Nu-Oil shares fall as joint venture enters agreement with Royal Eagle

The AIM-traded firm said MFDevCo would work with Royal Eagle on an exclusive basis in Mexico, Colombia and Ecuador, to identify and evaluate potential marginal field development projects, both onshore and offshore.

It said Royal Eagle had “strong relationships” in the area, that were already proving invaluable in facilitating access to operators and projects.

The company expected that non-binding letters of intent would be entered into with operators, to allow a period during which detailed technical and commercial evaluations of identified projects could be undertaken by MFDevCo and Royal Eagle prior to - for projects shown to be technically viable and financeable - entering into a full project contract.

“I am delighted that Royal Eagle have seen our expertise in marginal field development and chosen us as a partner to work with going forward,” said MFDevCo managing director and Nu-Oil joint managing director Alison Pegram.

“I've been impressed by the strength and depth of their relationships in the Latin America region and believe that there are some great opportunities that, working together, we will be able to bring to fruition.”

Alejandro Mendez, chief executive officer of Royal Eagle, added that the company was “pleased” to pursue the exclusive agreement with MFDevCo to identify and evaluate marginal field development projects in Mexico, Colombia and Ecuador.

“Companies and operators with producing and marginal fields in the region can benefit from MFDevCo's unique approach, business model, technology and decades of experience in oil and gas to increase production, mitigate risk and be profitable,” Mendez said.

“Together MFDevCo and Royal Eagle bring a real operational and financial solution to the oil and gas market in those countries.

“We are looking forward to working together to create a strong onshore and offshore oil & gas business pipeline.”

As at 1022 GMT, shares in Nu-Oil and Gas were down 2.12% at 0.74p.