Talos Energy Inc. agreed to acquire a 21.4% working interest in Monument, a large Wilcox oil discovery in deepwater Gulf of Mexico for $32 million and has added the project to its projected 2024 capital program.
Talos, in its second-quarter 2024 earnings release Aug. 7, said the deal was signed subsequent to the quarter. As part of a late July 2024 operations update, Monument operator Beacon Offshore Energy noted it had agreed to divest a 12.86% working interest in the project to an undisclosed third party and said it would retain a 30% working interest.
Monument, in Walker Ridge blocks 271, 272, 3156, and 316, will be developed via a two well, 17 mile subsea tieback to the Shenandoah floating production system (OGJ Online, Apr 6, 2020). The discovery is post-final investment decision (FID) with appraised proved plus probable gross reserves of about 115 MMboe.
First production of 20,000-30,000 boe/d (gross) is expected by late 2026 under restricted flow due to facility rate-constraints, the company said. An additional 25–35 MMboe drilling location adjacent to the discovery could extend the resource, it continued.
Talos expects to invest about $25 million (net) in the project in 2024 and about $160 million over 2025 and 2026, with no changes to its 2024 capital expenditures guidance. The company has reallocated a portion of its 2024 capital investments for the Monument discovery, given the later-than-anticipated arrival of the West Vela rig.
Beacon Offshore Energy is operator of Monument with 30% working interest. Partners are Navitas Petroleum (28.6%) and Repsol E&P USA Inc. (20%). In May, one of the partners, Progress Resources USA Ltd. renounced its stake (Blocks 271 and 272), in favor of the remaining partners (Repsol increased its stake by 8.57% to 28.57%).
Second-quarter results
For the year’s second quarter, Talos produced 95,500 boe/d (73% oil, 81% liquids), which is at the high end of the company’s guidance.
The company had revenue of $549.2 million, net income of $12.4 million, and adjusted net income of $5.2 million. Capital expenditures for second-quarter 2024 were $122.8 million, excluding plugging and abandonment and settled decommissioning obligations. Net cash provided by operating activities was $289.4 million.
