Talos Energy Moving Ahead With Appraisal Plan In Gulf Drilling Project

After the successful spud of the ZAMA-1 well in the Gulf of Mexico, Talos Energy is moving ahead with a second spud after an appraisal plan was approved by Mexican authorities. The second well exploration will be followed by a third under a groundbreaking agreement entered into between Talos and Pemex, the Mexican state-owned energy giant.

Talos Energy is the first privately-owned foreign entity allowed into Mexican sovereign territory in some 80 years. Mexico nationalized its oil industry in 1938. But this new project shows that big changes are happening in terms of the way Mexico is willing to explore for new energy resources.

Talos Energy was joined by two partners in the ZAMA-1 well. Premier Oil of the U.K. and Sierra Gas & Oil, a Latin American firm, are participating in the project. Talos will command a 35% share in ZAMA-1.

The two new wells are located in blocks adjacent to where the first well struck what appears to be a significant discovery. Early estimates are that ZAMA-1 may harbor from 1.4 billion to two billion barrels of oil. If all goes well, the site may produce from 100,000 to 150,000 barrels of oil per day by 2023.

Well No.2, dubbed ZAMA-2, is located just north of the original discovery. Engineers are hoping to confirm oil-water contact and get a better reading on the location’s aquifer support profile. Furthermore, ZAMA-2 will be deepened to a level of about 1,640 feet as a way to determine the Marte exploration factor. Then plans call for an up-dip vertical sidetrack adjacent to the primary bore hole. This will be cored to support a drill-stem test that should be completed in the first months of 2019.

The appraisal program is being completed entirely with the Ensco 8503 rig. An array of Mexican service operators will be teaming up with Talos Energy as work on these sites moves forward. That includes McDermott’s Mexico City. That firm is assisting with pre-FEED analysis of the option for future development of the site including what potential they hold.

Talos CEO Timothy Duncan said the entire appraisal plan operation may cost $250 million.