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Talos Energy announces commencement of Zama appraisal programme

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Oilfield Technology,

Talos Energy Inc. (‘Talos’ or the ‘Company’) announced that the Zama-2 appraisal well was spud on Thursday, November 29, 2018. The spudding of the Zama-2 well marks the commencement of the Zama discovery appraisal programme, which will consist of three reservoir penetrations, including two wells and one sidetrack.

The first well, the Zama-2, will be drilled to the north of the Zama discovery well and will look to confirm the oil water contact and collect information to better understand the reservoir's aquifer support. The Zama-2 well will also be deepened approximately 500 m below the Zama reservoir to test the Marte exploration prospect. This will then be followed by an up-dip vertical sidetrack from the main bore hole, which will be cored and a drill stem test (‘DST’) will be performed, which is expected in the second quarter of 2019.

The second appraisal well, Zama-3, will be drilled to the south of the original discovery well and will help delineate reservoir continuity and quality in the southern part of the field and will be cored to be better understand the reservoir geology.

The appraisal programme is expected to be completed by mid-year 2019.

The Ensco 8503 rig is contracted and will be utilised for the entirety of the appraisal programme. Talos is also working with several local Mexican suppliers who support the operations with many critical services, including shore base support, casing supply, anchor handling, helicopters, and communications, amongst others. Additionally, engineering professionals from McDermott's Mexico City office are assisting in the pre-FEED analysis of the potential development options post-appraisal. Overall, Talos and its partners plan to spend approximately US$250 million, excluding contingencies, in Mexico during this appraisal program while exceeding the National Content requirements of the contract through the exploration and appraisal phase.

Talos Energy's President and Chief Executive Officer, Timothy S. Duncan, commented, "We are excited to enter this phase of the Zama project with our partners. We are also very pleased with the new partnerships formed with local Mexican suppliers. There is a significant amount of Mexican presence in our workforce in the Zama project, both on the rig and in the local communities that support offshore operations and we are proud of the impact this project will have in the local Mexican economy. The timing of the commencement of the appraisal programme will allow us to stay on track of our goal, which is to achieve initial production from the Zama discovery in 2022."

Talos is the operator of Block 7 offshore Mexico, which includes Zama, with a 35% participating interest (‘PI’). Premier Oil (25% PI) and Sierra Oil & Gas (40% PI) are Talos's partners in Block 7.

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