Renaissance Oil Successfully Brings Amatitlán Back into Production

Renaissance Oil Corp., in conjunction with its partner Lukoil, has progressed the field evaluation program to production for the Amatitlán block in Veracruz, Mexico. Renaissance has now:

  • Completed the third workover of a scheduled six well workover program with the fractured recompletion of a lower zone in the Chicontepec formation in a previously non-producing well;
  • Gross production from the three workovers has stabilized at approximately 110 bbls/d of 38° API light oil;
  • Gross cost for the three workovers is estimated at C$650,000, or under C$6,000 per producing barrel;
  • The workover rig has now been redeployed to the fourth location, with expected completion of the operation by mid-November; and
  • Drilling rig crews and equipment have now received all required certifications and expected to be moved to the first drilling location in the coming weeks, subject to finalizing drilling permits.

“In keeping with the committed work program, Renaissance and Lukoil are efficiently re-establishing production on Amatitlán through light and heavy workovers and are rig ready to commence drilling the shallower Chicontepec and deeper Upper Jurassic Shales”, stated Craig Steinke, Chief Executive Officer of Renaissance.

Non-Brokered Private Placement
The Company has entered into a non-brokered private placement with certain members of the Renaissance technical team for 4 million units at a price of C$0.25 per unit for gross proceeds to the Company of C$1 million. Each unit comprises one common share of Renaissance and one common share purchase warrant (a “Warrant”) each Warrant exercisable to acquire one additional Share of Renaissance at a price of C$0.50 for 5 years.  All securities issued under this Offering will be subject to a hold period of four months and one day from issuance, in accordance with applicable Canadian securities laws.  It is expected the Offering will be completed in approximately two weeks, subject to acceptance by the TSX Venture Exchange. The proceeds from the Offering will be used to develop Company properties in Mexico and for general corporate purposes.

The Company further announces that pursuant to the Company’s stock option plan, it has granted to directors, officers, consultants and employees of the Company options to purchase an aggregate of 1,200,000 common shares of the Company at a price of C$0.25 per share for a period of up to ten years, subject to regulatory approval.

Renaissance continues to make progress on its journey to become a major Mexican energy producer.

RENAISSANCE OIL at a glance

Renaissance Oil is developing a high quality, diversified shale and mature fields portfolio for development in Mexico and Spain.

The Company comprises a group of world renowned shale and financial experts. Many members of Renaissance's team commenced working together in 2009, to develop Realm Energy International Corporation, until the company was successfully merged in November 2011.

The team is now positioned to build on its experience, abilities and past success to create an exceptionally high growth opportunity for Renaissance Oil Corp. shareholders.

Consistent with their past collaboration with Halliburton, management will continue to foster this relationship with specific emphasis on utilizing latest clean technologies in conducting its operations, in the most advanced and socially responsible way.

MEXICO OPERATIONS

In January 2016, Renaissance Oil provided information on the three petroleum blocks awarded to the Company on December 17, 2015 in Call 3 of Round 1 Mature Field Auction in Mexico.

The three blocks, Mundo Nuevo, Topén and Malva, were the Company's top three choices in the auction and are in close proximity to each other in the State of Chiapas, which will allow operational efficiencies. The blocks collectively comprise 74.2 km2 (18,335 acres) and currently have gross production of approximately 650 barrels of medium to light oil and natural gas liquids per day. Renaissance believes that untested upside exists on all three properties to allow significant increases to future production levels.

Renaissance won the blocks by very small differentials of less than 2.5% above each of the second place bid values in a well-attended auction process that saw over 40 companies vying to be the first onshore operators in Mexico's historic privatization of the energy sector. In total, all 25 blocks for auction were awarded.

According to Comisión Nacional de Hidrocarburos ("CNH") of Mexico with information provided publically for the Mature Field Auction, these three blocks collectively contained original volumes in place of approximately 140 million barrels of oil and natural gas liquids and have collectively produced approximately 46 million barrels of oil and natural gas liquids, as at January 1, 2015. The volume estimates publically disclosed by CNH were not prepared by a qualified reserves evaluator in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGEH") or National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Renaissance will have a third party evaluation conducted on each block this year by a qualified reserves evaluator and will provide the results publically when available.

