On December 4, 2018, our client Sierra Oil & Gas announced the execution of an agreement that will result in Sierra’s business being integrated with Deutsche Erdoel AG (DEA AG), an international independent exploration and production company headquartered in Germany. Upon completion of the transaction, Sierra will be integrated into Deutsche Erdoel México, a fully-owned subsidiary of DEA AG. The resulting portfolio will consist of ten exploration blocks and one onshore production block and is expected to require capital investment of more than 2 billion US dollars over the next five years. The transaction is expected to be completed during the first half of 2019, subject to regulatory approvals.
Funded by Riverstone, EnCap Investments and BlackRock, Sierra Oil & Gas is the first Mexican E&P company which holds interest in 6 blocks in Mexico as a non-operator. This is the first major upstream M&A transaction in Mexico after the enactment of the Energy Reform in 2014.
The press release issued by Sierra Oil & Gas is at the link below.