Talos Energy Inc. expects to advance its US Gulf of Mexico open water program that includes six total operations between second-half 2022 and first-half 2023.
The company will take possession of the Seadrill Sevan Louisiana deepwater rig in mid-August, initiating the program, the company said as part of its second-quarter earnings report Aug. 4.
Four of the operations are exploitation wells targeting 65-100 MMboe of cumulative gross unrisked resources utilizing Talos-operated infrastructure for accelerated subsea development, the company said.
Talos will spud the Lime Rock prospect, the first of the four exploitation targets, following a deepwater recompletion. Prior to initiating the rig program, the company farmed out non-operated working interest partners in each of the Lime Rock, Venice, and Rigolets projects. Talos now owns a 60% working interest in each. If successful, the operator expects each well to produce 5,000-15,000 boe/d gross with expected timeline to first oil of 12-18 months.
The company expects the bp-operated Puma West appraisal well (Talos, 25% non-operated interest) to spud early in fourth-quarter 2022 with results expected by early 2023. The appraisal follows the successful 2021 exploration discovery well. The well has been permitted to a depth of about 26,700 ft and will be drilled with the Diamond Ocean BlackHornet rig, currently working for bp.
In Gunflint field, (Talos, 9.6% non-operated interest) Talos participated in two workovers and anticipates initiating the MC 992 #1 sidetrack well by yearend.
Lastly, Talos is working with an unnamed partner to finalize a five-block exploration unit comprising 28,800 gross acres in Walker Ridge and Green Canyon areas on which the company expects to participate in a high-impact exploration prospect in first-half 2023.
The company’s Seville exploitation well failed to discover commercial quantities of hydrocarbons in late July. The Pompano platform rig program has shifted to begin preparations for the Mount Hunter development well, with spud expected in third-quarter 2022 and first oil early 2023.
Overall, in second-quarter 2022, the company produced 65,400 boe/d (67% oil, 75% liquids).
Financials
In the quarter, the company had revenue of $519.1 million, driven by realized prices (excluding hedges) of $108.03/bbl for oil, $37.79/bbl for NGLs, and $8.00/Mcf for natural gas.
Net Income for the quarter was $195.1 million and adjusted net income of $100.6 million.
Capital expenditures for the quarter was $85.9 million, inclusive of plugging and abandonment. Free cash flow (before changes in working capital) came in at $134.1 million.
