Talos Energy gets CNH approval for Zama appraisal plan

Sept. 28, 2018
Mexico’s oil and gas regulator National Hydrocarbons Commission (CNH) has approved the appraisal plan for the Talos Energy Inc.-operated Zama-1 discovery on Block 7 in the shallow-water Sureste basin off Mexico and is currently reviewing the application for permits required to commence drilling operations.

Mexico’s oil and gas regulator National Hydrocarbons Commission (CNH) has approved the appraisal plan for the Talos Energy Inc.-operated Zama-1 discovery on Block 7 in the shallow-water Sureste basin off Mexico and is currently reviewing the application for permits required to commence drilling operations (OGJ Online, May 18, 2018).

The appraisal plan includes three new reservoir penetrations. The first well, the Zama-2, will be deepened by 500 m to test an exploration prospect called Marte, which has an unrisked recoverable resource range of 60-150 million boe. Talos expects its share of the cost to deepen the wellbore to be $3.5 million of the estimated $10 million gross.

The Block 7 Consortium let a contract to an Ensco subsidiary for the Ensco 8503 semisubmersible drilling rig, anticipated on location in November. The contract covers the drilling of two wells, a sidetrack, and a well test. Talos expects Zama-2 to be spud in this year’s fourth quarter and the appraisal program to be complete by mid-2019.

CNH approved a gross budget of $325 million for the appraisal plan, including $75 million of contingent operations, to drill the wells, perform a drill stem test for information about the reservoir continuity and productivity, as well as hole coring across the reservoir and sample collection. Talos expects its net share of the costs to be $75-80 million before any contingency costs.

Talos Pres. and Chief Executive Officer Timothy Duncan said the agreement should keep the company on track to achieve initial production from the Zama discovery in 2022.

Block 7 interests are operator Talos with 35%, Sierra Oil & Gas 40%, and Premier Oil PLC 25%.