Talos Energy Inc., Houston, will send oil and gas from the Sunspear discovery to its recently acquired Prince platform, adding production to its US Gulf of Mexico operations with first oil expected in 18-24 months.
The Talos-operated Sunspear exploitation well discovered commercial quantities of oil and natural gas in July 2023, the company said as part of its second-quarter 2023 earnings release Aug. 8. Preliminary post-drill analysis indicates about 260 ft of gross true vertical thickness of oil pay (177 ft net across two targets), including 149 ft of net oil pay in the main target in line with pre-drill expectations.
The Sunspear prospect and the Prince platform were both acquired through the $1.1-billion acquisition of EnVen Energy Corp. (OGJ Online, Sept. 22, 2022). Owning the critical assets in the Gulf of Mexico “can significantly enhance subsea drilling economics,” said Talos president and chief executive officer Timothy S. Duncan, and the ongoing integration of EnVen and Talos’ increased oil and liquids exposure “underpinned another quarter with strong margins,” he said.
Working interest partners are Talos (48%), an entity managed by Ridgewood Energy Corp. (47.5%), and Houston Energy (4.5%).
Prior to first oil at Sunspear, Talos remains on track to bring first oil from Lime Rock and Venice discoveries by first-quarter 2024. Both wells will be tied back to the Talos owned and operated Ram Powell platform. Talos owns a 60% working interest in both wells.
Elsewhere in the Gulf of Mexico, the Longhorn prospect, designed to test deep objectives underneath Lobster field, found non-commercial levels of hydrocarbons in the deep zone, though the well encountered over 50 ft of pay across two legacy field pays. The well has been suspended and will be analyzed for completion alongside the next Lobster field development well, which is expected to spud in this year’s third quarter.
Second-quarter production, earnings
Talos Energy produced 70,300 boe/d in the year’s second quarter (75% oil, 83% liquids).
Revenue was $367.2 million, driven by realized prices (excluding hedges) of $71.44/bbl for oil, $16.25/bbl for NGLs, and $2.46/Mcf for natural gas. This compares with second-quarter 2022 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 in this year’s second quarter was $13.7 million and adjusted net income was $11.5 million.
Second-quarter 2023 capital expenditures were $191.2 million and net cash provided by operating activities was $214.2 million.
