Significant oil discovery made with Zama-1 well offshore Mexico

Talos Energy, together with its joint venture partners Sierra Oil and Gas and Premier Oil, have announced a world-class oil discovery with the Zama-1 exploration well offshore Mexico. Talos holds a 35% participation interest, with Sierra and Premier holding 40% and 25% participation interests, respectively. The Zama-1 well is the first offshore exploration well drilled by the private sector in Mexico’s history.

Preliminary analysis indicates:

• Initial gross original oil in place estimates for the Zama-1 well are in excess of 1 billion bbl, which could extend into a neighboring block;
• A contiguous gross oil-bearing interval of more than 335 m (1,100 ft), with up to 200 m (650 ft) of net oil-bearing reservoir in Upper Miocene sandstones with no water contact; and
• Initial tests of hydrocarbon samples recovered to the surface contain light oil, with API gravities between 28° and 30° and some associated gas.

The well spudded on 21 May 2017 utilizing the Ensco 8503, a moored floating rig. Located in 166 m (546 ft) of water and approximately 60 km (37 miles) offshore Dos Bocas, it has reached an initial shallow target depth of 3,383 m (11,100 ft). The operator, Talos, is currently setting a liner to protect the discovered reservoirs, prior to drilling deeper exploratory objectives to a total vertical depth of approximately 4,200 m (14,000 ft).

“This is both a historic and significant discovery, and we could not be more proud of the highly skilled personnel from Mexico and the US who have been working together in a safe and efficient manner to make it a reality,” said Tim Duncan, Talos President and CEO. “We believe this discovery represents exactly what the energy reforms intended to deliver: new capital, new participants, and a spirit of ingenuity that leads to local jobs and government revenues for Mexico. We are eager to begin appraising this discovery and drilling more unique opportunities. The future is bright for offshore Mexico for years to come.”

Tony Durrant, Premier Chief Executive, added: “We are delighted to be announcing this significant new oil discovery offshore Mexico. We have encountered a very substantial oil-bearing interval, which indicates over 1 billion barrels of oil in place, a commercial standalone development which adds materially to Premier’s portfolio of assets worldwide. It is particularly pleasing that our strategy of focusing our exploration portfolio on high impact opportunities in proven but under-drilled basins has led to this world-class discovery with our first well in Mexico. The oil discovered in the Zama-1 well is an extremely important event for Premier, the joint venture and for Mexico, and we look forward to working with the government and our partners to realize the full potential of this exciting discovery.”

During 2015, Talos and its consortium partners executed two production-sharing contracts (PSCs) with Mexico’s upstream regulator, the National Hydrocarbons Commission, for Block 2 and Block 7. The PSCs were awarded to the consortium during the first tender of Mexico’s oil and natural gas fields in more than 80 years. Block 2 and Block 7 are located in the Sureste Basin, a prolific proven hydrocarbon province in the shallow waters off the coast of Mexico’s Veracruz and Tabasco states, respectively. Block 2 and Block 7 contain approximately 162,904 gross acres with numerous high-impact prospects in well-established and emerging plays.