Talos makes major "historic" oil find off Mexico

Talos Energy and partners Sierra Oil and Gas, and Premier Oil have made an estimated 1.4-2 billion bbl, "world-class" light oil discovery at the Zama-1 exploration well, offshore Mexico.

The find has been described as one of the 20 largest shallow water finds in the past 20 years and the first private sector oil discovery in the country. Zama-1 was drilled in 166m water depth, about 37mi (60km) off Tabasco, in the Block 7 in the Sureste Basin, using the Ensco 8503 semisubmersible.

Pablo Medina, Wood Mackenzie's senior analyst, Latin America Upstream, says that the Zama discovery by Talos is the most important achievement so far of the Mexico's Energy Reform. "According to our data, Zama is one of the 20 largest shallow water fields discovered globally in the past 20 years," says Medina. "On top of this, Zama is the first find by a private company in Mexico in almost 80 years."

Houston-based Talos' discovery comes just months after Eni confirmed it had found oil in the Amoca-2 well, which it said was the first well drilled by an international oil major offshore Mexico since the country's 2013 Energy Reform.

Amoca-2 was drilled in the already explored shallow waters of Campeche Bay, in Area 1,200km west of Ciudad del Carmen, in 25m water depth. Meanwhile Talos' well is in an as yet unexplored area.

Last month, Mexico marked its successful shallow water round, Round 2.1, which saw 10 of 15 blocks awarded. Mexico’s first shallow water round, Round One, was held in July 2015, and only awarded two areas out of 14. In December 2016, Mexico's deepwater bidding round, Round 1.4, resulted in eight of the 10 deepwater blocks in the Gulf of Mexico awarded. 

“This is both a historic and significant discovery,” 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 well reached an initial shallow target vertical depth of approximately 11,100ft (3383m). Talos says it hit a 1100ft (335m) oil bearing interval, with 558-656ft (170-200m) of net oil pay in Upper Miocene sandstones with no water contact. The firm says initial gross original oil in place estimates for the Zama-1 well range from 1.4-2 billion bbl. Oil samples indicate light oil, with API gravities between 28° and 30° and some associated gas.

Talos is now setting a liner to protect the discovered reservoirs prior to drilling deeper exploratory objectives to a total vertical depth of about 14,000ft (4267m). 

Talos and Premier were awarded Blocks 2 and 7 in 2015, under Mexico first tender of oil and natural gas fields in over 80 years. Block 2 and Block 7 are 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, says Talos.

Talos holds a 35% participation interest with Sierra and Premier holding 40% and 25% participation interests, respectively. 

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