American Energy Partners, EIM Capital form partnership for shale exploration in Mexico's Burgos basin

EIM Capital, a private equity fund in Mexico City, announced a long-term partnership with an affiliate of American Energy Partners LP (AEP) of Oklahoma City to explore in Mexico for shale. It's believed unconventional potential exists where the South Texas Eagle Ford extends into Mexico's Burgos basin .

The US Energy Information Administration reported in January 2014 that Mexico ranked eighth in the world in terms of oil and condensate technically recoverable from shale, estimated at 13.1 billion bbl.

Regarding natural gas, EIA reported Mexico holds 545 tcf of technically recoverable shale resources (UOGR, March-April 2014). Energy reform in Mexico has opened its oil and gas resources to outside exploration and production companies and outside investors.

EIM Capital is led by Chief Executive Officer Franco C. Hamdan and former Mexican President Vicente Fox. AEP is led by Aubrey K. McClendon, former Chesapeake Energy Corp. cofounder and chief executive officer.

AEP and EIM Capital agreed AEP will invest in EIM Capital to jointly pursue investments in Mexico's energy industry and explore unconventional oil and gas development. No dollar amounts were outlined in an initial news release other than to say significant investment.

Hamdan, founder of EIM, said, "Mexico's proximity to the US market's established infrastructure, service providers, and operators could help quickly scale the nascent Mexican shale industry and, with the right conditions, Mexico could rapidly emerge as a global leader in energy production."

AEP Chairman and Chief Executive Officer McClendon said, "EIM's knowledge of and investments in Mexican infrastructure coupled with [AEP's] knowledge of and operation within the unconventional energy industry will produce unparalleled opportunities."