What Does the Approval of Zama Appraisal Plan Mean for Talos Energy?

Talos Energy is a gas and oil company that deals with the exploration, production, and development of natural oil and gas products in the Gulf of Mexico. In 2017, Talos Energy announced its interest in Zama but it was supposed to seek approval from the National Hydrocarbons Commission (“CNH”), a Mexican gas and oil regulator. Talos Energy is focused on innovative production and exploration to obtain valuable resources which people thought are unreachable.

The strategy of Talos Energy is to exploit, explore, and acquire in the Gulf Coast region and the Gulf of Mexico through the utilization of their sizable seismic database. The proprietary reprocessing techniques aid the database. Most recently, CNH approved Zama’s appraisal plan allowing the interested companies conduct their mining activities. The appraisal plan approval is critical in ensuring the commencement of Zama discovery.

However, CNH is reviewing applications associated with drilling permits, which are relevant for the commencement of the drilling operations. The appraisal plan involves three reservoir penetrations. One of the wells will be as deep as 500m which will be used for testing exploration prospects. Drilling of the well will cost the three companies involved up to $10 million out of which Talos Energy will pay $3.5 million.

The appraisal plan will cost a total of $325 million which CNH has approved. The total amount includes $75 million for contingency operations. The total cost also includes costs associated with drilling the wells, a collection of fluid and rock samples, conducting a drill stem test, and hole scoring within the Zama reservoir.

The approval of Zama appraisal plan will enable the companies involved in Zama discovery to maintain a high schedule of investment in relation to the Zama project. The companies will begin their drilling operations regarding the appraisal plan before the year ends. This will enable the three companies to stay on track so as to meet the ultimate goal which is concerned with achieving initial production.

The Zama project will provide the locals with jobs, materially add to domestic production, and increase government revenue. The appraisal plan is expected to be accomplished by mid-year 2019.

Learn more about Talos : https://www.businesswire.com/news/home/20130206006701/en/Talos-Completes-Acquisition-Energy-Resource-Technology

 

Leave a Reply

Your email address will not be published. Required fields are marked *