Hokchi to Spend $60 Million on Two Gulf of Mexico Exploration Wells

Hokchi Energy plans to spend roughly $60 million drilling two exploration wells in shallow Gulf of Mexico waters off Veracruz, targeting prospects the company says carry a combined 50% chance of containing 100 million barrels of oil equivalent.

The Argentine-backed producer, Mexico's Mexican subsidiary of Pan American Energy, said in a statement Wednesday that drilling of the first well, Woolis-1EXP, should begin in the third week of November. Each well will run about 1,500 meters (4,900 feet) deep, and the first is expected to finish in early 2027. The company will move straight to the second well, Tojol, after that, with completion penciled in for the first quarter of 2027.

The Fontis Energy Oberón jack-up rig is already on site off Coatzacoalcos in Veracruz state.

Why these two wells matter

Private producers have drilled relatively little in Mexico in recent years, which is why Hokchi's campaign is drawing close attention. The wells will test whether additional resources sit near existing discoveries in the same contract area.

Hokchi hopes to convert the prospective resources at Woolis and Tojol into contingent resources and, eventually, commercial reserves. That path — from prospect to bankable reserve — is the one every operator in Mexico's post-reform acreage has to walk.

After drilling, Hokchi will evaluate the results and could launch a delineation program to determine the size of any discovery.

What's already on the block

The wells fall within a production-sharing contract signed in June 2018. Hokchi holds 75% of the block, with affiliate Xaxamani Energy holding the remaining 25%.

The same area already holds the Xaxamani discovery, which is under development. That find carries more than 130 million barrels of oil equivalent in proved, probable and possible (3P) reserves, and Hokchi expects production to start in the near future.

That backdrop matters for the exploration campaign: if Woolis or Tojol hit, any new resources could share infrastructure and development planning with a project already moving toward first oil.

• Investment: about $60 million for the two wells
• Depths: roughly 1,500 meters (4,900 feet) each
• Chance of success: 50% combined for 100 million boe
• First spud: third week of November
• Contract: production-sharing agreement from June 2018; Hokchi 75%, Xaxamani Energy 25%

The takeaway is straightforward: a mid-sized private operator is putting real capital into Mexican shallow water at a time when few peers are, and the results will arrive over the next two drilling seasons.

The watch item is the Woolis-1EXP spud later this month — and whether a discovery at either prospect triggers a delineation program.