
Q: How does Jaguar E&P adjust to the social and environmental aspects of the areas it works in?
A: We have an area solely dedicated to addressing all the environmental and social aspects of our operations. We have invested heavily to better understand the situation of the areas where we operate. Also, the team has been busy meeting with communities and municipal authorities within the blocks where we operate. A very specific aspect our team found during their studies and interactions is the lack of drinking water and proper housing. We are working closely with local authorities to find solutions with a quick and effective impact.