An Operator’s Silver Linings from a Difficult Year

Q: How did Perseus adapt its operations to the Pandemic event of 2020?

A: Our work with the communities near our sites was definitely affected. The lack of information and certainty that existed at the time in regards to the pandemic made communities in the vicinity fearful, and that had an impact both with the suppliers and on-site operations. Onshore operators had to adapt to this new reality. In response, we made sure to follow all WHO recommendations, Mexican Health Ministry protocols and QHSE protocols. We also had to adapt to the additional expense that COVID-19 tests represented for our company and our contractors. In this sense, you could say that there were internal and external components to all of this. The internal component had to do with adapting our company culture and protocols to the needs resulting from the pandemic. The external component dealt with communicating our compliance to the communities, so they were aware that our operations posed no risk to their health. Fortunately, we made it through the pandemic without any positive COVID-19 cases.

Q: What conversations did you have with contractors and financial institutions to distribute the economic burden resulting from the pandemic?

A: The pandemic, the fear and uncertainty that it generated, really brought the financial community almost to a standstill that extended to state and local governments, and to local organizations and industry associations as well. Even regulators like CNH closed their offices for some time, and that, in particular, affected us greatly. While we are very much in contact with financial institutions, there was no denying that those same institutions had to act according to the uncertainty that took place in the markets during the early stages of the pandemic. Today, many believe that matters are more under control than they used to be. This confidence has continued to increase with each announcement regarding the vaccine rollout, which has opened the door to additional project financing, should that prove necessary. The operability of suppliers and service providers was definitely greatly affected by the pandemic, particularly during the first months, but we believe that the industry has recovered, especially as PEMEX relaunches a crucial number of its ongoing projects.

Q: How have your field development expectations changed?

A: We reached the well cleanup phase in the Tajon-2. Unfortunately, this cleanup process led to the discovery of a mechanical problem in the well during the drilling process. This has led to a suspension of activities at Tajon-2 and we are in the process of performing a well remediation. Fortunately, the cleanup revealed the reservoir’s great energy and pressure, reaching a production potential of 7,000b/d. This upcoming remediation has led us to discussions with top oil field services companies to make sure that this process is as successful as possible. When it comes to Fortuna Nacional, in our last interview we spoke about the need for an aggressive drilling campaign. These were plans we shared before the pandemic. Unfortunately, all of those plans had to be delayed, as expected, given the pandemic. However, the execution of that drilling campaign is still very much a priority for us. We believe that Fortuna Nacional is a field with tremendous potential and a royalty scheme that enables high ROI and profitability. Both Tajon and Fortuna Nacional also have the advantage of the interconnectivity to PEMEX’s infrastructure, which allows for an effective commercialization of all produced hydrocarbons. We expect to reactivate production in Fortuna Nacional by March and work on some targets in the FN-19 previously drilled well.

Perseus Energy is an independent Mexican Oil & Gas Exploration and Production company that was awarded two license contracts for the Tajón and Fortuna Nacional blocks in Round 1.3.