Houston-based Talos Energy Inc. is looking for other growth opportunities which include places outside the Gulf of Mexico. The company is still doing everything to maximize value in its Zama discovery in Mexico after the authorities granted operatorship to state oil Pemex.
“We have not 100% given up on Zama; we are doing absolutely everything given the circumstances to maximize value to shareholders, but we are going to keep looking for areas to replace it,” CEO Timothy Duncan said during the company’s second-quarter results call.
Mexico’s Energy Secretariat, or SENER, on July 5 appointed Pemex as the operator for the 1-billion-barrel shallow water Zama Field, which extends into Pemex’s Uchukil 0152 block. Talos has said it was very disappointed with SENER’s decision, considering its significant investments in Zama during the six years of its ownership.
S&P Global Platts said in an article last week Mexico’s change in policy has come at a time when other countries, like Brazil, Guyana and Suriname have decided to attract more foreign capital to develop their resources.
“Multiple oil discoveries are being developed or planned in these countries, which are expected to attract billions of dollars in the next decade,” Platts stated.
Duncan said Talos would find new opportunities either inside its own portfolio or through mergers and acquisitions.
BP’s recent Puma West discovery shows the potential of the eastern side of the deepwater US Gulf of Mexico, where Talos also owns blocks, Duncan said. Sited in the prolific Green Canyon area 131 miles offshore Louisiana, Puma West was drilled to total depth of 23,530 feet and has encountered oil pay in a high-quality Miocene reservoir. The find is located west of BP’s producing Mad Dog field, in a neighborhood with several large fields, including Occidental Petroleum’s Caesar-Tonga.
Talos is also looking for M&A opportunities outside the Gulf, where it can either obtain bulk production or greenfield projects, Duncan said.
According to Platts, while he did not specifically mention where Talos is looking, he highlighted the good results other companies have had by developing a portfolio with greenfield projects, like Hess in Guyana.
Hess has a 30% stake in the prolific Stabroek block where over 20 discoveries have been made since 2015 estimated to contain over 9 billion barrels of oil equivalent resources.
