Successful Zama Appraisal and Production Test

April 17, 2019

(Photo: Talos Energy)
(Photo: Talos Energy)

Talos Energy said it has completed a successful Zama appraisal well and production test in Block 7, located in the offshore portion of Mexico's Sureste Basin.

Talos is the operator of the bock, and its partners are Sierra Oil & Gas, a company of DEA Deutsche Erdoel AG, and Premier Oil Plc.

The Zama-2 ST1 appraisal well, the second of three appraisal penetrations, was drilled to test the northern limits of the reservoir, acquire a whole core to collect detailed rock properties, and perform a well test in several perforated intervals. The well was drilled 180 meters updip of the Zama-2 well and approximately 2.1 kilometers north of Zama-1 exploration well.

The well logged 266 meters of gross true vertical depth (TVD) pay, within expectations for the northern extension of the Zama discovery and confirming a consistent net-to-gross ratio range of 68%-73% through multiple penetrations. Talos said it also captured 714 feet of whole core with 98% recovery, the longest whole core acquired in a single well in the history of offshore Mexico.

The well was cased and perforated totaling 248 gross feet of perforated section with varying rock properties. Hydrocarbon flow was established without stimulation in two separate flow tests and achieved a combined rate of 7,900 barrels of oil equivalent per day (boepd), of which 94% was oil with API gravity ranging from 26-30 degrees, and 6% was gas. The flow rate was restricted with limited pressure drawdown and each zone was shut-in for an extended period to establish a significant radius of investigation for each test, and neither gave any indication of depletion or significant barriers within the reservoir.

The operation to sidetrack from the Zama-2 location, drill, core and reach total depth (TD) of 3,549 meters of measured depth (MD) was completed approximately nine days ahead of schedule and 16% below budget. The well test operation was completed approximately five days ahead of schedule and more than 30% below budget. Operations were safely coordinated and executed with the assistance of several local contractors, including the Mexican-flagged floating storage and production vessel utilized in the flow test.

Talos President and Chief Executive Officer Timothy S. Duncan commented, "The Zama-2 ST1 operation was another success for the consortium. With each stage of the appraisal program, our experience and understanding has continued to strengthen in the region, and this is evident in our operational performance. The coring operation allowed us to gather important rock samples, which indicate excellent rock properties with similarities to world-class reservoirs in the United States Gulf of Mexico. The production rate of 7,900 Boe/d from two zones in a very simple rate-restricted test over only a portion of the total pay column confirmed our expectations that the Zama wells will provide exceptional productivity. The tests also confirmed our geologic model of well-connected reservoirs, which should allow for a high ultimate oil recovery. Given the water depth of approximately 168 meters, we believe that a combination of fixed platforms, dry trees and short-cycle development wells will maximize both capital efficiency and optionality with regard to how many total wells and completions per well will be necessary to maximize recovery. Also, given the deliverability of the perforated intervals demonstrated in the flow test, we believe a peak production rate between 150,000 – 175,000 boepd is achievable."

In the next stage of the appraisal program, the Zama-3 appraisal well will be drilled to the south of the original Zama-1 exploration well and will assist in delineating the reservoir continuity and quality in the southern part of the field. The Zama-3 appraisal operation includes collecting an additional core to better understand the reservoir geology.

Duncan added, "We will now move to the southern end of the discovery with the Zama-3 appraisal well to continue to collect data before concluding appraisal operations. Concurrently, we are working with Petróleos Mexicanos (Pemex) on unitization prior to submitting a development plan to the regulator. Our goal is to reach final investment decision ("FID") and first production as soon as possible. With the continued focus of the Talos operating team, our partners, and local workforce, Zama will be an impactful asset for the Company and the Mexican economy, and we are proud to play a key role in its development."



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