Mundo Nuevo
The Mundo Nuevo block is located 70 km southwest of the city of Villahermosa, Tabasco with an areal extent of 27.7 km2 (6,845 acres). The Mundo Nuevo field, a middle Cretaceous fractured carbonate reservoir, was discovered in 1977. This field was developed by PEMEX through the drilling of 14 wells, reaching a peak production of over 15,000 barrels per day (bbls/day) of natural gas liquids, in the early 1980's. This field is currently producing approximately 130 bbls/day of natural gas liquids, with an average reservoir depth of 3,580 meters. With the advantage of 3D seismic data, acquired since the original wells were drilled, Renaissance has identified numerous potential new development well locations. In order to satisfy the minimum work commitment for Mundo Nuevo, the Company is required to drill one development well. Renaissance was awarded the Mundo Nuevo block with an additional royalty amount of 80.69%. According to information publicly released by CNH during the auction process and as of yet unconfirmed by the Company's own qualified reserves evaluators in accordance to COGEH and NI 51-101, the Mundo Nuevo field was estimated to have contained original volumes in place of 86 million bbls of natural gas liquids and has had cumulative production of 35 million bbls of natural gas liquids, as at January 1, 2015. Renaissance sees significant opportunity for additional value creation in new well locations as well as application of innovative re-completion technologies.

Topén
The Topén block is located 80 km southwest of the city of Villahermosa, Tabasco with an areal extent of 25.3 km2 (6,251 acres). The Topén field, an upper Cretaceous fractured carbonate reservoir, was discovered in 1978. This field was developed by PEMEX through the drilling of 5 wells, reaching a peak production of over 1,500 barrels bbls/day of medium crude oil, in the mid 1980's. This field is currently producing approximately 280 bbls/day of oil, with an average reservoir depth of 3,300 meters. The Topén field is delineated with 3D seismic data acquired since the original wells were drilled. Renaissance has identified numerous new development well locations and potential for significant field extensions as well as a previously untested area which is supported by seismic amplitude analysis. In order to satisfy the minimum work commitment for Topén, the Company is required to drill one development well. Renaissance was awarded the Topén block with an additional royalty amount of 78.79%. According to information publicly released by CNH during the auction process and as of yet unconfirmed by the Company's own qualified reserves evaluators in accordance to COGEH and NI 51-101, the Topén block was estimated to have contained original volumes in place of 40 million bbls of oil and has had cumulative production of 8 million bbls of oil, as at January 1, 2015. Renaissance sees significant opportunity for additional value creation in new well locations as well as application of innovative re-completion technologies.

Malva
The Malva block is located 95 km southwest of the city of Villahermosa, Tabasco with an areal extent of 21.2 km2 (5,239 acres) The Malva field, an upper Cretaceous limestone reservoir, was discovered in 2003. This field was developed by PEMEX through the drilling of 4 wells, reaching a peak production of over 2,000 barrels bbls/day of light crude oil, in the late 2000's. This field is currently producing approximately 270 bbls/day of light oil, with an average reservoir depth of 2,680 meters. The Malva field is delineated with 3D seismic data. Renaissance used high tech seismic technology and advanced structural interpretation to identify a number of untested potential hydrocarbon amplitudes and new well locations and field optimization opportunities in the existing producing area. In order to satisfy the minimum work commitment for Malva, the Company is required to drill two wells. Renaissance was awarded the Malva block with an additional royalty amount of 57.39%. According to information publicly released by CNH during the auction process and as of yet unconfirmed by the Company's own qualified reserves evaluators in accordance to COGEH and NI 51-101, the Malva block was estimated to have contained original volumes in place of 13 million bbls of oil and has had cumulative production of 3 million bbls of oil, as at January 1, 2015. Renaissance sees significant opportunity for additional value creation in new well locations as well as application of innovative re-completion technologies.

Focused in Mexico, Renaissance has, through this licensing round, firmly established a high quality entry position and is working to further develop a diversified portfolio of lower risk mature fields and unconventional exploration and development opportunities. Mexico's Energy Reform, now solidly underway, provides Renaissance with unprecedented opportunity to become a major player in a world-class resource base.

Amatitlán
In November 2017, Renaissance, in conjunction with its partner Lukoil, progressed the field evaluation program to production for the Amatitlán block in Veracruz. Renaissance has now:

  • Completed the third workover of a scheduled six well workover program with the fractured recompletion of a lower zone in the Chicontepec formation in a previously non-producing well;
  • Gross production from the three workovers has stabilized at approximately 110 bbls/d of 38° API light oil;
  • Gross cost for the three workovers is estimated at C$650,000, or under C$6,000 per producing barrel;
  • The workover rig has now been redeployed to the fourth location, with expected completion of the operation by mid-November; and
  • Drilling rig crews and equipment have now received all required certifications and expected to be moved to the first drilling location in the coming weeks, subject to finalizing drilling permits.

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